Exam 6: Consumer Behaviour

FIGURE 6-2 -Refer to Figure 6-2. Suppose that the price of Y is $1 and the consumerʹs income is $10. Initially, the price of X is $2 and the consumer is buying 4 units of good Y. If the price of X then falls to $1, which of the following pairs of quantities of X correctly completes the demand schedule below?

The figures below show Chrisʹs consumption of specialty coffee per week. FIGURE 6-10 -Refer to Figure 6-10. The line connecting points A, B and C is . The line connecting points D, E and F is .

Assume you are consuming two goods, X and Y. Suppose the absolute prices for X and Y remain unchanged, but your money income falls by 50%. What happens to your consumption of good X?

FIGURE 6-7 -Refer to Figure 6-7. Suppose that price is P0. Total consumer surplus is then given by the area

FIGURE 6-9 -Refer to Figure 6-9. In part i), the consumer is able to move from point A to point B because of

A consumer maximizes his or her utility when expenditures are allocated such that

FIGURE 6-5 -Refer to Figure 6-5. For both goods, the price increases 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.

If all consumers in an economy have maximized their utility, and they face a given set of market prices, then each consumer will have identical

Suppose a utility-maximizing person consumes only two goods, hamburgers and milkshakes. Suppose the price of milkshakes rises and all other variables remain constant. As a result, this person will certainly

An indifference curve plotted for two different goods on the axes

The ʺlawʺ of diminishing marginal utility implies that the

FIGURE 6-2 -Refer to Figure 6-2. Suppose that the price of X is $2, the price of Y is $1, the consumerʹs income is $10, and the consumer is buying 3 units of good X and 4 units of good Y. What is the total utility the consumer obtains from this combination of X and Y?

FIGURE 6-7 -Refer to Figure 6-7. Suppose that price is P0. The market value of the quantity purchased is given by the area

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 consumerʹs income is $100. If PY increases to $20, then

FIGURE 6-11 -Refer to Figure 6-11. The line joining points E1 and E3 is known as , which shows how .

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 $12 per unit, and the price of clothing is $16 per unit and that the marginal utility that the family is receiving from its consumption of clothing is currently 200. What is the familyʹs marginal utility from its consumption of food if it is maximizing its utility?

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

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 this consumer purchases 3 toffee bars and 4 bags of cashews per week, his/her total utility will be

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

FIGURE 6-2 -Refer to Figure 6-2. Suppose the price of Y is $1, the consumerʹs income is $10, and the consumer is currently buying 3 units of good X and 4 units of good Y. If this consumer is maximizing her utility, then the price of X must be