Exam 6: Consumer Choice

The Jones family is going to Disney World and has set a budget of $2000 for food and souvenirs.If Mr.Jones finds a $50 bill on the ground during their trip and uses it to purchase additional souvenirs,then

If bread costs $1 per pound and meat costs $4 per pound,a consumer whose marginal utility of meat equals 80 utils per pound is maximizing utility only if the marginal utility per pound of bread equals

-Figure 6-6 shows the total utility that Jerry would receive from consuming several different quantities of apples per week.What can be said about Jerry's utility schedule for apples?

Suppose there are only two goods,food and clothing,with food measured on the vertical axis.If the price of clothing changes,holding all else constant,

Housing is a normal good.That means

Steak is a normal good.If the price of steak increases,

Procrastination,addiction,and honesty

If income decreases,the budget constraint will shift in but the slope will remain the same.

Stanley receives the following marginal utilities from the first four car washes that he buys each year,respectively: 20,15,10,and 5.If each car wash sells for $10,then the marginal utility per dollar spent on the third car wash is

Normal goods always obey the law of demand because,as the price of such a good rises,the

The market demand curve for a particular good

A utility-maximizing consumer will

A consumer's budget line shows

For a normal good,the substitution and income effects of a price decrease work in the same direction to increase the quantity demanded of that good.

Suppose you have spent your entire budget and the marginal utilities per dollar spent on all the goods you buy are equal.Which of the following is true?

Steve is planning to divide his study time between English and calculus.It will take him two hours of study for each extra point in calculus and one hour of study to raise his English score by one point.He should allocate his time so that

As the price of a computer falls,overall

Beginning at the horizontal axis intercept,as a consumer moves upward along the budget line,he will find that

The income effect measures how

If the price of a hamburgers increases,the substitution effect works to