Exam 13: Consumer Choice and Demand

For David,the marginal utility from an additional car is 2,000 units and the marginal utility from an additional vacation is 1,000 units.David is allocating all his budget.Hence to maximize his utility,David will

-Amy has the total utility values given above for video rentals a week.Complete the table by calculating her marginal utilities.

Bottles of Soda Slices of Pizza -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 he buys ________ bottles of soda and ________ slices of pizza.

You consume hamburgers and hot dogs.If the price of a hamburger increases while the price of a hot dog and your budget do not change,then your budget line will

Timmy makes $100 per week as a taxidermist.He spends all this income to buy pizza and hair gel.The price of a pizza is $10 and the price of a bottle of hair gel is $4.If Timmy buys 5 bottles of hair gel,then he buys ________ pizzas.

As Sam moves rightward along his indifference curve,his marginal rate of substitution for the good on the horizontal axis

An indifference curve is a line that shows

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.

At all points on a demand curve,the i.consumer's budget has been allocated to maximize total utility. ii.quantity is the quantity demanded at each price when total utility is maximized. iii.price represents the marginal benefit the consumer gets from an extra unit of a good.

Nadir and Nina consume the same goods.If Nadir has more income than Nina,then Nina's budget line will

An indifference curve shows all combinations of two goods

Suppose the price of a pair of jeans is $25 and the price of a T-shirt is $15.The consumer's budget is entirely allocated.If the marginal utility from a pair of jeans is 100 units and the marginal utility from a T-shirt is 75 units,the consumer is

If a consumer's budget increases,the budget line

In an indifference curve/budget line framework,how does a consumer decide which of all possible combinations of goods to purchase?

An indifference curve is a line that shows combinations of goods among which a consumer

-Which of the above figures reflects an increase in the price of fish?

-George has a $600 annual entertainment budget that he uses to buy trips to the movies and dinners at local restaurants.The figure above shows indifference curves and budget lines for these two goods.The price of a movie is $15. a.Along budget line BL₁,what is the price of a dinner? b.What combination of dinners and movies will George select along budget line BL₁? c.Budget line BL₂ represents a change in the price of dinners from that along BL₁.What is the new price of dinners along this budget line? d.What combination of dinners and movies will George select along budget line BL₂? e.Use the information in this problem to give two points on George's demand curve for dinners.

Consumers' preferences are described by

When the indifference curve is steep,the consumer has a

An increase in a consumer's budget