Exam 5: Consumers and Incentives

The manager of the Kendall Square Bertucci's conducted a pricing experiment in August 2016. For the week of August 14-20, 2016, he lowered the price of Bertucci's signature pizza, the small Bertucci, from $13.00 to $11.00. As a result, weekly sales of the small Bertucci rose from 15,000 to 21,000 (see the table below). The manager knows his costs did not change from week to week and is confident there were no other external shocks to demand during this time. -Using the arc or midpoint elasticity formula,the price elasticity of demand for the small Bertucci pizza at the Kendall Square Bertucci's restaurant is ________.

The following figure illustrates the market demand curve for wine. -Refer to the figure above.What is the market-wide consumer surplus when the market price of wine is $18 per bottle?

While making a purchase decision,a buyer should buy the good that yields the highest ________.

Your budget constraint contains ________.

The consumption bundle that maximizes a consumer's satisfaction given her income is located ________.

Assume that a combination of 10 bottles of wine and 2 cartons of milk lies on a consumer's budget constraint.If the price of one bottle of wine is $10 and the price of one carton of milk is $1,what is the consumer's income?

In a set of indifference curves,why do the indifference curves that lie to the right represent higher levels of utility?