Exam 5: Consumer Choice: Individual and Market Demand

Table 5-2 Robinson's marginal utility C \ 2.00 \ 1.88 \ 1.60 \ 1.30 -According to Table 5-2, Robinson's total utility from having two coconuts is ____.

Figure 5-10 -In the indifference curve pictured in Figure 5-10, which of the following is clearly true?

Marginal utility has a negative slope.This is because of the

For most goods and most people, marginal utility probably

Elaine values the utility of her first cup of coffee at $1; a second cup, $.75; and a third cup, $.50.If Elaine drinks three cups of coffee for breakfast, her total utility is equal to

The budget line represents a consumer's preferences for a commodity.

Net utility is

Draw the point of consumer equilibrium from an indifference map and budget line.Explain why this is the point of optimization.Be sure your diagram is fully and correctly labeled.

An increase in income produces a parallel, outward shift in the budget line.

Gwen's decision to buy a new television instead of a bicycle for the same price

Figure 5-13 -In Figure 5-13, the line AB is

Figure 5-17 -Which of the following statements about Figure 5-17 must be correct?

Figure 5-16 -Figure 5-16 shows Adam's purchases of bananas and apples when apples cost $5 each and bananas $4 each.The information implies that Adam's income

If income rises, most consumers will increase the quantity demanded of an inferior good.

Figure 5-2 -In Figure 5-2, consumer surplus is measured by the area

Draw individual demands for caviar for Al, Barbara, Chuck, and Denise where Al's demand is relatively inelastic, Barbara's is elastic, Chuck's is upward sloping, and Denise refuses to eat caviar at any price.Then draw the corresponding market demand.

A well-known women's college whose tuition lagged below similar schools found recruiting difficult and enrollment falling.A substantial tuition increase was implemented, and dormitories were soon full again.This can be explained by

Figure 5-18 -In Figure 5-18, point D for the consumer

Plot the demand for caviar given the following information on quantity consumed and total utility; then explain why caviar sells for such a high price. 1 50 2 75 3 88 4 95 5 99

If the slope of an indifference curve between two goods decreases as we move from left to right (dropping all minus signs), we infer that the consumer