Question 1

In the following graph the consumer's income is $1,200.What is Y1?

Accepted Answer

A) 30 
B) 80 
C) 110 
D) 120 
E) none of the above 
A) 30 
B) 80 
C) 110 
D) 120 
E) none of the above

Question 2

slope of an indifference curve

Accepted Answer

A) shows the change in utility from an additional unit of the good. 
B) shows the rate at which the consumer is able to substitute goods in the market. 
C) is equal to the price ratio at all points. 
D) is the rate at which the consumer is willing to exchange one good for another,utility held constant. 
E) all of the above 
A) shows the change in utility from an additional unit of the good. 
B) shows the rate at which the consumer is able to substitute goods in the market. 
C) is equal to the price ratio at all points. 
D) is the rate at which the consumer is willing to exchange one good for another,utility held constant. 
E) all of the above

Question 3

The figure below shows a consumer maximizing utility at two different prices (the left panel)and the consumer's demand for good X at the same two prices of good X (the right panel).The price of good Y is $4.50.When the price of X increases from point S to point R along the demand curve,the total effect of the price increase is ________.

Accepted Answer

A) +2 
B) +2.5 
C) -15.5 
D) -18 
E) -21 
A) +2 
B) +2.5 
C) -15.5 
D) -18 
E) -21

Question 4

Marginal utility is

Accepted Answer

A) the utility obtained from the consumption of all but the last unit of a good. 
B) the relative value of two goods when a utility-maximizing decision has been made. 
C) the change in utility that results from increasing the amount of a good consumed by one unit. 
D) the change in the amount of a good consumed that increases total utility by one unit. 
A) the utility obtained from the consumption of all but the last unit of a good. 
B) the relative value of two goods when a utility-maximizing decision has been made. 
C) the change in utility that results from increasing the amount of a good consumed by one unit. 
D) the change in the amount of a good consumed that increases total utility by one unit.

Question 5

In the following graph the price of Y is $15.What is $$X _ { 1 }$$ ?

Accepted Answer

A) 10 
B) 12 
C) 18 
D) 20 
E) none of the above 
A) 10 
B) 12 
C) 18 
D) 20 
E) none of the above

Question 6

Ronald,who consumes only hamburgers and hot dogs,has a weekly income of $50.He is currently consuming 20 hamburgers,at a price of $2 each,and 10 hot dogs,at a price of $1 each.If the last hamburger and the last hot dog both added 50 units to Ronald's total utility,he

Accepted Answer

A) is making the utility-maximizing choice. 
B) should buy more hamburgers and fewer hot dogs. 
C) should buy more hot dogs and fewer hamburgers. 
D) obtains more additional utility per dollar from hot dogs than from hamburgers. 
E) both c and d 
A) is making the utility-maximizing choice. 
B) should buy more hamburgers and fewer hot dogs. 
C) should buy more hot dogs and fewer hamburgers. 
D) obtains more additional utility per dollar from hot dogs than from hamburgers. 
E) both c and d

Question 7

What is the equation for budget line LM,given in the above graph?

Accepted Answer

A) Y = 10 + 1.5X 
B) Y = 10 - (2/3)X 
C) Y = 1.5 + 1.5X 
D) Y = 1.5 -10X 
E) Y = 0.667 + 1.5X 
A) Y = 10 + 1.5X 
B) Y = 10 - (2/3)X 
C) Y = 1.5 + 1.5X 
D) Y = 1.5 -10X 
E) Y = 0.667 + 1.5X

Question 8

The price of X is $20 and the price of Y is $40.

-Based on the above graph,at point B,

Accepted Answer

A) if the consumer obtains one more unit of Y,½ unit of X must be foregone in order to keep utility unchanged. 
B) if the consumer obtains one more unit of X,two units of Y must be foregone in order to keep utility unchanged. 
C) the marginal rate of substitution is ½. 
D) both a and c 
E) all of the above 
A) if the consumer obtains one more unit of Y,½ unit of X must be foregone in order to keep utility unchanged. 
B) if the consumer obtains one more unit of X,two units of Y must be foregone in order to keep utility unchanged. 
C) the marginal rate of substitution is ½. 
D) both a and c 
E) all of the above

Question 9

Ms.Birnbaum is buying bottles of beer and bags of pretzels.The marginal utility of the last bottle of beer is 60 and the marginal utility of the last bag of pretzels is 30.The price of beer is $0.30 per bottle and the price of pretzels is $0.20 per bag.Ms.Birnbaum

Accepted Answer

A) is buying beer and pretzels in the utility-maximizing amounts. 
B) should buy more beer and fewer pretzels. 
C) should buy more pretzels and less beer. 
D) is not spending all her income. 
A) is buying beer and pretzels in the utility-maximizing amounts. 
B) should buy more beer and fewer pretzels. 
C) should buy more pretzels and less beer. 
D) is not spending all her income.

Question 10

In the following graph the price of Y is $50.If U2 is the maximum attainable utility,the price of X is

Accepted Answer

A) $10. 
B) $15. 
C) $20. 
D) $25. 
E) none of the above 
A) $10. 
B) $15. 
C) $20. 
D) $25. 
E) none of the above

Question 11

The following figure shows a portion of a consumer's indifference map and budget lines.The price of good Y is $7 and the consumer's income is $700.Let the consumer begin in utility-maximizing equilibrium at point A on indifference curve I.Next the price of good X changes so that the consumer moves to a new utility-maximizing equilibrium at point B on indifference curve II.Which of the following points are NOT points on this consumer's demand curve?

Accepted Answer

A) Px = $5 and Qx = 60 
B) Px = $10 and Qx = 70 
C) Px = $5 and Qx = 70 
D) Px = $10 and Qx = 28 
E) a and b are NOT points on demand 
A) Px = $5 and Qx = 60 
B) Px = $10 and Qx = 70 
C) Px = $5 and Qx = 70 
D) Px = $10 and Qx = 28 
E) a and b are NOT points on demand

Question 12

The market demand curve

Accepted Answer

A) shows how much all consumers demand at various prices. 
B) is the vertical summation of the demand curves of all the consumers in the market. 
C) is quite complex to construct,given the demand curves of the individual consumers. 
D) all of the above 
A) shows how much all consumers demand at various prices. 
B) is the vertical summation of the demand curves of all the consumers in the market. 
C) is quite complex to construct,given the demand curves of the individual consumers. 
D) all of the above

Question 13

According to the Rolling Stones,"You can't always get what you want." Which does this mean in the context of utility maximization?

Accepted Answer

A) A bundle of goods between the budget line and the origin 
B) Vertical indifference curves 
C) A bundle of goods above the budget line 
D) Horizontal indifference curves 
A) A bundle of goods between the budget line and the origin 
B) Vertical indifference curves 
C) A bundle of goods above the budget line 
D) Horizontal indifference curves

Question 14

The consumer's income is $800.
-According to the above figure,what is the consumer's marginal rate of substitution in equilibrium?

Accepted Answer

A) 1.5 
B) 2 
C) 2.5 
D) 0.8 
E) unable to tell from information given 
A) 1.5 
B) 2 
C) 2.5 
D) 0.8 
E) unable to tell from information given

Question 15

In the following graph the price of Y is $50.The consumer's demand curve for X is

Accepted Answer

A) D1. 
B) D2. 
C) D3. 
D) D4. 
A) D1. 
B) D2. 
C) D3. 
D) D4.

Question 16

The consumer's income is $800.
-According to the above figure,why doesn't the consumer choose the combination at point B?

Accepted Answer

A) The consumer is willing to give up more X for additional units of Y than the rate in the market. 
B) The marginal utility of Y exceeds the marginal utility of X. 
C) The marginal utility per dollar spent on Y exceeds the marginal utility per dollar spent on X. 
D) both a and c 
E) both b and c 
A) The consumer is willing to give up more X for additional units of Y than the rate in the market. 
B) The marginal utility of Y exceeds the marginal utility of X. 
C) The marginal utility per dollar spent on Y exceeds the marginal utility per dollar spent on X. 
D) both a and c 
E) both b and c

Question 17

The following figure shows a portion of a consumer's indifference map and budget lines.The price of good Y is $17 and the consumer's income is $7,650.Let the consumer begin in utility-maximizing equilibrium at point A on indifference curve II.Next the price of good X changes so that the consumer moves to a new utility-maximizing equilibrium at point B on indifference curve I.Good X is a(an)___________ good but not a _________ good.

Accepted Answer

A) normal; substitute 
B) normal; Giffen 
C) inferior; Giffen 
D) Giffen; normal 
E) Giffen; substitute 
A) normal; substitute 
B) normal; Giffen 
C) inferior; Giffen 
D) Giffen; normal 
E) Giffen; substitute

Question 18

The following figure shows a portion of a consumer's indifference map and budget lines.The price of good Y is $17 and the consumer's income is $7,650.Let the consumer begin in utility-maximizing equilibrium at point A on indifference curve II.Next the price of good X changes so that the consumer moves to a new utility-maximizing equilibrium at point B on indifference curve I.Which of the following points are points on this consumer's demand curve?

Accepted Answer

A) Px = $8.50 and Qx = 200 
B) Px = $8.50 and Qx = 300 
C) Px = $25.50 and Qx = 200 
D) Px = $25.50 and Qx = 300 
E) both b and c are points on demand 
A) Px = $8.50 and Qx = 200 
B) Px = $8.50 and Qx = 300 
C) Px = $25.50 and Qx = 200 
D) Px = $25.50 and Qx = 300 
E) both b and c are points on demand

Question 19

A consumer has the indifference map shown below.The market prices of X and Y are $20 and $12,respectively.The consumer has $1,000 to spend on goods X and Y.The utility-maximizing bundle ________ (is,is not)a corner solution because __________________.

Accepted Answer

A) is; the consumer spends all income on good X to buy 50 units of X. 
B) is; the consumer spends all income on good Y to buy 50 units of Y. 
C) is not; the consumer buys 10 units of X and 40 units of Y. 
D) is not; MRS equals the slope of the budget line. 
E) is not; MRS does not equal the slope of the budget line. 
A) is; the consumer spends all income on good X to buy 50 units of X. 
B) is; the consumer spends all income on good Y to buy 50 units of Y. 
C) is not; the consumer buys 10 units of X and 40 units of Y. 
D) is not; MRS equals the slope of the budget line. 
E) is not; MRS does not equal the slope of the budget line.

Question 20

The price of X is $20 and the price of Y is $40.
 
-Based on the above graph,if income is $800,how many units of Y will the consumer choose?

Accepted Answer

A) 6 
B) 7 
C) 8 
D) 9 
E) 10 
A) 6 
B) 7 
C) 8 
D) 9 
E) 10

In the following graph the consumer's income is $1,200.What is Y₁?

slope of an indifference curve

Marginal utility is

In the following graph the price of Y is $15.What is $X _ { 1 }$ ? $In the following graph the price of Y is $15.What is X _ { 1 } ?$

Ronald,who consumes only hamburgers and hot dogs,has a weekly income of $50.He is currently consuming 20 hamburgers,at a price of $2 each,and 10 hot dogs,at a price of $1 each.If the last hamburger and the last hot dog both added 50 units to Ronald's total utility,he

What is the equation for budget line LM,given in the above graph?

The price of X is $20 and the price of Y is $40. -Based on the above graph,at point B,

Ms.Birnbaum is buying bottles of beer and bags of pretzels.The marginal utility of the last bottle of beer is 60 and the marginal utility of the last bag of pretzels is 30.The price of beer is $0.30 per bottle and the price of pretzels is $0.20 per bag.Ms.Birnbaum

In the following graph the price of Y is $50.If U₂ is the maximum attainable utility,the price of X is

The market demand curve

According to the Rolling Stones,"You can't always get what you want." Which does this mean in the context of utility maximization?

The consumer's income is $800. -According to the above figure,what is the consumer's marginal rate of substitution in equilibrium?

In the following graph the price of Y is $50.The consumer's demand curve for X is

The consumer's income is $800. -According to the above figure,why doesn't the consumer choose the combination at point B?

A consumer has the indifference map shown below.The market prices of X and Y are $20 and $12,respectively.The consumer has $1,000 to spend on goods X and Y.The utility-maximizing bundle (is,is not)a corner solution because __________.

The price of X is $20 and the price of Y is $40. -Based on the above graph,if income is $800,how many units of Y will the consumer choose?

Managers,profits,and Markets

Demand,supply,and Market Equilibrium

Marginal Analysis for Optimal Decisions

Basic Estimation Techniques

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

Exam 5: Theory of Consumer Behavior

In the following graph the consumer's income is $1,200.What is Y1?

slope of an indifference curve

Marginal utility is

In the following graph the price of Y is $15.What is X1X _ { 1 }X1​ ?

Ronald,who consumes only hamburgers and hot dogs,has a weekly income of $50.He is currently consuming 20 hamburgers,at a price of $2 each,and 10 hot dogs,at a price of $1 each.If the last hamburger and the last hot dog both added 50 units to Ronald's total utility,he

What is the equation for budget line LM,given in the above graph?

The price of X is $20 and the price of Y is $40. -Based on the above graph,at point B,

Ms.Birnbaum is buying bottles of beer and bags of pretzels.The marginal utility of the last bottle of beer is 60 and the marginal utility of the last bag of pretzels is 30.The price of beer is $0.30 per bottle and the price of pretzels is $0.20 per bag.Ms.Birnbaum

In the following graph the price of Y is $50.If U2 is the maximum attainable utility,the price of X is

The market demand curve

According to the Rolling Stones,"You can't always get what you want." Which does this mean in the context of utility maximization?

The consumer's income is $800. -According to the above figure,what is the consumer's marginal rate of substitution in equilibrium?

In the following graph the price of Y is $50.The consumer's demand curve for X is

The consumer's income is $800. -According to the above figure,why doesn't the consumer choose the combination at point B?

A consumer has the indifference map shown below.The market prices of X and Y are $20 and $12,respectively.The consumer has $1,000 to spend on goods X and Y.The utility-maximizing bundle ________ (is,is not)a corner solution because __________________.

The price of X is $20 and the price of Y is $40. -Based on the above graph,if income is $800,how many units of Y will the consumer choose?

Managers,profits,and Markets

Demand,supply,and Market Equilibrium

Marginal Analysis for Optimal Decisions

Basic Estimation Techniques

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

In the following graph the consumer's income is $1,200.What is Y₁?

In the following graph the price of Y is $15.What is $X _ { 1 }$ ? $In the following graph the price of Y is $15.What is X _ { 1 } ?$

In the following graph the price of Y is $50.If U₂ is the maximum attainable utility,the price of X is

A consumer has the indifference map shown below.The market prices of X and Y are $20 and $12,respectively.The consumer has $1,000 to spend on goods X and Y.The utility-maximizing bundle (is,is not)a corner solution because __________.