Exam 6: Consumer Behaviour

Suppose a consumer can purchase only two goods, beef and chicken. If the price of beef falls (with all other variables held constant), and the consumption of chicken increases, we can conclude that the increased consumption of chicken is due to

Marginal utility theory is about

Indifference theory is based on the assumption that

The table below shows the total value (in dollars) that Andrew gets from playing 9-hole rounds of golf. TABLE 6-3 -Refer to Figure 6-1. If this figure represents the utility obtained from consuming units of a good, how many units would this consumer consume if the good were free?

The table below shows the total value (in dollars) that Andrew gets from playing 9-hole rounds of golf. TABLE 6-3 -Refer to Table 6-3. If the price of a 9-hole round of golf is $19, then Andrew will playrounds per month.

The idea that the utility a consumer derives from successive units of a good diminishes as totalconsumption of the good increases is known as

An individual's consumer surplus from some product can be eliminated entirely by:1. raising the price until very few units are bought.2. charging a price for each unit that is equal to the individual's marginal value for each unit.3. raising the price until zero units are purchased.

If John consumes only two goods, A and B, and he is maximizing his utility subject to his budgetconstraint,

The table below shows the total value (in dollars) that Andrew gets from playing 9-hole rounds of golf. TABLE 6-3 -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

Choose the one alternative that best completes the statement or answers the question. FIGURE 6-8 -Refer to Table 6-1. If the prices of toffee bars and bags of cashews are both $1 and this consumerhas $11 per week to spend on snacks, how many of each will he/she purchase?

Consider a consumer who divides his income between spending on good X and good Y. The opportunity cost of good X in terms of good Y is reflected by the

The income effect refers to the change in quantity demanded that occurs as a result of a change in

The diagram below shows a set of budget lines facing a household. FIGURE 6-7 -Refer to Figure 6-7. The movement of the budget line from ab to ac could be caused by

The condition required for a consumer to be maximizing utility, for any pair of products, X and Y,is

For a product with an income elasticity greater than one, a price increase will cause the consumer's real income to

The marginal rate of substitution measures the tradeoff between the

When a consumer's marginal rate of substitution between X and Y is equal to the ratio of prices forX and Y, and when the consumer is spending all available income, then

Utility

Consider the pizza market, with a downward-sloping demand curve and an upward-sloping supply curve. Suppose 100 pizzas are purchased at the free-market equilibrium price. The consumer surplus on the 100th pizza is

The marginal rate of substitution