Question 1

Use the following to answer questions 38-40:
Figure 4.14  
-(Figure 4.14) For budget constraint 1, the price of good X and the price of good Y could equal _____, respectively.

Accepted Answer

A)  $175 and $100 
B)  $80 and $140 
C)  $140 and $160 
D)  $6 and $4 
A)  $175 and $100 
B)  $80 and $140 
C)  $140 and $160 
D)  $6 and $4

Question 2

Suppose that MUY = 15, MUX = 10, PY = $2, and PX = $1. Which of the following statements is TRUE?

Accepted Answer

A)  The consumer is maximizing utility. 
B)  The consumer could increase utility by giving up 1 unit of good Y for 2 units of good X. 
C)  The consumer could increase utility by giving up 2 units of good X for 1 unit of good Y. 
D)  The consumer is receiving more marginal utility per dollar from good Y than from good X. 
A)  The consumer is maximizing utility. 
B)  The consumer could increase utility by giving up 1 unit of good Y for 2 units of good X. 
C)  The consumer could increase utility by giving up 2 units of good X for 1 unit of good Y. 
D)  The consumer is receiving more marginal utility per dollar from good Y than from good X.

Question 3

Use the following to answer question:
Figure 4.18  
-(Figure 4.18) Use the preceding graph to answer the following questions.

Accepted Answer

MRS = -Slope of the budget lin

Question 4

Beth has $200 of income to spend on e-books (E), priced at $10 per book, and Zumba (Z) classes, priced at $8 per class. Which of the following consumption bundles is infeasible?

Accepted Answer

A)  E = 20 and Z = 0 
B)  E = 2 and Z = 22 
C)  E = 10 and Z = 13 
D)  E = 8 and Z = 15 
A)  E = 20 and Z = 0 
B)  E = 2 and Z = 22 
C)  E = 10 and Z = 13 
D)  E = 8 and Z = 15

Question 5

Mickey loves cheese and crackers, consuming 2 ounces of cheese per cracker. Draw Mickey's indifference curve, using a well-labeled diagram.

Accepted Answer

The answer of Mickey loves cheese and crackers, consuming 2...

Question 6

For the utility function U(X,Y) = X0.5Y0.5, the marginal rate of substitution MRSXY is:

Accepted Answer

A)  0.5Y/X. 
B)  0.5X/Y. 
C)  X/Y. 
D)  Y/X. 
A)  0.5Y/X. 
B)  0.5X/Y. 
C)  X/Y. 
D)  Y/X.

Question 7

Mark's utility function over dance show tickets (D) and baseball game tickets (B) can be expressed as U(D,B) = D + 5B.
a. What is his marginal utility of dance tickets?
b. What is his marginal utility of baseball tickets?
c. What is his marginal rate of substitution MRSDB?

Accepted Answer

a. Marginal utility of dance tickets can

Question 8

Suppose that U = U(P, M), where P and M are peanuts and marshmallows. The marginal utility of marshmallows, MUM, is given by:

Accepted Answer

A)  P + M. 
B)  P/M. 
C)  $\Delta$U(P, M)/$\Delta$M. 
D)  $\Delta$U(P, M) × $\Delta$M. 
A)  P + M. 
B)  P/M. 
C)  $\Delta$U(P, M)/$\Delta$M. 
D)  $\Delta$U(P, M) × $\Delta$M.

Question 9

Use the following to answer question:
Figure 4.17  
-(Figure 4.17) What, if any, property of utility functions is violated if:

Accepted Answer

a. diminishing MRS
b

Question 10

Suppose that the marginal utility of good Y = 2X2 and the marginal utility of good X = 4XY. What is the slope of the indifference curve when Y = 7 and X = 2? Assume that good X is on the horizontal axis and good Y is on the vertical axis.

Accepted Answer

A)  7 
B)  0.143 
C)  -14 
D)  -0.143 
A)  7 
B)  0.143 
C)  -14 
D)  -0.143

Question 11

Suppose that Arthur cares only about video games and coffee. His utility function is U = VC, where V is the number of video games that he plays and C is the number of cups of coffee that he drinks. The price of video games is $50, and the price of coffee is $3. Arthur has a budget of $800. What is the Lagrangian equation that can be used to solve Arthur's utility maximization problem?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 12

Helen considers Titleist (T) and Callaway (C) golf balls perfect substitutes. Her utility function is U = 10T + 8C. A sleeve of Titleist is priced at $12, compared to $10 for Callaway balls. What is Helen's utility-maximizing bundle of golf balls? Assume that Helen can spend $120.

Accepted Answer

Because the marginal utility per dollar

Question 13

Use the following to answer question:
Figure 4.13  
-(Figure 4.13) What rotated the budget constraint?

Accepted Answer

A)  an increase in the price of good X 
B)  a decrease in the price of good Y 
C)  a decrease in income 
D)  an increase in the price of good Y 
A)  an increase in the price of good X 
B)  a decrease in the price of good Y 
C)  a decrease in income 
D)  an increase in the price of good Y

Question 14

Use the following to answer question:
Figure 4.3  
-(Figure 4.3) Which of the following statements is FALSE?

Accepted Answer

A)  Indifference curve U2 provides a higher level of utility than indifference curve U1. 
B)  Bundle C is preferred to bundle D. 
C)  Bundle A is preferred to bundle C. 
D)  The consumer is indifferent between bundle A and bundle D. 
A)  Indifference curve U2 provides a higher level of utility than indifference curve U1. 
B)  Bundle C is preferred to bundle D. 
C)  Bundle A is preferred to bundle C. 
D)  The consumer is indifferent between bundle A and bundle D.

Question 15

The utility function for a consumer is U = min{0.25X, Y}. What would be the marginal rate of substitution for this consumer in equilibrium?

Accepted Answer

The consumer's utility function represen

Question 16

Cashews are sold in either 8-ounce (C8) or 16-ounce (C16) cans.

Accepted Answer

a. U = 2C₁₆

Question 17

Melissa has the utility function U = SC for bundles of yogurt smoothies (S) and iced coffee (C), with MUS = C and MUC = S. (Assume smoothies will be on the vertical axis.) She has $120, with the price of smoothies $8 and the price of iced coffee $4. Melissa will buy _____smoothies and _____iced coffees in equilibrium.

Accepted Answer

Question 18

Suppose that U = min{2X, 0.5Y}, where X is units of good X and Y is units of good Y. The price of good X is $1 and the price of good Y is $2. What is the minimum expenditure necessary to achieve a utility level of 100?

Accepted Answer

A)  $333.33 
B)  $550 
C)  $1,200 
D)  $450 
A)  $333.33 
B)  $550 
C)  $1,200 
D)  $450

Question 19

Graph Sherman's indifference curve for beer and wine, assuming he has a strong preference for wine. Graph Rodger's indifference curve for beer and wine, assuming he has a very strong preference for beer.

Accepted Answer

The answer of Graph Sherman's indifference curve for beer and...

Question 20

Carleton is presented with two bundles of goods: silk ties and cufflinks. Which of the following statements satisfies the assumption of rankability?

Accepted Answer

A)  I 
B)  II 
C)  I or II 
D)  I, II, and III 
A)  I 
B)  II 
C)  I or II 
D)  I, II, and III

Use the following to answer questions 38-40: Figure 4.14 -(Figure 4.14) For budget constraint 1, the price of good X and the price of good Y could equal _____, respectively.

Suppose that MU_Y = 15, MU_X = 10, P_Y = $2, and P_X = $1. Which of the following statements is TRUE?

Use the following to answer question: Figure 4.18 -(Figure 4.18) Use the preceding graph to answer the following questions.

Beth has $200 of income to spend on e-books (E), priced at $10 per book, and Zumba (Z) classes, priced at $8 per class. Which of the following consumption bundles is infeasible?

Mickey loves cheese and crackers, consuming 2 ounces of cheese per cracker. Draw Mickey's indifference curve, using a well-labeled diagram.

For the utility function U(X,Y) = X^0.5Y^0.5, the marginal rate of substitution MRS_XY is:

Mark's utility function over dance show tickets (D) and baseball game tickets (B) can be expressed as U(D,B) = D + 5B. a. What is his marginal utility of dance tickets? b. What is his marginal utility of baseball tickets? c. What is his marginal rate of substitution MRS_DB?

Suppose that U = U(P, M), where P and M are peanuts and marshmallows. The marginal utility of marshmallows, MU_M, is given by:

Use the following to answer question: Figure 4.17 -(Figure 4.17) What, if any, property of utility functions is violated if:

Suppose that the marginal utility of good Y = 2X² and the marginal utility of good X = 4XY. What is the slope of the indifference curve when Y = 7 and X = 2? Assume that good X is on the horizontal axis and good Y is on the vertical axis.

Helen considers Titleist (T) and Callaway (C) golf balls perfect substitutes. Her utility function is U = 10T + 8C. A sleeve of Titleist is priced at $12, compared to $10 for Callaway balls. What is Helen's utility-maximizing bundle of golf balls? Assume that Helen can spend $120.

Use the following to answer question: Figure 4.13 -(Figure 4.13) What rotated the budget constraint?

Use the following to answer question: Figure 4.3 -(Figure 4.3) Which of the following statements is FALSE?

The utility function for a consumer is U = min{0.25X, Y}. What would be the marginal rate of substitution for this consumer in equilibrium?

Cashews are sold in either 8-ounce (C₈) or 16-ounce (C₁₆) cans.

Suppose that U = min{2X, 0.5Y}, where X is units of good X and Y is units of good Y. The price of good X is $1 and the price of good Y is $2. What is the minimum expenditure necessary to achieve a utility level of 100?

Graph Sherman's indifference curve for beer and wine, assuming he has a strong preference for wine. Graph Rodger's indifference curve for beer and wine, assuming he has a very strong preference for beer.

Carleton is presented with two bundles of goods: silk ties and cufflinks. Which of the following statements satisfies the assumption of rankability?

Supply and Demand

Using Supply and Demand to Analyze Markets

Individual and Market Demand

Producer Behavior

Costs

Supply in a Competitive Market

Market Power and Monopoly

Market Power and Pricing Strategies

Imperfect Competition

Game Theory

Factor Markets

Investment, Time, and Insurance

General Equilibrium

Asymmetric Information

Externalities and Public Goods

Behavioral and Experimental Economics

Filters

Exam 4: Consumer Behavior

Use the following to answer questions 38-40: Figure 4.14 -(Figure 4.14) For budget constraint 1, the price of good X and the price of good Y could equal _____, respectively.

Suppose that MUY = 15, MUX = 10, PY = $2, and PX = $1. Which of the following statements is TRUE?

Use the following to answer question: Figure 4.18 -(Figure 4.18) Use the preceding graph to answer the following questions.

Beth has $200 of income to spend on e-books (E), priced at $10 per book, and Zumba (Z) classes, priced at $8 per class. Which of the following consumption bundles is infeasible?

Mickey loves cheese and crackers, consuming 2 ounces of cheese per cracker. Draw Mickey's indifference curve, using a well-labeled diagram.

For the utility function U(X,Y) = X0.5Y0.5, the marginal rate of substitution MRSXY is:

Mark's utility function over dance show tickets (D) and baseball game tickets (B) can be expressed as U(D,B) = D + 5B. a. What is his marginal utility of dance tickets? b. What is his marginal utility of baseball tickets? c. What is his marginal rate of substitution MRSDB?

Suppose that U = U(P, M), where P and M are peanuts and marshmallows. The marginal utility of marshmallows, MUM, is given by:

Use the following to answer question: Figure 4.17 -(Figure 4.17) What, if any, property of utility functions is violated if:

Suppose that the marginal utility of good Y = 2X2 and the marginal utility of good X = 4XY. What is the slope of the indifference curve when Y = 7 and X = 2? Assume that good X is on the horizontal axis and good Y is on the vertical axis.

Helen considers Titleist (T) and Callaway (C) golf balls perfect substitutes. Her utility function is U = 10T + 8C. A sleeve of Titleist is priced at $12, compared to $10 for Callaway balls. What is Helen's utility-maximizing bundle of golf balls? Assume that Helen can spend $120.

Use the following to answer question: Figure 4.13 -(Figure 4.13) What rotated the budget constraint?

Use the following to answer question: Figure 4.3 -(Figure 4.3) Which of the following statements is FALSE?

The utility function for a consumer is U = min{0.25X, Y}. What would be the marginal rate of substitution for this consumer in equilibrium?

Cashews are sold in either 8-ounce (C8) or 16-ounce (C16) cans.

Suppose that U = min{2X, 0.5Y}, where X is units of good X and Y is units of good Y. The price of good X is $1 and the price of good Y is $2. What is the minimum expenditure necessary to achieve a utility level of 100?

Graph Sherman's indifference curve for beer and wine, assuming he has a strong preference for wine. Graph Rodger's indifference curve for beer and wine, assuming he has a very strong preference for beer.

Carleton is presented with two bundles of goods: silk ties and cufflinks. Which of the following statements satisfies the assumption of rankability?

Supply and Demand

Using Supply and Demand to Analyze Markets

Individual and Market Demand

Producer Behavior

Costs

Supply in a Competitive Market

Market Power and Monopoly

Market Power and Pricing Strategies

Imperfect Competition

Game Theory

Factor Markets

Investment, Time, and Insurance

General Equilibrium

Asymmetric Information

Externalities and Public Goods

Behavioral and Experimental Economics

Filters

Suppose that MU_Y = 15, MU_X = 10, P_Y = $2, and P_X = $1. Which of the following statements is TRUE?

For the utility function U(X,Y) = X^0.5Y^0.5, the marginal rate of substitution MRS_XY is:

Mark's utility function over dance show tickets (D) and baseball game tickets (B) can be expressed as U(D,B) = D + 5B. a. What is his marginal utility of dance tickets? b. What is his marginal utility of baseball tickets? c. What is his marginal rate of substitution MRS_DB?

Suppose that U = U(P, M), where P and M are peanuts and marshmallows. The marginal utility of marshmallows, MU_M, is given by:

Suppose that the marginal utility of good Y = 2X² and the marginal utility of good X = 4XY. What is the slope of the indifference curve when Y = 7 and X = 2? Assume that good X is on the horizontal axis and good Y is on the vertical axis.

Cashews are sold in either 8-ounce (C₈) or 16-ounce (C₁₆) cans.