Exam 13: Consumer Choice and Demand

Moving along an indifference curve, if a consumer requires a large amount of the good measured along the y-axis to make up for one unit less of the good measured on the x-axis, then

Total utility ________ as a person consumes more of one good and marginal utility ________.

Mary likes to consume either pizza or spaghetti.She has $48 to spend on these meals. a∙One week the price of pizza is $8 and the price of spaghetti is $6.Mary uses the indifference curve analysis she learned in microeconomics to decide how much of each type of meal to buy.She puts pizza on the vertical axis and spaghetti on the horizontal axis.What is the marginal rate of substitution at the combination of pizza and spaghetti that Mary chooses? b∙The next week, the price of pizza is $6 and the price of spaghetti is $8 so Mary adjusts her consumption combination to maximize her total utility.What is her marginal rate of substitution now?

As more of a good is consumed, total utility

In a budget line/indifference curve diagram, at the consumer's equilibrium at the best affordable point,

Using Gabriel's budget line and his indifference curves between horseback riding lessons and baseball lessons, and then changing the prices of each activity holding his income constant, which of the following can be derived?

Describe the consumer equilibrium in the indifference curve/budget line model.

The benefit that John gets from eating an additional grape is called the ________ the grape.

Sam's budget is $60.00.The combinations of gasoline and coffee along one of Sam's indifference curves are combinations

Luke enjoys eating tuna sashimi and drinking Pepsi.His consumer equilibrium occurs where his budget line

When a consumer's budget increases, the budget line

If the total utility of 2 bags of chips is 25, the total utility of 3 bags is 33, and the total utility of 4 bags is 40 units, then the marginal utility of the 3rd and 4th bags are

What is the difference between a budget line and an indifference curve?

-Tris is shopping for pants and belts.He has a budget of $100.The price of a pair of pants is $20 and the price of a belt is $5.His marginal utility schedules are above.What combination of pants and belts does Tris buy? Explain your answer.

In order to draw Lucky's budget line, we need to know

If your budget increases, what is the effect on your budget line?

Why is the budget line negatively sloped?

-Which of the above figures reflects an increase in the consumer's budget?

If Tommy is consuming a combination of goods and services on his budget line, has he allocated his entire budget?

Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.If Sarah spends $170 per week on sushi, the maximum quantity of rose bushes can she buy each week is ________ bushes.