Chat with AIExam 13: Consumer Choice and Demand
-The table gives the total utility Jamal derives from the consumption of eclairs and cream puffs.Jamal has $12 to spend on these two confectionery goods.The price of an eclair is $3 and the price of a cream puff is $1.50.
a.Jamal's budget is $12.In order for Jamal to maximize his utility,how many eclairs and cream puffs should he buy?
b.Suppose the price of an eclair increase to $6.Jamal's income does not change and neither does the price of a cream puff.What combination of eclairs and cream puffs will Jamal buy now?
c.Using your answers to parts (a)and (b),derive two points on Jamal's demand curve for eclairs.
-The table gives the total utility Jamal derives from the consumption of eclairs and cream puffs.Jamal has $12 to spend on these two confectionery goods.The price of an eclair is $3 and the price of a cream puff is $1.50.
a.Jamal's budget is $12.In order for Jamal to maximize his utility,how many eclairs and cream puffs should he buy?
b.Suppose the price of an eclair increase to $6.Jamal's income does not change and neither does the price of a cream puff.What combination of eclairs and cream puffs will Jamal buy now?
c.Using your answers to parts (a)and (b),derive two points on Jamal's demand curve for eclairs.
(35) 
Verifieda.Jamal's utility maximizing combination will allocate (spend)his budget and be such that the marginal utility per dollar from the last eclair equals the marginal utility per dollar from the last cream puff.Jamal's utility maximizing combination is 3 eclairs and 2 cream puffs.At this combination,Jamal spends $9 on eclairs (3 eclairs × $3)and $3 on cream puffs (2 cream puffs × $1.50)for a total of $12.The marginal utility from the third eclair is 99 (= 342 - 243),so the marginal utility per dollar from eclairs is 99 ÷ 3 = 33.The marginal utility from the second cream puff is 49.50 (= 103.5 - 54.0),so the marginal utility per dollar from cream puffs is 49.5 ÷ $1.50 = 33.Hence the marginal utilities per dollar are equal,so the combination of 3 eclairs and 2 cream puffs maximizes Jamal's utility.
b.Jamal's new utility maximizing combination is 1 eclair and 4 cream puffs.As in part (a),this combination allocates all of Jamal's income and equalizes the marginal utility per dollar from the two goods.(Both are equal to 21.)
c.When the price of an eclair is $3,Jamal buys 3 eclairs,so one point on Jamal's demand curve is the price of $3 and the quantity demanded of 3 eclairs.When the price of an eclair increases to $6,Jamal buys only 1 eclair.So another point on Jamal's demand curve is the price of $6 and quantity demanded of 1 eclair.
Any point above a given indifference curve ________ affordable and is ________ to any point on the indifference curve.
(37) VerifiedB
Possibility Egg rolls (per week) Sushi rolls (per week) A 60 0 B 40 10 C 20 20 D 0 30
-The table above has different combinations of egg rolls and sushi rolls that Richard can buy.Richard's budget for egg rolls and sushi rolls is $120 per week.What are the prices of an egg roll and a sushi roll?
(36) VerifiedIf Richard spends all of his budget on egg rolls,he can buy 60 egg rolls.Thus the price of an egg roll is $120 ÷ 60 egg rolls = $2 per egg roll.Similarly,if Richard spends all of his budget on sushi,he can buy 30 rolls.Thus each sushi roll has a price of $120 ÷ 30 sushi rolls = $4 per sushi roll.
Suppose the quantity of burgers is measured on the horizontal axis and the quantity of bags of French fries is measured on the vertical axis.The marginal rate of substitution for burgers is
(35) Katie has $15.She likes M&M candies and Hershey's white chocolate bars.M&M candies are $1.50 a pack and (the large)Hershey bars are $3.00 each.Katie can choose to buy
(32) 
-Which point is most preferred?The marginal rate of substitution for the good on the horizontal axis is
(36) What does the term "indifferent" mean and what is its relationship to an indifference curve?
(42) Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.If Sarah spends $170 per week on sushi,the maximum quantity of rose bushes can she buy each week is ________ bushes.
(33) Kevin likes weasel leg stew.But every bite of the stew that he eats provides him with less and less total utility.This fact means that Kevin's marginal utility is
(43) Over the past 10 years,the relative price of gasoline has ________.As a result,________.
(29) The point where the budget line intersects the y-axis represents a combination of goods that contains
(38) "Because the price of a diamond is much greater than the price of a gallon of water,the consumer surplus from diamonds is greater than the consumer surplus from water." Is the previous analysis correct? Explain your answer.
(35) You can use marginal utility theory to find the demand curve by changing
(34) Goods that are valuable will have a ________ consumer surplus because ________ units of the good are consumed at a ________ price.
(26) Describe the consumer equilibrium in the indifference curve/budget line model.
(29) Suppose Abe is allocating his entire income and he receives 100 units of utility per dollar from the tenth slice of pizza and 200 units of utility per dollar from his second soda.Is Abe maximizing his utility? Should Abe change his consumption of pizza and soda?
(37) Ricardo likes to rent videos and attend concerts.The videos cost $4 and the concerts cost $40.Ricardo's marginal utility from the last video is 20 units.Ricardo is maximizing his utility.What is his marginal utility from the last concert he attended?
(33) To derive a demand curve using the indifference curve model,you must change the
(36) 
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