Exam 21: The Theory of Consumer Choice

Suppose the only two goods that Charlie consumes are wine and cheese. When wine sells for $10 a bottle and cheese sell for $10 a pound, he buys 6 bottles of wine and 4 pounds of cheese - spending his entire income of $100. One day the price of wine falls to $5 a bottle and the price of cheese increases to $20 a pound, while his income does not change. The bundle of wine and cheese that he purchased at the old prices now costs

Jerry consumes two goods, hamburgers and ice cream sandwiches. He has maximized his utility given his income. Ice cream sandwiches costs $2, and he consumes them to the point where the marginal utility he receives is 6. Hamburgers cost $4, and the relationship between the marginal utility that Jerry gets from eating hamburgers and the number he eats per month is as follows: How many hamburgers does Jerry buy each month?

A consumer chooses an optimal consumption point where the

The rate at which a consumer is willing to exchange one good for another while maintaining a constant level of satisfaction is called the

A consumer likes two goods: books and movies. The three bundles shown in the table below lie on the same indifference curve for the consumer. Which of the following properties of indifference curves would this consumer's preferences violate?

Figure 21-5 (a) (b) -Refer to Figure 21-5. In graph (b), what is the price of good X relative to the price of good Y (i.e., P_x/P_y)?

Figure 21-25 The figure pertains to a particular consumer. On the axes, X represents the quantity of good X and Y represents the quantity of good Y. -Refer to Figure 21-25. The four curves that are drawn on the figure are

The rate at which a consumer is willing to trade off one good for another is called the __________.

Indifference curves graphically represent

Figure 21-14 -Refer to Figure 21-14. Which of the following statements is correct?