Exam 16: Consumer Choice

Refer to the following table to answer the following questions: -For 2 chips and 5 sodas to be a combination of goods that maximizes someone's utility per dollar,the price of chips must be ________ if the price of soda is $1.00.

A(n)________ is a line of equal utility.

To maximize one's satisfaction when deciding between two goods

Refer to the following figure: a.This consumer experiences diminishing marginal utility starting with which slice of cheesecake? b.What is this consumer's total utility after the second slice of cheesecake?

Refer to the following figure: a.What is the marginal utility of the third and eighth tacos? b.Does this consumer experience diminishing marginal utility? If so,after which taco does he or she experience it? c.Does this consumer experience negative marginal utility? If so,after which taco does he or she experience it?

Budget constraint is the

Refer to the following figure to answer the following questions: -Marginal utility is negative

Refer to the following graph to answer the following questions: -Which of the following statements is true?

The power of indifference curve analysis is its ability to display how ________ changes affect ________ choices.

If the price of a good decreases,the marginal utility per dollar spent ________ and consumers buy ________ of the good.

The rate at which a consumer is willing to purchase one good instead of another is called

Refer to the following table to answer the following questions: -Assume that chips cost $1 and soda costs $2.If the consumer has $14,the combination of goods that would maximize his utility per dollar leads to a utility equal to ________ utils.

As marginal utility decreases,total utility

The diamond-water paradox explains why

Refer to the following figure to answer the following questions: -This consumer experiences diminishing marginal utility

Fireworks vendors are well known for the "Buy 1,Get n Free" sales tactic.Based on the concept of diminishing marginal utility,why is this an effective strategy?

Utility is a balance between ________ and ________ factors.

Timothy is trying to figure out what combination of bags of peanuts and bags of popcorn he should buy with his $15 budget.The price of peanuts is currently $5 per bag and the price of popcorn is currently $2 per bag.If Timothy's marginal utility from consuming his third bag of peanuts is 15 utils and his marginal utility from consuming his second bag of popcorn is 6 utils,Timothy should

The real-income effect

Refer to the following table to answer the following questions: -Marginal utility is negative