Consumer Choices Quiz

What does the neoclassical theory of consumer choice suggest?

• Consumers make rational decisions by comparing cost and satisfaction

• Consumers make decisions based on emotion

• Consumers always choose the most expensive goods

• Consumers choose goods at random

What is the total budget the consumer has in the example?

• 4 euros

• 5 euros

• 6 euros

• 10 euros

What are the prices of the goods at the kiosk in the example?

• Water is 1 euro, chocolate bars are 2 euros

• Water is 2 euros, chocolate bars are 1 euro

• Both water and chocolate bars are 2 euros

• Water is 3 euros, chocolate bars are 1 euro

What do economists call the limit on how much a consumer can spend?

• Utility constraint

• Income line

• Budget constraint

• Consumption curve

What does a bundle refer to in consumer choice theory?

• A collection of goods a consumer can afford

• The most expensive goods available

• A set of goods with different prices

• A discounted set of products

What does the term "utility" mean in economics?

• The price of a good

• The income of the consumer

• The durability of a product

• The satisfaction a consumer gets from a good

What does the indifference curve represent?

• The prices of different goods

• Combinations of goods that give the same level of utility

• The total income of the consumer

• The decline in product quality

What happens to the marginal utility of chocolate bars as more are consumed?

• It increases with each additional bar

• It stays the same after each bar

• It decreases with each additional bar

• It decreases, then increases again

Which of the following best describes marginal utility?

• The maximum satisfaction from a product

• The satisfaction from consuming one additional unit of a good

• The total satisfaction from consuming all units of a good

• The price of the last product consumed

What does the budget line show?

• The maximum income a consumer can have

• The possible combinations of goods a consumer can purchase with their budget

• The lowest possible prices of goods

• The satisfaction level of each good