Exam 6: Consumer Behaviour

Assume the quantity of good X is measured on the horizontal axis and the quantity of good Y on the vertical axis.Initial prices are PX = $5 and PY = $10.The consumer's income is $100.If PY increases to $20,then

Assume you are consuming two goods,X and Y.Suppose that the money prices for X and Y remain unchanged,but your income increases by 20%.What happens to your consumption of good X?

FIGURE 6- 12 Sophie consumes two goods - paperback novels and visits to the movies. -Refer to Figure 6- 12.Sophie's movement from point A to point B is the

Suppose a consumer can purchase only two goods,soap and apples.If the price of soap falls and the consumption of apples increases,we can conclude that the increased consumption of apples is due to

Laurie spends all of her money buying bread and cheese.The marginal utility she receives from the last loaf of bread is 60 and from the last block of cheese is 30.The price of bread is $3 and the price of cheese is $2.Laurie

If consumption of an extra unit of a product delivers a positive marginal utility,then consumption of that additional unit would mean

The diagram below shows a set of budget lines facing a household. FIGURE 6- 8 -Refer to Figure 6- 8.The movement of the budget line from ab to ef could be caused by

Given a particular market demand curve,consumer surplus is

A basic hypothesis of marginal utility theory is that the utility a consumer derives from successive units of a good diminishes as total consumption of the good increases.This hypothesis is known as

The table below shows the quantities of toffee bars and bags of cashews that a consumer could consume over a 1- week period. Toffee (bars) Cashews (bags) Units Marginal Utility Total Utility Marginal Utility Total Utility 1 10 10 12 12 2 8 18 10 22 3 5 23 7 29 4 3 26 5 34 5 1 27 2 36 6 0 27 1 37 7 0 27 0 27 TABLE 6- 1 -Refer to Table 6- 1.If the prices of both toffee bars and bags of cashews are $2 and this consumer has $14 per week to spend on these two snacks,what is the maximum total utility achievable?

If John consumes only two goods,A and B,and he is maximizing his utility subject to his budget constraint,

At a garage sale,Dominique purchases a sewing machine for $30 when she was willing to pay $55.If the sewing machine costs $200 new,Dominique's consumer surplus would be

The paradox in "the paradox of value" refers to the

The demand curve for a good with an income elasticity of less than one

The figures below show Chris's consumption of specialty coffee per week. FIGURE 6- 10 -Refer to Figure 6- 10.The two diagrams in Figure 6- 10 are showing

The "law" of diminishing marginal utility implies that the

The table below shows the total value (in dollars)that Andrew gets from playing 9- hole rounds of golf. Rounds of Golf per Month Total Value (\ ) 0 0 1 40 2 70 3 92 4 108 5 120 6 130 7 130 TABLE 6- 3 -Refer to Table 6- 3.If the price of a 9- hole round of golf is $19,then Andrew will play rounds per month.

Consider the income and substitution effects of price changes.The income effect refers to the change in quantity demanded that occurs as a result of a change in

Consider a consumer who divides his income between spending on good X and good Y.The opportunity cost of good X in terms of good Y is reflected by the

Bjorn is a student with a monthly budget of $500,which he allocates between transportation services and "all other goods." Suppose the price of transportation is $5 per unit,and the price of "all other goods" is $20 per unit.The marginal utility he currently receives from his consumption of transportation services is 60.What is his marginal utility from the consumption of "all other goods" if he is maximizing his utility?