Exam 6: Consumer Behaviour

The table below shows the total value in dollars) that Andrew gets from playing 9-hole rounds of golf. TABLE 6-3 -Refer to Table 6-3. If the price of a 9-hole round of golf is $9, then Andrew will play rounds per month.

FIGURE 6-1 -Refer to Figure 6-1. The marginal utility of the second unit of the good consumed is

An individualʹs consumer surplus from some product can be eliminated entirely by: 1) raising the price until very few units are bought. 2) charging a price for each unit that is equal to the individualʹs marginal value for each unit. 3) raising the price until zero units are purchased.

FIGURE 6-6 -Refer to Figure 6-6. Suppose the market price is p*. In this case, consumer surplus is outlined by the area

Assume you are consuming two goods, X and Y. X and Y are both normal goods but they are not close complements. The price of good X increases but the price of Y remains unchanged. However, you are given enough additional income to ensure that your utility remains unchanged. What happens to your consumption of good X?

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

The table below shows the total value in dollars) that Andrew gets from playing 9-hole rounds of golf. TABLE 6-3 -Refer to Table 6-3. Andrew values the 4th round of golf at a marginal value of

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 toffee bars and bags of cashews are both $1 and this consumer has $11 per week to spend on snacks, how many of each will he/she purchase?

Daveʹs Consumer Surplus on Movie Rentals per Week yes, we know no one rents movies anymore, but it makes a good example!) TABLE 6-2 -Refer to Table 6-2. If Dave rents 5 movies in one week, his total consumer surplus is and the total amount he pays is .

The figures below show Chrisʹs consumption of specialty coffee per week. FIGURE 6-10 -Refer to Figure 6-10. The slope of the budget line reflects the of specialty coffees in terms of all other goods.

Daveʹs Consumer Surplus on Movie Rentals per Week yes, we know no one rents movies anymore, but it makes a good example!) TABLE 6-2 -Refer to Table 6-2. If Dave rents 3 movies in one week, his total consumer surplus is and the total amount he pays is .

FIGURE 6-4 -Refer to Figure 6-4. For both goods, the price falls from P0 to P1. The substitution effect is illustrated by the change in quantity demanded from A to B; the income effect is illustrated by the change in quantity demanded from B to C. Good Y is certainly an) good.

FIGURE 6-2 -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?

For your typical consumption levels of water and diamonds, the good with the higher marginal utility is ; the good with the higher total utility is ; and the good with the greatest consumer surplus is )

At a garage sale, Ken purchases a used bicycle for $8 when he was willing to pay $25. If the bicycle costs $75 new, Kenʹs consumer surplus is

FIGURE 6-2 -Refer to Figure 6-2. Suppose that the price of X is $2, the price of Y is $1, and the consumerʹs income is $10. The consumer is currently buying 3 units of good X and 4 units of good Y. In order to maximize his/her utility, the consumer should

FIGURE 6-1 -Refer to Figure 6-1. If this figure represents the utility obtained from consuming units of a good, how many units would this consumer consume if the good were free?

The substitution effect is

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

FIGURE 6-6 -Refer to Figure 6-6. Suppose the market price is p*. In this case, the total value consumers place on consuming Q* units is outlined by the area