Exam 6: Consumer Choice

If the price of good X (measured on the horizontal axis of a budget line diagram)increases at the same time that the price of good Y (measured on the vertical axis)increases,the budget line

If food is measured on the horizontal axis of budget line diagram,and clothing is measured on the vertical axis,an increase in

Which of the following could change a consumer's budget line?

An inferior good is one that

If a consumer allocates her income between two goods,x and y,then she will be in equilibrium when

If the substitution effect of a lowered price is partly or fully offset by the income effect,we know that the good in question is a(n)

If Bill asks for a second helping of pancakes,then his

Imagine a budget line depicting a consumer's possible allocation of a given income between fruit and vegetables.If the consumer's income increases at the same time the price of vegetables rises,the budget line's intercept with the

Figure 6-3 Income = $ 200 Price per Ticket = $40 Price per Compact Disk $ 20 -Joe spends all of his money on concert tickets and compact disks.Figure 6-3 shows his budget constraint when his income is $200.The price of a ticket is $40,while the price of a compact disk is $20.What would happen to Joe's budget line if his income increased to $300 and the prices of concert tickets and compact disks each increased by 50 percent?

A utility-maximizing consumer will choose a collection of goods

Hamburger is an inferior good.If the price of hamburger increases,

Economists usually assume that all consumers have the same tastes and preferences.

-Figure 6-7 shows the marginal utilities Kate receives from buying hamburgers and frozen pizzas,assuming she buys only these two goods.Each hamburger sells for $5 and each pizza sells for $4.What is her marginal utility per dollar spent on the fourth hamburger?

An increase in the price of the good measured on the horizontal axis of a budget line diagram will

Steak is a normal good.A decrease in the price of steak

Figure 6-1 Income = $ 100 Price per Ticket = $20 Price per Compact Disk $ 10 -Joe spends all of his money on concert tickets and compact disks.Figure 6-1 shows his budget constraint when his income is $100.The price of a ticket is $20,while the price of a compact disk is $10.What is the opportunity cost of a compact disk?

Inferior goods typically obey the law of demand because the substitution effect tends to dominate the income effect.

Biscuits are an inferior good for Aster,then if their price falls,she

If the price of paint increases,the substitution effect will cause

Consuming goods until the ratio of marginal utilities of the goods is equal to the ratio of their prices is consistent with maximizing total utility.