Exam 22: Consumer Preferences and Consumer Choice

Use the following to answer question: -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.Assume that you are consuming the combination of goods at point K.Given the budget constraint FL,utility can be increased by moving to point:

Use the following to answer question: -(Figure: Harold's Indifference Curves)Use Figure Harold's Indifference Curves.Given that the price of bread is $1 per loaf and the price of cheese is $2 per pound,as Harold's income increases from $10 to $14,we can determine that bread is a(n)_____ good and cheese is a(n)_____ good.

The assumption that the farther from the origin an indifference curve is,the higher the level of utility it indicates implies that more is better.

Higher indifference curves represent _____ lower curves.

Use the following to answer question: -(Figure: Kristin's Budget Line)Use Figure Kristin's Budget Line.The price of a cup of cappuccino is $3,and the price of an apple is $1.Given her income and the prices of the two goods,Kristin can consume _____ cappuccinos and _____ apples.

Use the following to answer question: -(Figure: Indifference Curves and Consumption Bundles)Use Figure Indifference Curves and Consumption Bundles.For this consumer pizza is a(n)_____ good and hot dogs are a(n)_____ good.

Use the following to answer question: -(Figure: Consumer Equilibrium III)Use Figure Consumer Equilibrium III.Which of the following statements is TRUE?

Use the following to answer question: -(Figure: Kristin's Budget Line)Use Figure Kristin's Budget Line.The price of a cup of cappuccino is $3,and the price of an apple is $1.Suppose Kristin initially consumes 10 cups of cappuccino and 30 apples.Then the price of apples increases to $3 each and the price of a cappuccino remains unchanged.As a result of this price change,Kristin's optimal consumption bundle changes,reflected by a decrease in the consumption of both apples and cappuccinos.This suggests that:

Use the following to answer question: -(Figure: Consumer Equilibrium III)Use Figure Consumer Equilibrium III.The highest level of total utility attainable is associated with point _____ on _____.

An indifference curve is a line showing all of the consumption bundles that:

When Laurie asks Matt if he wants a large popcorn and small soda or a large soda and small popcorn,Matt says,"Oh,I'm indifferent." This means Matt:

Greater levels of utility are represented by:

(Scenario: E-Books and Sports Tickets)Read the scenario E-Books and Sports Tickets.Measure e-books on the horizontal axis and sports tickets on the vertical axis.Suppose the price of e-books decreases.Holding everything else constant,Phillip's budget line has become _____,and his optimal consumption bundle will be on a _____ indifference curve. Scenario: E-Books and Sports Tickets Phillip has an income of $300 per month,which he uses to purchase two goods,e-books and sports tickets.Each e-book costs $10,and each ticket costs $15.

Use the following to answer question: -(Figure: Harold's Indifference Curves)Use Figure Harold's Indifference Curves.If the price of bread is $2 per loaf,the price of cheese is $2 per pound,and Harold has $10 to spend on bread and cheese,Harold's optimal consumption bundle is _____ loaves of bread and _____ pounds of cheese.

Use the following to answer question: -(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.A level of total utility NOT attainable is at point:

Use the following to answer question: -(Figure: Indifference Curves and Consumption Bundles)Use Figure Indifference Curves and Consumption Bundles.In the figure,the initial optimum is at a.The price of hot dogs increases,and the new equilibrium point is c.The change in hot dog consumption due to the income effect of the price change is:

Manny consumes only bananas and DVDs,and he is on his highest possible indifference curve.Two bundles on this indifference curve are bundle A (5 bananas and 2 DVDs),and bundle B (3 bananas and 3 DVDs).Between points A and B,what is Manny's marginal rate of substitution of bananas for DVDs?

Use the following to answer question: -(Figure: Consumer Equilibrium III)Use Figure Consumer Equilibrium III.Kurt consumes at point A.Other things held equal,Kurt would be able to realize more total utility by choosing point:

Use the following to answer question: -(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.Ashyra consumes at point G.Ashyra would be able to realize more total utility by choosing point _____,all other things held equal.

Use the following to answer question: -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.An unattainable level of utility,given budget constraint FL,is at point: