Exam 8: Utility and Demand

Let MUA and MUB stand for the marginal utility of goods A and B, respectively.Let PA and PB stand for the price of goods A and B, respectively.Which statement must hold for consumer equilibrium?

If Soula is maximizing her utility and consuming two goods that have the same marginal utility, she

Lucy buys only magazines and CDs.Both are normal goods.Lucy's income decreases, but the prices of magazines and CDs do not change.Marginal utility theory predicts that

Marginal utility theory assumes that when Kelly decreases the number of hockey games that she attends each week from 3 to 2, her

Use the table below to answer the following questions. Windsurfing equipment rents for $10 per hour and snorkeling equipment rents for $5 per hour. Table 8.2.1 -Consider Devon's utility from snorkeling and windsurfing in Table 8.2.1.Devon has $55 to spend.What are Devon's choices for time spent on the two activities?

In consumer equilibrium,

If Katie purchases two slices of pizza and six breadsticks to maximize her total utility, then

The paradox of value asks why

Lucky buys hats for $20, but Lucky will not sell one of her hats for less than $35.Lucky is

If a consumer's income increases and if all goods are normal goods,

With a given income and prices of goods, Marcus is in consumer equilibrium when

Use the table below to answer the following questions. Table 8.2.2 -Refer to Table 8.2.2.Henry is maximizing his utility by consuming 3 bags of popcorn and 3 bottles of pop.What is the ratio of the price of popcorn to the price of pop?

With respect to water and diamonds, water

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?

Harold can consume either pens or milkshakes.The price of a pen is $1, and the price of a milkshake is $1.Harold figures that when his income is spent, his marginal utility from pens will be 10 and his marginal utility from milkshakes will be 8.Harold is better off

Harold can consume apples and oranges.He likes them equally well and currently is in consumer equilibrium.Then the price of oranges rises, while his income remains the same.What will happen to his consumption?

For a consumer to maximize utility from a given income,

According to the marginal utility theory, consumers

Total utility is always

If the price of a good increases, everything else remaining the same, then the consumer's total utility