1.When Stephanie increases the consumption of pizza and decrease the consumption of soda, her marginal utility of
A) pizza falls and the marginal utility of soda will increase.
B) both pizza and soda will decrease.
C) pizza increases and the marginal utility of soda will fall.
D) both pizza and soda will increase.
2. Which of following is true about utility and consumption?
A) we would expect to never see a rational person continue to consume while he is experiencing diminishing marginal utility
B) eating inferior goods such as SPAM will cause negative marginal utility
C) people generally have similar preferences in making their consumption choices
D) all of the above
E) none of the above
3. Refer to the above tables. Assume the consumer spends his entire income. The price of a hamburger is $1, the price of a movie is $6, and the consumer has $15. What is the consumer's optimum?
A) 0 hamburgers and 2.5 movies
B) 2 hamburgers and 2 movies
C) 3 hamburgers and 2 movies
D) 4 hamburgers and 4 movies
4. Refer to the above tables. Assume the consumer spends his entire income. Assume that the price of a hamburger is $1. If the consumer's optimum at the current price of a movie is at 4 hamburgers and 4 movies, what is the consumer's income and the price of a movie?
A) Income = $17, Price of Movie = $3
B) Income = $20, Price of Movie = $4
C) Income = $28, Price of Movie = $4
D) Income = $28, Price of Movie = $7
5. Initially, a consumer is at an optimum in purchasing goods X and Y. Then the price of X decreases. Consequently, which statement is true after the price change?
A) A
B) B
C) C