Chapter 19 Flashcards Preview

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Flashcards in Chapter 19 Deck (25):
1

As you more and more of an item,, your total utility----- and your marginal utility------.

Rises and falls

2

Which of these is true?

Total utility is maximized when marginal utility is zero

3

A person would be maximizing her total utility when

Her marginal utility was zero

4

As you consume more and more of a service

Your consume surplus is definitely increasing

5

As a person buys increasing amounts of a good, her marginal utility -------- and her consumer surplus -------.

Decreases and increases

6

Mr. Federal had determined that the marginal utility of the last dollar he spent on cowboy boots is greater than the marginal utility of the last dollar spent on Nikes. Since he is a rational fellow, he will

Buy more cowboy boots and fewer Nikes

7

Melissa says she will have to be paid in order to even try Jason's cooking, so her marginal utility for Jason's cooking is

Negative

8

If total utility is degreasing, then

Marginal utility is less than zero

9

If marginal utility is declining but still greater than zero, then total utility is

Increasing

10

A person who wishes to maximize his satisfaction from the consumption of a product should consume until

Marginal utility is equal to zero

11

The economist mostly associated with consumer surplus is

Alfred Marshall

12

According to the general utility formula, the marginal utility of a good divided by the price of that good is

Equal to one

13

If a restaurant served free steaks, people would consume more and more steaks until their -------- fell to zero.

Marginal utility

14

If water became very scarce and diamonds became very plentiful

The marginal utility of water would rise and the marginal utility of diamonds would fall.

15

We will keep buying blank audio cassettes until the a marginal utility of a cassette

Falls to the price of a cassette.

16

The water-diamond paradox is resolved once we realize that the marginal utility of the last gallon of water consumed is very --------and the marginal utility of the last diamond carat purchased is ......,

Low, high

17

If you were in the middle of the desert, came upon a lemonade stand and paid $5 for a glass of lemonade

You would have gotten at least $5 of utility from the lemonade

18

Kelly eats five alive of pizza on a Friday night but admits each slice of pizza doesn't taste as good as the previous one. This suggests that for Kelly

The marginal utility of the slice of pizza is positive but decreasing

19

We are maximizing our utility when the ------- of each good and service we purchase is equal to --------.

Marginal utility and its price

20

If your marginal utility fro
Your last session with your personal trainer is equal to the price she charged you, then

You have had the exactly the right number of sessions

21

When total iritis increasing, marginal utility is

Positive

22

As you go on more and more ski weekends, your total utility------- and your marginal utility ---------.

Rises and declines

23

Alfred Marshall discovered the concept of

Consumer surplus

24

When marginal utility is zero, total utility

Is maximized

25

As long as total utility is increasing, we know that marginal utility is

Positive