Exam 6: Household Behavior and Consumer Choice

Related to the Economics in Practice on page 131: Uber drivers can choose to drive as many or as few hours as they desire, and most drivers have another job and drive for Uber as a way to supplement their income. Assuming leisure is a normal good, if Uber increased the wages it paid its drivers then the substitution effect would result in drivers working ________ and buying ________ leisure.

Jon is consuming X and Y so that he is spending his entire income and MU_x/P_x = 8 and MU_y/P_y = 4. To maximize utility, he should consume

Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5 -Refer to Figure 6.5. Molly's budget constraint is BD. If the price of CDs increases, her new budget constraint becomes

________ buys so as to make MU_x/MU_y = P_x/P_y for all pairs of goods.

Refer to the information provided in Figure 6.9 below to answer the question(s) that follow. Figure 6.9 -Refer to Figure 6.9. The marginal utility of the third video game rental is

Jane has $500 a week to spend on clothing and food. The price of clothing is $25 and the price of food is $10. The clothing and food pairs in Jane's choice set include ________ units of clothing and ________ units of food.

Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6 -Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is CD, then his income

Michael can buy either pizzas or submarine sandwiches. If the prices of pizzas and submarine sandwiches double and Michael's money income triples, we can conclude that Michael's budget constraint will

The slope of an indifference curve for products X and Y is the ratio of the marginal utility of product X to the marginal utility of product Y.

Assume leisure is a normal good. The substitution effect of a wage decrease implies a ________ demand for leisure and a ________ labor supply.

Refer to the information provided in Table 6.3 below to answer the question(s) that follow. Table 6.3 Dozens of Oysters per Day Total Utility Marginal Utility 1 60 2 104 3 134 4 152 8 5 Number of Beersper Day Total Utility Marginal Utility 1 40 2 70 3 94 4 114 5 14 -Refer to Table 6.3. The marginal utility of the second dozen oysters per day is

Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1 -Refer to Figure 6.1. Assume Tom's budget constraint is AC. Given his current monthly income he will not have enough income to purchase the bundle represented by point

Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2 -Refer to Figure 6.2. Assume Mr. Lingleʹs budget is AC. Given his current monthly income he does not have enough income to purchase the quantities of the two goods at point

Jane has $500 a week to spend on clothing and food. The price of clothing is $25 and the price of food is $10. What is the equation for Jane's budget constraint?

We derive the demand curve for X from indifference curves and a budget constraint by changing the

The ratio of the marginal utility of tea to the marginal utility of scones is six for an individual maximizing utility. This implies that

Ignoring income effects, an increase in the wage rate will cause an increase in the quantity of labor supplied.

The law of ________ refers to a consumer's decrease in additional satisfaction as she consumes more and more units of a good.

Sierra likes chocolate-covered deviled eggs. After eating 10 chocolate-covered deviled eggs, she switches to strawberry ice cream covered in sauerkraut. We can conclude that

Refer to the information provided in Figure 6.8 below to answer the question(s) that follow. Figure 6.8 -Refer to Figure 6.8. The marginal utility of the fourth movie rental is