Exam 5: Consumer Choice: Individual and Market Demand

A consumer possesses five pounds of bananas and values their total utility at $2.14.If one additional pound is acquired and marginal utility is 11 cents, total utility will

Use consumer indifference curves and budget lines to show the optimal consumption curves for a normal good and for an inferior good.(Use two graphs.) Be sure your graphs are completely and correctly labeled.

The slope of an indifference curve at all points reflects

For ____, if incomes rise and prices do not change, quantity demanded will increase.

Figure 5-16 -In Figure 5-16, Adam is

Total utility decreases when diminishing marginal utility is present.

Table 5-1B Robinson's marginal utility C \ 2.00 \ 1.88 \ 1.60 \ 1.30 -If a graph of Robinson's marginal utility were constructed from Table 5-1B, it would

When the price of one product falls,

According to the "law" of demand, we would expect

Table 5-1 $\begin{array}{llcc}\underline { \text { Number of milkshakes consumed}} & \underline {1 }& \underline {2 }& \underline { 3 } \\ \text { Total utility from millsshakes (in \$) } & \$ 23 & \$ 28 &\$ 31 \\\underline { \text { Number of sandwiches consumed }} & \underline {1 }& \underline {2 }& \underline { 3 } \\ \text {Total utility from sandwiches (in \$ )} & \$ 40& \$ 43 &\$ 45 \\\end{array}$ -Table 5-1 gives information on George's total utility from consuming milkshakes and sandwiches.If George's income this week is $15, milkshakes are $3 each, and sandwiches $2, he will maximize his utility if he buys

If the prices of both goods increase by 10 percent, the budget line

Figure 5-5 -Figure 5-5 shows a consumer budget line for French fries and hamburgers.The household allocates a budget for these two goods..If the price of an order of french fries is $2, how much income is allocated to fries and burgers combined?

Figure 5-4 -In Figure 5-4, the rightward shift in budget lines from the one containing point A to the one containing point B

By changing the amount of income a consumer has to spend, a change in the price of one good may affect the quantity demanded of another good.

Figure 5-5 -In Figure 5-5, if the household is spending enough of its budget to purchase 4 orders of fries and the price of an order of fries is $2, the remainder of the budget available for hamburgers is

Bob values the utility of a single scoop of Baskin-Robbins ice cream at $1.50.A double scoop gives total utility of $2.25, while a triple scoop yields $2.60.Baskin-Robbins charges $1.35 for a single, $1.95 for a double, and $2.35 for a triple.How many scoops will Bob buy?

Figure 5-1 -Americans choose cola over other flavors 70 percent of the time.Analysts say this is because cola's flavor is more robust and durable.Orange soda, for example, suffers from flavor fatigue faster than cola.Also, because cola contains caffeine, people may be addicted to the stimulant.Which panel in Figure 5-1 best illustrates these facts?

Utility is the pleasure, satisfaction, or enjoyment derived from consumption.

Which of the following observations is not true of a budget line?

Points along a budget line represent the maximum combinations of two commodities that a consumer can afford.