Exam 5: Consumer Choice: Individual and Market Demand

Suppose that Joan, the only consumer of pork, has a downward-sloping demand curve for pork and faces an upward-sloping supply curve.If her demand curve shifts out because she develops a craving for pork, then at the new equilibrium (everything else equal),

Figure 5-15 -Hal initially consumes the combination marked as A in Figure 5-15.After his income increases, Hal consumes combination B.We can conclude that Hal views

You have five hours left to study for two exams tomorrow.The relationship between hours of study and test scores is as follows: Use the rule for determining optimal purchases to allocate your time, where each point is one "util" of utility.

By changing the amount of income a consumer has to spend, a change in the price of one good may affect the quantity demanded of another good.

Economists consider instances of increasing marginal utility to be

Use consumer indifference curves and budget lines to illustrate the effects of an increase in income for a normal good and an inferior good (use two graphs).Be sure your diagrams are fully and correctly labeled.

Table 5-1B -If a graph of Robinson's marginal utility were constructed from Table 5-1B, it would

Which of the following statements is correct?

Figure 5-8 -In Figure 5-8, the consumer is indifferent between the combinations of beer and wine coolers indicated by points

Marginal utility is

Total utility increases if one more unit of a product is purchased and marginal utility is positive.

Consumers should purchase a good up to the point where MU = P.

The marginal rate of substitution represents the maximum amount of one commodity a consumer is willing to give up in exchange for one more unit of another commodity.

A consumer will go to a point on the highest attainable indifference curve.

Figure 5-7 -In Figure 5-7, budget line B compared to A clearly shows that the

The law of diminishing marginal utility guarantees that demand curves will have positive slopes.

Are there ever exceptions to the law of demand?

The resolution of Adam Smith's diamond-water puzzle is based on the distinction between marginal and total utility.

Figure 5-9 -In Figure 5-9, the consumer's marginal rate of substitution at his optimum choice of X and Y is

The host at a party offers Justin a sixth beer.Justin says, "No thanks, man.The marginal utility of that fifth beer was, like, 20 cents, but the marginal utility of the sixth would be minus 10 cents." If Justin consumes the sixth beer, his total utility will