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? \[\begin{array} { c } \text { Alpo } \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { McBurgers }\\ \begin{array} { | c | c | c | c | } \hline \begin{array} { c } \text { Cans } \\ \text { Consumed } \\ \text { per Day } \end{array} & \begin{array} { c } \text { Total utility (Units } \\ \text { uf utility) } \end{array} & \begin{array} { c } \text { McBur gers Consumed } \\ \text { per Day } \end{array} & \begin{array} { c } \text { Total utility (Units } \\ \text { d utility) } \end{array} \\ \hline 0 & 0 & 0 & 0 \\ \hline 1 & 7 & 1 & 16 \\ \hline 2 & 13 & 2 & 28 \\ \hline 3 & 16 & 3 & 36 \\ \hline 4 & 17 & 4 & 40 \\ \hline \end{array}\end{array}\]

A) 4 McBurgers B) 3 McBurgers and 2 cans of Alpo C) 2 McBurgers and 4 cans of Alpo D) 1 McBurger and 6 cans of Alpo A) 4 McBurgers B) 3 McBurgers and 2 cans of Alpo C) 2 McBurgers and 4 cans of Alpo D) 1 McBurger and 6 cans of Alpo

You have $5 to spend on any combination of goods A and B.The price of good A is $2 and the price of good B is $1.You have calculated the following utility values for yourself: \[\begin{array} { | c | c | c | c | c | c | c | } \hline \text { Units } & \mathrm { TU } _ { \mathrm { A } } & \mathrm { MU } _ { \mathrm { A } } & \mathrm { MU } _ { \mathrm { A } } / \mathrm { P } _ { \mathrm { A } } & \mathrm { TU } _ { \mathrm { B } } & \mathrm { MU } _ { \mathrm { B } } & \mathrm { MU } _ { \mathrm { B } } / \mathrm { P } _ { \mathrm { B } } \\ \hline 0 & 0 & & & 0 & & \\ \hline 1 & 16 & & & 30 & & \\ \hline 2 & 30 & & & 50 & & \\ \hline 3 & 40 & & & 58 & & \\ \hline 4 & 46 & & & 64 & & \\ \hline \end{array}\] (a)Fill in the empty columns of the table. (b)You have purchased 2 units of good A and 1 unit of good B.Are you maximizing your utility? If so,explain why.If not,what combination of goods should you buy?

(a)The completed table: \[\begin{array}

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

Refer to the graphs shown, which show indifference curve analysis with the associated demand curves. An increase in the price of Y most likely would cause a rational consumer to move from point:

(Multiple Choice)

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Question 121

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

(Multiple Choice)

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Question 122

John is maximizing utility when consuming two goods: French fries and hot dogs. If the marginal utility from the last box of fries John consumed is 60 and the marginal utility of the last hot dog John consumed is 120 and hot dogs cost $1.00 apiece, a box of fries must cost $0.50.

(True/False)

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Question 123

Give two explanations of individual choice other than self-interest.Why do economists focus on self-interest?

(Essay)

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Question 124

A rational consumer maximizes his or her:

(Multiple Choice)

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Question 125

You're maximizing utility when:

(Multiple Choice)

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Question 126

A Big Mac meal costs $3.00 and gives you an additional 5 units of utility; a meal at the Four Seasons Hotel costs $27.00 and gives you an additional 45 units of utility. Based only on the information you have, using the theory of rational choice, you most likely would:

(Multiple Choice)

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Question 127

Describe how the principle of rational choice underlies the law of supply.Use labor supply to demonstrate your answer.

(Essay)

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Question 128

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:

(Multiple Choice)

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Question 129

Refer to the graph shown. Between points C and D, marginal utility is:

(Multiple Choice)

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Question 130

The status quo bias implies that:

(Multiple Choice)

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Question 131

According to Thorstein Veblen, a successful businessman would be most likely to demonstrate his worth to others by:

(Multiple Choice)

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Question 132

Refer to the following graph. The marginal utility curve associated with this total utility curve is:

(Multiple Choice)

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Question 133

According to the principle of rational choice, if there is diminishing marginal utility:

(Multiple Choice)

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Question 134

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:

(Multiple Choice)

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Question 135

Who would be categorized as a conspicuous consumer?

(Essay)

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Question 136

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? Alpo McBurgers Cans Consumed per Day Total utility (Units uf utility) McBur gers Consumed per Day Total utility (Units d utility) 0 0 0 0 1 7 1 16 2 13 2 28 3 16 3 36 4 17 4 40

(Multiple Choice)

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Question 137

You have $5 to spend on any combination of goods A and B.The price of good A is $2 and the price of good B is $1.You have calculated the following utility values for yourself: Units / / 0 0 0 1 16 30 2 30 50 3 40 58 4 46 64 (a)Fill in the empty columns of the table. (b)You have purchased 2 units of good A and 1 unit of good B.Are you maximizing your utility? If so,explain why.If not,what combination of goods should you buy?

(Essay)

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Question 138

Refer to the graph shown. Assuming a consumer has $5 to spend, if a soda costs $0.50 and a chocolate bar costs $0.50, the consumer will optimally choose to consume:

(Multiple Choice)

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Question 139

The theory of rational choice assumes that:

(Multiple Choice)

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Question 140

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

Refer to the graphs shown, which show indifference curve analysis with the associated demand curves. An increase in the price of Y most likely would cause a rational consumer to move from point:

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

John is maximizing utility when consuming two goods: French fries and hot dogs. If the marginal utility from the last box of fries John consumed is 60 and the marginal utility of the last hot dog John consumed is 120 and hot dogs cost $1.00 apiece, a box of fries must cost $0.50.

Give two explanations of individual choice other than self-interest.Why do economists focus on self-interest?

A rational consumer maximizes his or her:

You're maximizing utility when:

A Big Mac meal costs $3.00 and gives you an additional 5 units of utility; a meal at the Four Seasons Hotel costs $27.00 and gives you an additional 45 units of utility. Based only on the information you have, using the theory of rational choice, you most likely would:

Describe how the principle of rational choice underlies the law of supply.Use labor supply to demonstrate your answer.

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:

Refer to the graph shown. Between points C and D, marginal utility is:

The status quo bias implies that:

According to Thorstein Veblen, a successful businessman would be most likely to demonstrate his worth to others by:

Refer to the following graph. The marginal utility curve associated with this total utility curve is:

According to the principle of rational choice, if there is diminishing marginal utility:

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:

Who would be categorized as a conspicuous consumer?

Refer to the graph shown. Assuming a consumer has $5 to spend, if a soda costs $0.50 and a chocolate bar costs $0.50, the consumer will optimally choose to consume:

The theory of rational choice assumes that:

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