Exam 13: Consumer Choice and Demand

-The table above gives Sam's marginal utility schedule for bananas and apples.Sam's fruit budget is $10. a∙If bananas cost $1 per pound and apples cost $2 per bag, what is Sam's marginal utility per dollar for all quantities of both goods? b∙What is the utility maximizing combination of bananas and apples for Sam? c∙If the price of bananas increases to $2 per pound, how does Sam's marginal utility per dollar for bananas change? d∙At the banana price of $2 per pound, what is the new utility maximizing combination of bananas and apples for Sam? e∙List two points on Sam's demand curve for bananas.

-The figure above shows a consumer's budget line for sodas and DVD rentals.Point a represents an

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

What is the marginal rate of substitution and how does it relate to an indifference curve?

Explain the paradox of value.

Sheryl is maximizing her utility.She notices that her marginal utility from the last package of bubble gum consumed is greater than her marginal utility from the last package of mints consumed.This result means that the

-The table above shows Buffy's utility from wooden stakes and cloves of garlic.The total utility Buffy gets from 5 wooden stakes is

-The table above gives the utility Andy receives from different quantities of vanilla ice cream cones.Complete the table.

-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.

-The figure above gives a consumer's budget line and two indifference curves. a∙At which point is the marginal rate of substitution greater than the relative price? b∙At which point is the marginal rate of substitution less than the relative price? c∙Which point represents the consumer equilibrium?

If a person consumes only two goods, which of the following is NOT necessary for a consumer to be at his or her best affordable point of consumption?

Brenda's marginal utility per dollar from the second hamburger is 20.Her marginal utility from the third hamburger would be

Which of the following statements is correct?

If the price of the good measured on the x-axis becomes relatively cheaper, the budget line will

Consumers' preferences are described by

-The figure above shows Sarah's budget line.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.Sarah will be at what point on her budget line if she spends $500 per week on rose bushes?

An increase in a consumer's budget

Sue consumes oysters and clams.Pounds of oysters are measured on the y-axis and pounds of clams on the x-axis.If the slope of Sue's budget line is 5 pounds of oysters per pound of clams, Sue must

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

The demand curve for macadamia nuts is downward sloping.This slope is because consumers maximize their utility and an increase in the price of macadamia nuts leads to