Exam 10: The Rational Consumer

Use the following to answer questions: Figure: Income and Substitution Effects -(Figure: Income and Substitution Effects) Look at the figure Income and Substitution Effects. Carlos is consuming his optimal consumption bundle at point A when the price of gasoline falls. The dashed line tangent to I₁ shows a hypothetical budget line reflecting:

(Multiple Choice)

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Question 101

Steven consumes staples and paper clips. He is maximizing his utility in consumption of both goods. The price of staples rises. After the change in price Steven should consume _ staples and _ paper clips.

(Multiple Choice)

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Question 102

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:

(Multiple Choice)

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Question 103

If the substitution effect and the income effect of a price change move in opposite directions for a particular good, then the good must be an inferior good.

(True/False)

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Question 104

Use the following to answer questions: Figure: Income and Substitution Effects -(Figure: Income and Substitution Effects) Look at the figure Income and Substitution Effects. Carlos is consuming his optimal consumption bundle at point A when the price of gasoline falls. The movement from K₂ to K₃ reflects the _____ the decrease in the price of gasoline.

(Multiple Choice)

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Question 105

Miguel eats only burgers with onion rings. Miguel's indifference curve between burgers and onion rings must be a straight line.

(True/False)

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Question 106

If the price of a cookie is $2 and the price of a brownie is $4, the price of cookies in terms of brownies is:

(Multiple Choice)

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Question 107

A decrease in the price of a good, holding income and the prices of all other goods constant, is associated with:

(Multiple Choice)

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Question 108

The marginal decision on how to allocate an additional dollar allows consumers to:

(Multiple Choice)

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Question 109

Use the following to answer questions: Figure: Consumer Equilibrium III -(Figure: Consumer Equilibrium III) Look at the figure Consumer Equilibrium III. Kurt consumes at point A. Other things held equal, Kurt would be able to realize more total utility by choosing point:

(Multiple Choice)

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Question 110

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 I. Given the budget constraint FL, utility:

(Multiple Choice)

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Question 111

Explain why an individual's indifference curves cannot intersect. Use an example to explain.

(Essay)

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Question 112

If Paloma is consuming the utility-maximizing quantities of pizza and soda pop:

(Multiple Choice)

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Question 113

Use the following to answer questions: Scenario: E-Books and Sports Tickets Phillip has an income of $300 per month, which he uses to purchase two goods, e-books and sports tickets. Each e-book costs $10, and each ticket costs $15. -(Scenario: E-Books and Sports Tickets) Read the scenario E-Books and Sports Tickets. Phillip gets an increase in the amount of his monthly income allotted for e-books and sports tickets. Holding everything else constant, Phillip's budget line has:

(Multiple Choice)

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Question 114

The assumption that the farther from the origin an indifference curve is, the higher the level of utility it indicates implies that more is better.

(True/False)

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Question 115

Henry and Anne have identical incomes. Both buy only sardines and ice cream. Since they face the same prices for the two goods, their optimal consumption bundles must be identical.

(True/False)

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Question 116

Use the following to answer questions: Figure: The Optimal Consumption Bundle -(Figure: The Optimal Consumption Bundle) Look at the figure The Optimal Consumption Bundle. If the price of restaurant meals _, then the optimal consumption bundle will be on _ indifference curve.

(Multiple Choice)

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Question 117

Suppose Joe derives 327 utils from consuming 1 dozen crab cakes and 11 pairs of socks. If he also derives 327 utils from 2 dozen crab cakes and 5 pairs of socks, Joe is indifferent between those combinations of crab cakes and socks.

(True/False)

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Question 118

Mario sees popcorn and pretzels as perfect substitutes. He is always willing to substitute 3 cups of popcorn for 1 cup of pretzels. If the price of a cup of popcorn equals the price of a cup of pretzels, Mario will eat:

(Multiple Choice)

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Question 119

Use the following to answer questions: Figure: Consumer Equilibrium I The figure shows three of Owen's indifference curves for pizza and soda per week. Owen has $180 per month to spend on the two goods. The price of a pizza is $20, and the price of a soda is $1.50. -(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. What is Owen's optimal consumption bundle?

(Multiple Choice)

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Question 120

Showing 101 - 120 of 372

Steven consumes staples and paper clips. He is maximizing his utility in consumption of both goods. The price of staples rises. After the change in price Steven should consume _ staples and _ paper clips.

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:

If the substitution effect and the income effect of a price change move in opposite directions for a particular good, then the good must be an inferior good.

Miguel eats only burgers with onion rings. Miguel's indifference curve between burgers and onion rings must be a straight line.

If the price of a cookie is $2 and the price of a brownie is $4, the price of cookies in terms of brownies is:

A decrease in the price of a good, holding income and the prices of all other goods constant, is associated with:

The marginal decision on how to allocate an additional dollar allows consumers to:

Use the following to answer questions: Figure: Consumer Equilibrium III -(Figure: Consumer Equilibrium III) Look at the figure Consumer Equilibrium III. Kurt consumes at point A. Other things held equal, Kurt would be able to realize more total utility by choosing point:

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 I. Given the budget constraint FL, utility:

Explain why an individual's indifference curves cannot intersect. Use an example to explain.

If Paloma is consuming the utility-maximizing quantities of pizza and soda pop:

The assumption that the farther from the origin an indifference curve is, the higher the level of utility it indicates implies that more is better.

Henry and Anne have identical incomes. Both buy only sardines and ice cream. Since they face the same prices for the two goods, their optimal consumption bundles must be identical.

Use the following to answer questions: Figure: The Optimal Consumption Bundle -(Figure: The Optimal Consumption Bundle) Look at the figure The Optimal Consumption Bundle. If the price of restaurant meals _, then the optimal consumption bundle will be on _ indifference curve.

Suppose Joe derives 327 utils from consuming 1 dozen crab cakes and 11 pairs of socks. If he also derives 327 utils from 2 dozen crab cakes and 5 pairs of socks, Joe is indifferent between those combinations of crab cakes and socks.

Mario sees popcorn and pretzels as perfect substitutes. He is always willing to substitute 3 cups of popcorn for 1 cup of pretzels. If the price of a cup of popcorn equals the price of a cup of pretzels, Mario will eat:

First Principles

Economic Models: Trade-Offs and Trade 25

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals Firms

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods Common Resources

The Economics of the Welfare

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Exam 10: The Rational Consumer

Steven consumes staples and paper clips. He is maximizing his utility in consumption of both goods. The price of staples rises. After the change in price Steven should consume _____ staples and _____ paper clips.

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:

If the substitution effect and the income effect of a price change move in opposite directions for a particular good, then the good must be an inferior good.

Miguel eats only burgers with onion rings. Miguel's indifference curve between burgers and onion rings must be a straight line.

If the price of a cookie is $2 and the price of a brownie is $4, the price of cookies in terms of brownies is:

A decrease in the price of a good, holding income and the prices of all other goods constant, is associated with:

The marginal decision on how to allocate an additional dollar allows consumers to:

Use the following to answer questions: Figure: Consumer Equilibrium III -(Figure: Consumer Equilibrium III) Look at the figure Consumer Equilibrium III. Kurt consumes at point A. Other things held equal, Kurt would be able to realize more total utility by choosing point:

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 I. Given the budget constraint FL, utility:

Explain why an individual's indifference curves cannot intersect. Use an example to explain.

If Paloma is consuming the utility-maximizing quantities of pizza and soda pop:

The assumption that the farther from the origin an indifference curve is, the higher the level of utility it indicates implies that more is better.

Henry and Anne have identical incomes. Both buy only sardines and ice cream. Since they face the same prices for the two goods, their optimal consumption bundles must be identical.

Use the following to answer questions: Figure: The Optimal Consumption Bundle -(Figure: The Optimal Consumption Bundle) Look at the figure The Optimal Consumption Bundle. If the price of restaurant meals _____, then the optimal consumption bundle will be on _____ indifference curve.

Suppose Joe derives 327 utils from consuming 1 dozen crab cakes and 11 pairs of socks. If he also derives 327 utils from 2 dozen crab cakes and 5 pairs of socks, Joe is indifferent between those combinations of crab cakes and socks.

Mario sees popcorn and pretzels as perfect substitutes. He is always willing to substitute 3 cups of popcorn for 1 cup of pretzels. If the price of a cup of popcorn equals the price of a cup of pretzels, Mario will eat:

First Principles

Economic Models: Trade-Offs and Trade 25

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals Firms

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods Common Resources

The Economics of the Welfare

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Steven consumes staples and paper clips. He is maximizing his utility in consumption of both goods. The price of staples rises. After the change in price Steven should consume _ staples and _ paper clips.

Use the following to answer questions: Figure: The Optimal Consumption Bundle -(Figure: The Optimal Consumption Bundle) Look at the figure The Optimal Consumption Bundle. If the price of restaurant meals _, then the optimal consumption bundle will be on _ indifference curve.