Exam 21: The Theory of Consumer Choice

Figure 21-22 -Refer to Figure 21-22.When the price of X is $80,the price of Y is $20,and the consumer's income is $160,the consumer's optimal choice is D.Then the price of X decreases to $20.The demand curve can be illustrated as the movement from

Figure 21-2.The graph shows two budget constraints for a consumer. -Refer to Figure 21-2.Suppose the price of a hamburger is $10 and Budget Constraint A applies.What is the consumer's income? What is the price of a light bulb?

If the consumer's income and all prices simultaneously decrease by one-half,then the optimum consumption will

Figure 21-9 -Refer to Figure 21-9.If the consumer has $600 in income,what is the price of good X?

Suppose a consumer consumes two goods,X and Y.The relative price of the two goods equals the

Figure 21-19 The following graph illustrates a representative consumer's preferences for marshmallows and chocolate chip cookies: -Refer to Figure 21-19.Assume that the consumer has an income of $40.If the price of chocolate chips is $4 and the price of marshmallows is $4,the optimizing consumer would choose to purchase

Thomas faces prices of $6 for a unit of good X and $30 for a unit of good Y.At his optimum,Thomas is willing to give up 1 unit of good Y for __________ units of good X.

Figure 21-19 The following graph illustrates a representative consumer's preferences for marshmallows and chocolate chip cookies: -Refer to Figure 21-19.Assume that the consumer has an income of $80.If the price of chocolate chips is $4 and the price of marshmallows is $4,the optimizing consumer would choose to purchase

Figure 21-1.The figure shows three indifference curves and a budget constraint for a certain consumer named Jack. -Refer to Figure 21-1.Jack

Laura consumes only beer and chips.Her indifference curves are all bowed inward.Consider the bundles (2,6), (4,4),and (6,2).If Laura is indifferent between (2,6)and (6,2),then Laura must

Figure 21-12 -Refer to Figure 21-12.The marginal rate of substitution between bundles V and Z is

Figure 21-21 -Refer to Figure 21-21.If the consumer is currently at point A in the figure,a movement to point B as a result of a decrease in the price of potato chips represents the

Figure 21-1.The figure shows three indifference curves and a budget constraint for a certain consumer named Jack. -Refer to Figure 21-1.In moving from point A to point C,Jack gives up

If a consumer consumes two goods,X and Y,and has indifference curves that are bowed inward,the consumer's optional choice occurs when

All points on a demand curve are optimal consumption points.

The income effect in the work-leisure model induces a person to work less in response to higher wages,which tends to make the labor-supply curve slope backward.

Angie is maximizing total utility while consuming food and clothing.Her marginal utility from food is 50,and her marginal utility from clothing is 25.If clothing is priced at $10 per unit,the price of food per unit must be

Which of the following is an example of a Giffen good?

Energy drinks and granola bars are normal goods.When the price of energy drinks decreases,the income effect causes a

Figure 21-10 -Refer to Figure 21-10.A person that chooses to consume bundle C is likely to