Exam 4: Principles and Preferences

If the more-is-better principle holds,two consumption bundles can't be equally attractive unless

The decisions consumers make about which goods to consume are interrelated because

Suppose that Frank is considering giving Mike eight paper back books in exchange for 2 CDs.Explain the conditions under which this trade would be mutually beneficial.Also explain the conditions under which Frank and Mike won't make the trade.

Refer to carefully-labeled diagrams to explain each of the following: a)Indifference curves are thin. A. Thus, crossing indifference curves lead to a contradiction. B. The consumer is also indifferent between bundles B and C. But bundle C contains more of both goods and is therefore preferred to bundle C. This implies that the consumer should be indifferent between bundles A and

If consuming more of a good doesn't affect a consumer's well-being,then

-According to Figure 4.1,which of the following statements is true?

Stewie enjoys watching DVDs and listening to his iPod.Suppose his utility function is given by U(D,I)= 3D + 4(D x I),where D is the number of hours he spends watching DVDs and I is the number of hours he spends listening to his iPod.Which of the following combination will provide Stewie with the greatest amount of satisfaction?

The idea that all potentially available alternatives can be ordered according to a consumer's preferences is called

From the modern "ordinalist" perspective,when we change the scale used to measure utility,

Assume that,when comparing two alternatives X and Y,the consumer either prefers X to Y,prefers Y to X or is indifferent between them.This property is called

Compare and contrast cardinal utility and ordinal utility.Which concept is sufficient for ranking consumers' preferences? Why?

-Refer to Table 4.1.If Mike starts with 4 CDs and 1 economics book,would he be willing to trade one CD for two economics books?

Information about preferences is ordinal if

Suppose Addison is a big fan of jazz music and dislikes opera music.What would his family of indifference curves look like?

Which of the following is NOT a reason why economists are interested in understanding consumer behavior?

-Refer to Figure 4.4.Which diagram most likely represents the indifference map for Sony PlayStation and Nintendo GameCube?

Suppose a consumer's MRS is given by the formula MRS_PT = T/P,where P stands for the number of pieces of pizza and T stands for the number of tacos.Starting at 12 tacos and 4 pizzas,the consumer must receive

-Refer to Figure 4.4.Which diagram most likely represents the indifference map for a good and a "bad"?

By itself,the marginal utility of a particular good

Frieda enjoys cooking and baking.Her utility function is U(C,B)= 6C + 3B,where C is the number of hours she spends cooking and B is the hours she spends baking.What is Frieda's MU of cooking?