Exam 5: The Demand Curve and the Behavior of Consumers

Suppose that Joe and Jane have been eating hotdogs until only one is left. Jane claims that she should get the last hotdog because she is hungrier. Jane has made a(n)

The change in total benefit as measured by willingness to pay for one more unit of a good is called

Which of the following will most likely happen when a person's income increases, other things being equal?

Marginal benefit is the

Exhibit 5-1 -Refer to Exhibit 5-1. As the individual consumes each additional can of soda, total utility

As a consumer's income rises, her indifference curves shift outward.

Economists generally agree that a comparison between the marginal utility of one person with that of another

Suppose Jane has $100 to spend on either compact disks, which cost $10 each, or hamburgers, which cost $2 each.

Using the information in Exhibit 5-4, which of the following combinations is preferred to 3 apples and 2 cans of cola?

Economists assume that marginal utility cannot be negative.

The total amount of money that you can spend on goods and services within a month is your monthly

The marginal utility of consuming a good increases at a decreasing rate.

A budget line identifies combinations of two goods that a consumer

On a supply and demand diagram, consumer surplus is the area

An increase in the price of a good

Suppose that Nicholas has $50 to spend on food and clothing. If Nicholas now has $100, then it is most likely that he will

Why is an individual willing to buy more of a good when its price falls?

Along a given indifference curve, marginal utility is constant.

The budget constraint cannot be affected by an individual's preferences.

Explain how it is possible to add individual demand curves, which are ragged and discontinuous, to get a smooth market demand curve.