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# When total utility is at a maximum, marginal utility is a.zero b.positive c.negative

When total utility is at a maximum, marginal utility is

a.zero

b.positive

c.negative

d.one

e.infinite

22.              Lisa Beth loves bananas and derives 10 utils of total utility eating the first one. When she
consumes a second banana, her total utility increases to 15 utils. Eating the third raises
her total utility to 18 utils. Economists reading her likes and dislikes conclude that

a.because the total utility of the first is 10, she is better off consuming that one and no
more

b.because the marginal utility of the third banana is 18/3 = 6 utils, she would be better
off adding that third to consumption because 6 utils is still better than zero

c.the marginal utility of the second banana is 8 utils, which means she should not eat it

d.the marginal utility of the first banana is zero, even though total utility is 10 utils
because at zero bananas, total utility is zero

e.the marginal utility of the third banana is 3 utils, which conforms to the law of
diminishing marginal utility

23.              On Thanksgiving, Jake’s mother gives him a huge platter of food. If Jake were to keep
eating just to please his mother (even when he really wanted to stop long ago), his
marginal utility of eating that last bite would be

a.the same as his total utility

b.large

c.minus one

d.positive

e.negative

24.              Suppose you’re looking for a new living room sofa and discover that the local store is
running a Presidents’ Day sale. You are delighted because if you end up buying the sofa,
the sale will

a.increase the marginal utility you derive from that sofa

d.decrease the marginal utility you derive from that sofa

e.increase the total utility you derive from that sofa

25.              Utility theory assumes that marginal utility of a good

a.increases as an individual consumes more of the good

b.decreases as an individual consumes more of the good

c.is greater than total utility as long as total utility is greater than zero

d.is constant as long as the individual derives utility from the good

e.is greater than total utility as long as marginal utility is greater than zero

26.              Bonnie gets her hair cut at her usual salon and is very happy with the results. Later that
afternoon, she goes to the mall and sees that a hair salon is giving away free haircuts only
on that day. If Bonnie does not take advantage of the giveaway, it is because the

a.marginal utility of another haircut would be zero or negative

b.marginal utility of another haircut would increase

c.marginal utility of another haircut would be zero or positive

d.total utility of both haircuts would be zero or negative

e.total utility of both haircuts would be higher than just one haircut

27.              When marginal utility is positive, then total utility is

a.negative

b.decreasing

c.zero

d.increasing

e.infinite

28.              When marginal utility is negative, then total utility is

a.positive

b.decreasing

c.zero

d.increasing

e.infinite

29.              Given whatever income they have, consumers make consumption choices to maximize
the

a.total utility of the goods they consume

b.marginal utility of the goods they consume

c.average utility of each good they consume

30.              According to the law of diminishing marginal utility, the fifth pair of gloves that Mary

a.as happy as she was while receiving the first pair

b.less happy than she was while receiving the first pair

c.more happy than she was while receiving the first pair

d.consider that fifth pair as having zero marginal utility

e.total utility decrease

Dec 10 2019 View more View Less