Exam 19: The Logic of Individual Choice: the Foundation of Supply and Demand

If the marginal utilities are constant for travel and food and the marginal utility per dollar of travel is 50 and the marginal utility per dollar of food is 30:

If you sign up for a class and then drop it mid-semester, you must not have been making a rational choice when you were enrolling in classes.

The theory of bounded rationality, based on rules of thumb such as "the value of a product is indicated by its price," may result in:

You're maximizing utility when:

Suppose that when you consume the third piece of chicken, total utility rises from 420 to 520. Marginal utility for the third piece of chicken is:

According to the principle of rational choice, a consumer should spend money on those goods which provide the most marginal utility per dollar.

If people generally believe that "you get what you pay for," it is reasonable for them to:

The opportunity cost of consuming good A is lower than the opportunity cost of consuming good B. This means that good:

If MU_A/P_A> MU_B /P_B, an individual should choose to consume more of good A.

Refer to the graph shown. Which price combination is consistent with the budget line shown?

The slower the marginal utility declines as more of a good is consumed the:

Refer to the following table. If Jane's hourly wage rose from $2 per hour to $4 an hour and Jane had 6 hours to work or play, Jane would: $\begin{array}{l}\begin{array}{|c|c|c|c|}\hline\text { Spending}&\text { Total Utility of spending(\$)}&\text { Hours of leisure }&\text { Total utility of leisure }\\\hline \$ 2 & 60 & 1 & 30 \\\hline \$ 4 & 110 & 2 & 54 \\\hline \$ 6 & 148 & 3 & 70 \\\hline \$ 8 & 172 & 4 & 78 \\\hline \$ 10 & 180 & 5 & 78 \\\hline \$ 12 & 186 & 6 & 70 \\\hline\end{array}\end{array}$

A rational consumer maximizes his or her:

Refer to the graphs shown, which show indifference curve analysis with the associated demand curves. If a consumer is able to move from point B to point C, she is also able to move from point:

Suppose that a haircut will give Dawn 2,000 units of utility and cost her $40, whereas a manicure costs $25 and yields 1,000 units of utility. Most likely Dawn should:

The absolute value of the slope of the indifference curve given the law of diminishing marginal rate of substitution:

The principle of diminishing marginal utility says that as you consume more of an item, beyond some point the:

Joe is maximizing utility by consuming three colas at $2 apiece and four hot dogs. The last cola gave him 200 units of utility, and the last hot dog gave him 300 units of utility. The price of each hot dog is:

If the price of one can of Alpo is $0.50 and the price of each McBurger is $1, which of the following would Ms. Tightwad, a utility-maximizing consumer, buy with her $4?

Behavioral economics: