Exam 6: Consumer Behaviour

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

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,Dominiqueʹs consumer surplus would be

If a consumer is faced with a choice of products A,B,C,...,and has a given money income,the consumerʹs utility will be maximized when

Any consumption point that is on the budget line

The Smith family is allocating its monthly household expenditure between only two goods,food and clothing.Suppose that the price of food is $5 per unit,and the price of clothing is $10 per unit and that the marginal utility that the family is receiving from its consumption of food is currently 25.What is the familyʹs marginal utility from its consumption of clothing if it is maximizing its utility?

When a consumerʹs marginal rate of substitution between X and Y is equal to the ratio of prices for X and Y,and when the consumer is spending all available income,then

If consumption of an extra unit of some good generates a marginal utility of zero,then consumption of that additional unit would mean that total utility would

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

Given a particular consumerʹs indifference map,the further the indifference curve is from the origin

The table below shows the quantities of toffee bars and bags of cashews that a consumer could consume over a 1-week period. 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?

In indifference curve analysis,a point to the left of the consumerʹs budget line

Given a typical downward-sloping demand curve in a market that has reached its equilibrium,the consumer surplus

Indifference theory is based on the assumption that

The total value that Doug places on his consumption of computer games equals

The table below shows the quantities of toffee bars and bags of cashews that a consumer could consume over a 1-week period. TABLE 6-1 -Refer to Table 6-1.The maximum utility that a consumer can obtain from toffee bars and bags of cashews per week is

In which of the following situations will an individualʹs purchasing power be unaffected?

The ʺlawʺ of diminishing marginal utility implies that the

If the income effect of a price change is negative and larger in absolute terms than the substitution effect,then the demand curve will be

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?

An indifference curve plotted for two different goods on the axes