1			What is marginal utility?
			A)	It is the total satisfaction resulting from consuming a product.
			B)	It is the total satisfaction resulting from consuming all products.
			C)	It is the additional satisfaction resulting from consuming one more unit of all products.
			D)	It is the additional satisfaction resulting from consuming one more unit of a product.
2			When is total utility at a maximum?
			A)	When marginal utility is maximum
			B)	When marginal utility is zero
			C)	When marginal utility is increasing
			D)	When marginal utility is decreasing
3			What is the law of diminishing marginal utility?
			A)	The amount of additional utility decreases as successive units of a product are consumed.
			B)	Marginal utility increases quickly at first but more slowly later.
			C)	Total utility declines at first but starts to increase after some point.
			D)	Whereas total utility rises with the consumption of additional units, marginal utility is always constant.
4			Which of the following is a correct statement of the optimal purchasing rule?
			A)	MUA/MUB = PB/PA
			B)	MUA/PA = MUB/PB
			C)	PA/MUB = PB/MUA
			D)	PA/PB = MUB/MUA
			E)	5
5			What will happen if MUA/PA > MUB/PB?
			A)	The price of A will be forced to drop.
			B)	The price of B will be forced to drop.
			C)	The consumer will purchase more of product A.
			D)	The consumer will purchase more of product B,
			E)	5

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6			What is the marginal utility of the fifth unit?
			A)	10
			B)	20
			C)	100
			D)	Cannot be answered from this information

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7			With the consumption of what quantity is marginal utility equal to zero?
			A)	1
			B)	5
			C)	7
			D)	8
8			In order for price discrimination to work, three conditions must be fulfilled. Which of the following is not one of those conditions?
			A)	The seller must be able to identify and separate different groups of buyers.
			B)	The different groups of buyers must have different elasticities of demand.
			C)	The product must be a necessity.
			D)	It must be impossible to resell the product.
9			Suppose that, for a certain consumer, the marginal utility of product A is equal to 40 and its price is $42, while the marginal utility of product B is 30 and its price is $40. What conclusion can be inferred from this?
			A)	This consumer should buy more of product A and less of product B.
			B)	This consumer should buy more of product B and less of product A.
			C)	This consumer should buy more of product B because it is cheaper.
			D)	This consumer should buy neither product, since the prices exceed the marginal utilities.
			E)	This consumer should buy more of product B because it gives greater value for money.
10			<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=png::::/sites/dl/free/1259030687/1059313/ch05_10_11.PNG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (2.0K)</a> What are the missing numbers in the total utility column?
			A)	135, 305, and 435
			B)	90, 340, and 450
			C)	190, 340, and 450
			D)	Cannot be determined from the information given
11			<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=png::::/sites/dl/free/1259030687/1059313/ch05_10_11.PNG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (2.0K)</a> What are the missing numbers in the marginal utility column?
			A)	0, 80, and 60
			B)	100, 80, and 60
			C)	100, 90, and 82
			D)	Cannot be determined from the information given
12			Under which of the following circumstances will total consumer surplus be greatest?
			A)	When price is high and demand is elastic
			B)	When price is low and demand is inelastic
			C)	When price is low and demand is elastic
			D)	When price is high and demand is inelastic
13			Which of the following statements is true about price discrimination?
			A)	It is practised on the basis of age, time, and the volume of purchases.
			B)	It is illegal in Canada.
			C)	It works with luxury goods but not with necessities.
			D)	It works with necessities but not with luxury goods.

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14			Suppose that apples and bananas cost $1 each and this consumer has $8 to spend. In order to maximize her total utility, how many of each should she purchase?
			A)	3 apples and 5 bananas
			B)	4 apples and 4 bananas
			C)	5 apples and 3 bananas
			D)	8 apples
			E)	8 bananas

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15			Suppose that an apple costs $2 and a banana costs $1 and this consumer has $8 to spend. In order to maximize her total utility, how many of each should she purchase?
			A)	1 apple and 6 bananas
			B)	2 apples and 4 bananas
			C)	3 apples and 2 bananas
			D)	4 apples
			E)	8 bananas