Exam 21: The Theory of Consumer Choice.

Monica consumes two goods,iced tea and spaghetti.The price of iced tea is $2 per bottle.Her income is $500 per month.She spends all her income each month.She purchases 50 bottles of iced tea and 100 servings of spaghetti.What is the price of a serving of spaghetti?

The consumer's optimum choice is represented by

When Ryan has an income of $2,000,he consumes 30 units of good A and 50 units of good B.After Ryan's income decreases to $1,500,he consumes 23 units of good A and 55 units of good B.Which of the following statements is correct?

Figure 21-5 -Refer to Figure 21-5.In graph (a),if income is equal to $120,the price of good Y is

Which of the following is an example of a Giffen good?

Scenario 21-3 Zach knows that he will ultimately face retirement. Assume that Zach will experience two periods in his life, one in which he works and earns income, and one in which he is retired and earns no income. Zach can earn $250,000 during his working period and nothing in his retirement period. He must both save and consume in his work period with an interest rate of 10 percent on savings. -Refer to Scenario 21-3.If the interest rate on savings increases,it is possible that

When indifference curves are bowed inward,the marginal rate of substitution is

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

Given a consumer's indifference map,the demand curve for a good can

Figure 21-9 -Refer to Figure 21-9.If the price of good Y is $5,what is the price of good X?

When Matt has an income of $2,000,he consumes 30 units of good A and 50 units of good B.After Matt's income increases to $3,000,he consumes 25 units of good A and 95 units of good B.Which of the following statements is correct?

An increase in income will cause a consumer's budget constraint to

Figure 21-15 -Refer to Figure 21-15.The price of X is $25,the price of Y is $25,and the consumer's income is $100.Which point represents the consumer's optimal choice?

Which of the following is not correct?

Figure 21-19 The following graph illustrates a representative consumer's preferences for marshmallows and chocolate chip cookies: -Refer to Figure 21-19.Assume that the consumer has an income of $40.Based on the information available in the graph,which of the following price-quantity combinations would be on her demand curve for marshmallows if the price of chocolate chips were $4?

Figure 21-11 -Refer to Figure 21-11.The graph illustrates

When indifference curves are bowed in toward the origin,

A Giffen good is a good for which

Figure 21-19 The following graph illustrates a representative consumer's preferences for marshmallows and chocolate chip cookies: -Refer to Figure 21-19.Assume that the consumer depicted the figure has an income of $50.Based on the information available in the graph,which of the following price-quantity combinations would be on her demand curve for chocolate chips if the price of marshmallows is $2.50?

Suppose a consumer spends his income on CDs and DVDs.If his income decreases,the budget constraint for CDs and DVDs will