Exam 13: Consumer Choice and Demand

If Bill's income increases from $30,000 per year to $41,000 per year.He consumes pickup trucks and lamb chops,so with his increase in budget Bill's budget line shifts outward.This increase in Bill's budget means he can consume more trucks and more lamb." Are these statements true or false? Briefly explain your answer.

Quantity Total utility Quantity Total utility 0 0 0 0 1 8 1 10 2 14 2 19 3 18 3 27 4 21 4 34 5 23 5 40 6 24 6 45 -The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.The price of pizza is $2 per slice and the price of soda is $1 per bottle.Ali has $14 in his budget.When Ali maximizes his utility,how many bottles of soda does he buy?

Suppose the consumer has allocated his or her entire budget.Which of the following conditions is also required for total utility to be maximized?

The paradox of value with respect to water and diamonds can be explained using consumer surplus because

Diminishing marginal utility means that an increase in the consumption of a good leads to

-The figure above shows Sarah's budget line.Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.Sarah is NOT able to purchase the combination of

Sushi costs $3 per piece.Cynthia's total utility after eating one piece is 30 and her total utility after eating 2 pieces is 51,so her marginal utility from the second piece is

Which of the following describes what happens to a consumer's budget line if that consumer's budget increases?

In the indifference curve/budget line framework,at the consumer equilibrium,the consumer

One reason why water is cheap compared to diamonds is because the

Sushi costs $3 per piece.Cynthia's total utility after eating one piece is 30 and her total utility after eating 2 pieces is 51,so her marginal utility per dollar from the second piece is

Carter spends his entire budget on pizza and Pepsi.He maximizes his utility when he allocates his entire available budget and buys pizza and Pepsi so that the

Jen consumes 5 CDs and 2 tacos.She receives 500 units of utility from her 5th CD and 200 units of utility from her 2nd taco.The price of a CD is $10,the price of a taco is $4,and she is spending her entire budget.Which of the following is true regarding Jen's choices?

Which of the following is true if Clarice is at her consumer equilibrium? i.Clarice is on her budget line. ii.Clarice is on her highest attainable indifference curve. iii.Clarice is dividing her budget equally across all goods.

If the price of a soda is $1 and the price of a sub sandwich is $5,the relative price of a sub sandwich is ________ because ________.

Quantity Total utility Quantity Total utility 0 0 0 0 1 8 1 10 2 14 2 19 3 18 3 27 4 21 4 34 5 23 5 40 6 24 6 45 -The table above gives Ali's total utility from consuming bottles of soda and slices of pizza.The price of pizza is $2 per slice and the price of soda is $1 per bottle.Ali has $14 in his budget.When Ali maximizes his utility,how many slices of pizza does he buy?

The consumption of bottled water increased dramatically during the 1990s.If consumers' utility schedules for water remained constant over this time period,in order for consumers to stay in equilibrium,the price of bottled water must have

The fact that diamonds have a much higher price than water

The demand curve for macadamia nuts is downward sloping.This slope is because consumers maximize their utility and an increase in the price of macadamia nuts leads to

When the relative price of computers falls,consumption possibilities ________ because ________.