Exam 10: The Rational Consumer

Use the following to answer question: Figure and Table: An Indifference Curve Map -(Figure and Table: Indifference Curve Map) Look at the figure and table An Indifference Curve Map. Combination _____ is preferred to combination _____.

Explain the difference between the total utility and marginal utility of eating pizza.

An indifference curve typically:

Use the following to answer questions: Figure: Consumer Equilibrium IV -(Figure: Consumer Equilibrium IV) Look at the figure Consumer Equilibrium IV. Assume that you are consuming the combination of goods at point G. Given the budget constraint FL, utility can be increased by moving to point:

If Coke and Pepsi are perfect substitutes for Lynn, her indifference curves are:

Use the following to answer questions: Figure: Consumer Equilibrium IV -(Figure: Consumer Equilibrium IV) Look at the figure Consumer Equilibrium IV. The lowest level of utility shown in the figure is associated with indifference curve:

Mary, an avid gardener, plans to spend 8 hours working in her garden. It takes her 45 minutes to prune a bush and 30 minutes to fertilize a tree. If she prunes eight bushes, she will still have enough time to fertilize six trees.

Assume that diminishing marginal utility applies to both coffee and football tickets and that the consumer is spending all of her income. If a consumer purchases a combination of coffee and football tickets such that MU_Coffee / P_Coffee = 20 and MU_{Football tickets} / P_{Football tickets} = 10, to maximize utility, the consumer should buy _____ coffee and _____ football tickets.

Use the following to answer question: Figure: A Budget Constraint for CDs and Movies -(Figure: A Budget Constraint for CDs and Movies) Look at the figure A Budget Constraint for CDs and Movies. Chantal likes to spend her weekly income on new CDs and tickets to see movies. The price of a CD is $12 and the movie ticket price is $10. The graph shows Chantal's budget line. What is her weekly income?

The slope of a(n) _____ curve shows the rate at which two goods can be exchanged _____.

Decreases in the price of the good measured on the vertical axis will make the vertical intercept _____ and make the budget line _____.

Use the following to answer questions: -(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of good X is $5 per unit, the price of good Y is $1 per unit, and you have $10 to spend on both goods. To maximize utility, you would consume _____ unit(s) of X and _____ unit(s) of Y.

Use the following to answer questions: -(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of both goods is $1 per unit, that you consume four units of good X and two units of good Y, and that you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume _____ of X and _____ of Y.

A _____ can be generated from indifference curves by changing _____.

For most goods, demand curves slope downward because:

Economists describe the satisfaction consumers receive from consuming goods and services as:

Maria derives 288 utils from buying 2 pairs of hiking boots and 4 saws. She gets 313 utils from buying 1 pair of hiking boots and 7 saws. Maria is indifferent between these two combinations of hiking boots and saws.

At Frankie's Buy-the-Slice Pizza, Bill eats three slices of pizza and then realizes that he enjoyed the second slice more than the third. Even though the price per slice is just $1, the utility-maximizing decision is to quit eating now, since Bill has reached diminishing marginal utility.

Ms. Sweettooth always consumes iced tea and sugar in fixed proportions: 8 ounces of iced tea to 3 teaspoons of sugar. Which of the following combinations of iced tea and sugar will give Ms. Sweettooth the highest total utility?

The amount by which total utility changes when an additional unit of a good is consumed is called _____ utility.