Exam 9: Possibilities, Preferences, and Choices

-A recent article suggests that the introduction of the new iPhone 5 increased the demand for iPhone protective cases. The article suggests that these two goods are

What is a household's real income?

A decrease in price allows a consumer to attain a higher indifference curve.

-Suppose that Dave has $200 to spend per week and he buys only magazines and pizza. The price of a pizza is $10 and the price of a magazine is $5. What is Dave's real income in terms of magazines?

-Which of the following will change the slopes of your indifference curves between gasoline and movie rentals?

-Preferences can be described as

-To draw your budget line between steak and lobster, all you need to know is your income.

-Consider the budget line in the above figure. If the consumer has income of $240, what is the relative price of movies?

-In the above figure, a shift in the budget line in the direction indicated would occur as a result of

-The marginal rate of substitution is equal to the ________.

-Given the budget line in the above figure, what is the relative price of pizza?

-The above figure gives your budget line between CDs and magazines. Which combination of CDs and magazines is not affordable?

-The indifference curves in the above figure could represent your indifference curves between

-Jordan has two goods that he consumes this week. He can choose to go to the arcade and play video games or he can purchase baseball cards. The price of each video game is $.50 and each pack of baseball cards is $1. Jordan will spend all his allowance this week on these two goods. Jordan's consumption possibilities are listed in the table above. Which of the following combinations of video games and baseball cards is not attainable for Jordan?

Nick considers macaroni and cheese to be an inferior good. As a result of macaroni and cheese being an inferior good, the

The magnitude of the slope of the budget line measures the

-Beta Alpha Psi is an accounting student professional organization with chapters on 279 campuses nationwide. Suppose each meeting the local chapter has $30 to spend on pizza and soda. If pizza costs $8 and the chapter buys 3, how much money can be spent on soda?

-The figure above shows one of Bob's indifference curves for CDs and books. a) Is the indifference curve steeper at point a or point b? b) What is Bob's marginal rate of substitution at point a? c) What is Bob's marginal rate of substitution at point b?

Joe has $50 to spend on pizza and movies. If movies are $5 each and a pizza is $10 then, assuming he spends all his money, he can buy which of the following bundle of goods?

-If Sue is consuming two normal goods and her income decreases, then her best affordable bundle of goods will contain ________ goods with ________ marginal rate of substitution as her bundle prior to her income change.