Exam 4: Consumer Choice

-Keith is indifferent between canned soup and fresh soup.In the figure above,Keith's indifference curves are represented by I1,I2,I3,and I4 curves.Which of the following choices Keith cannot afford?

-Keith is indifferent between canned soup and fresh soup.In the figure above,Keith's indifference curves are represented by I1,I2,I3,and I4 curves.Canned soup sells for $1 per serving and fresh soup sells for $2 per serving.What is Keith's income?

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.Which of the following bundles are in Max's opportunity set?

If a consumer prefers Apples to Bananas and prefers Bananas to Citrus Fruit,in order to satisfy assumptions about preferences she has to prefer

Behavioral economists use which technique to test economic theory?

If a consumer's budget line for food (F)and shelter (S)is represented as F = 250 - 5S,we know that

If the price of one good increases while the price of the other good and the consumer's income remain unchanged,what will happen to the budget line?

Measuring "y" on the vertical axis and "x" on the horizontal axis,convexity of indifference curves implies that the MRS of "y" for "x"

Rank-order the following three gifts in terms of potentially providing the highest utility to the lowest: ; 2)A gift card to a video game store; 3)Cash.

If the utility function (U)between food (F)and clothing (C)can be represented as U = ,the marginal utility of food

One reason more sport utility vehicles (SUVs)are driven in the United States than in Europe is

Cash may be preferred to food stamps because additional cash

Draw the indifference curves for nickels and dimes.Would they ever have a non-constant slope? Explain.

John is indifferent between canned soup and fresh soup.Canned soup sells for $1 per serving and fresh soup sells for $2 per serving.Assuming that John has allocated $4 toward soup,how will he spend it? Explain your answer by drawing John's budget line and indifference curves.

Consumers do not prefer gifts-in-kind to cash gifts.

Which is a behavioral economics justification for limiting advertising directed towards children?

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = y,then it can be concluded that

In behavioral economics,salience is best exemplified by

People derive utility in their lives from consuming goods (all other goods),g,and clean air (measured as the number of particulates removed per m³),a,as measured with the utility function U(g,a)= g^0.6a^0.4.The price index of consumer goods equals $20 per day.Income equals $1000.What is likely to happen to the number of asthma cases as the price of clean air (abatement cost)increases from $10 to $20?

If the consumer's income increases while the prices of both goods remain unchanged,what will happen to the budget line?