Exam 8: Utility and Demand

Billy likes candy and popcorn. Candy sells for $0.50 a bag and popcorn sells for $1 per bag. Currently he is in consumer equilibrium. Then the price of candy rises to $1 a bag. Which statement is true in the new consumer equilibrium?

The budget line shows the boundary between those combinations of goods and services that

Use the table below to answer the following questions. Table 8.2.1 -Refer to Table 8.2.1. Consider Sam's utility from sailing and skiing. The price of sailing is $10 per hour and the price of skiing is $20 per hour; Sam's income to spend on these activities is $80. In consumer equilibrium, Sam will sail for

Childcare workers often get paid fairly low wages, yet it is said that they have "the most important job in the world." This paradox can be resolved by

Total utility equals

If the price of a good rises, then in the new consumer equilibrium all of the following are true except

The budget line

The three limitations on human rationality that behavioural economics emphasizes are

What is marginal utility?

Use the information below to answer the following questions. Fact 8.4.1 Eating Away the Innings in Baseball's Cheap Seats Baseball and gluttony, two of America's favourite pastimes, are merging with Major League Baseball stadiums offering all-you-can-eat seats. Some fans try to "set personal records" during their first game, but by the third time in such seats they eat normally. Source: USA Today, March 6, 2008 -Refer to Fact 8.4.1. Setting personal records for eating can be reconciled with marginal utility theory

In consumer equilibrium, a consumer equates the

Which one of the following is not true in consumer equilibrium?

Use the table below to answer the following question. Table 8.2.4 -Refer to Table 8.2.4. Suppose the price of X is $1 and the price of Y is $1. How much of each should you purchase to maximize utility from a total expenditure of $11?

Use the information below to answer the following questions. Fact 8.4.1 Eating Away the Innings in Baseball's Cheap Seats Baseball and gluttony, two of America's favourite pastimes, are merging with Major League Baseball stadiums offering all-you-can-eat seats. Some fans try to "set personal records" during their first game, but by the third time in such seats they eat normally. Source: USA Today, March 6, 2008 -Refer to Fact 8.4.1. The idea of ________ is consistent with the information in the news clip.

For a consumer to maximize utility from a given income,

A consumer maximizes his utility by purchasing 2 units of good X at $5 per unit and 3 units of good Y at $7 per unit. What is the ratio of the marginal utility from X to the marginal utility from Y?

To determine consumer equilibrium we need to know only

John and Sally have identical preferences except Sally's utility units are exactly 10 times that of John's. Both have the same income and face the same prices. Choose the best response.

Bikes and roller blades are substitutes. Marginal utility theory predicts that when the price of a bike rises, the quantity of bikes demanded

Use the table below to answer the following questions. Table 8.2.2 -Refer to Table 8.2.2. What is the total utility if 3 bags of popcorn and 2 bottles of pop are consumed?