Exam 3: A Consumers Constrained Choice

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.What happens if Max receives a $100 cash grant to buy either meat or chicken?

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

Joe's income is $500,the price of food (F)is $2 per unit,and the price of shelter (S)is $100.Which of the following represents his budget constraint?

Jane's utility function is represented as: U = F^0.5 C^0.5,F is quantity of food and C is quantity of clothing.If her budget constraint is represented as: 120 = 2F + C,her optimal bundle of consumption should be

The principle that "More is better" results in indifference curves

Joe subscribes to an Internet provider that charges $2 per hour.Draw his budget line for Internet access on the horizontal axis and money spent on all other goods on the vertical axis assuming he has $100 per month to spend.Another company offers unlimited Internet access for a flat monthly fee of $20.Draw this budget line.

A consumer's budget line for food (F)and shelter (S)is represented as F = 250 - 5S.If the price of shelter increases by 2 and consumption of shelter remains constant at 20,how will consumption of food change?

A consumer's budget line for food (F)and shelter (S)is represented as F = 250 - 5S.If this consumer's income increases by $10 and consumption of shelter remains unchanged,how many more units of shelter can be purchased at most?

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

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.What happens if Max's mother gives him 30 pounds of burger?

An optimum that occurs as a corner solution

Suppose Joe's utility for lobster (L)and soda (S)can be represented as U = L^0.5 S^0.5.Joe walks into a restaurant with $72.Lobsters cost $18 each and sodas cost $2 each.How much lobster and soda will Joe consume if he intends to spend all his money? (There are no tax and no tips. )

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

Jezz has the quasi log-linear utility function U(q₁,q₂)= q₁ + 2ln(q₂) Jezz has an income of $100 and faces prices p₁ = p₂ = 20. a.What is the marginal rate of substitution for this utility function? b.Solve for Jezz's optimal bundle. c.Suppose Jezz's income falls to $20.What will happen to his optimal bundle? Is the MRS = MRT at the optimal bundle?

If a consumer's budget line for food (F)and shelter (S)is represented as F = 250 - 5S,and 50 units of food is purchased,how many units of shelter can be purchased at most?

The slope of the budget line represents the rate at which the consumer is willing to trade one good for another at any given bundle.

With respect to consuming food and shelter,two consumers face the same prices and both claim to be in equilibrium.We therefore know that

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.If the price of burger increases,

Joe's income is $500,the price of food (F)is $2 per unit,and the price of shelter (S)is $100.Which of the following represents his budget constraint?

Clifford lives by the motto "Eat drink and be merry today,for tomorrow doesn't matter." If today's consumption is represented by "x" and tomorrow's consumption is represented by "y",then which of the following best represents Clifford's utility function?