Exam 34: Consumer Preferences and Consumer Choice

According to the relative price rule, the optimal consumption bundle between hot dogs and beer takes place when the _____ rate of substitution is _____ their relative price.

If a consumer moves upward along an indifference curve, his or her total utility:

A(n) _____ is a curve that shows all of the consumption bundles that yield the same level of total utility for an individual.

Manny consumes only bananas and DVDs, and he is on his highest possible indifference curve. Two bundles on this indifference curve are bundle A (5 bananas and 2 DVDs), and bundle B (3 bananas and 3 DVDs). Between points A and B, what is Manny's marginal rate of substitution of bananas for DVDs?

In terms of indifference curves, an increase in total utility is represented by a _____ indifference curve.

The slope of a(n) _____ curve shows the rate at which two goods can be exchanged _____.

Consumption bundles that yield equal levels of total utility are shown on the same:

Combinations of two goods that yield equal levels of utility are shown on a(n) _____ curve.

Higher indifference curves represent _____ lower curves.

Joseph chooses a combination of apples and oranges along his budget line. The marginal rate of substitution of apples for oranges is 2, the price of an apple is $0.50, and the price of an orange is $0.10. Joseph:

Gillian is consuming her optimal consumption bundle of peanuts and raisins. The marginal utility associated with the last peanut she consumes is 4 utils, and the marginal utility associated with the last raisin is 2 utils. What must be the price of peanuts relative to that of raisins?

Joseph chooses a combination of apples and oranges along his budget line. The marginal rate of substitution of apples for oranges is 2, the price of an apple is $0.50, and the price of an orange is $1.50. Joseph:

If a consumer moves downward along an indifference curve, his or her total utility:

Use the following to answer questions Figure: Indifference Curve Map I -(Figure: Indifference Curve Map I) Look at the figure Indifference Curve Map I. It shows that:

An indifference curve typically:

Margo has a monthly income of $60 to spend on coffee or bagels. Each cup of coffee costs $3 and each bagel costs $4. Margo spends all of her income, and at her consumption bundle, she is willing to forgo 1 bagel to get the next cup of coffee to achieve the same level of utility. To maximize her utility, Margo should:

Use the following to answer questions Figure: The Indifference Curve Map II -(Figure: The Indifference Curve Map II) Look at the figure The Indifference Curve Map II. Sara enjoys attending Chicago Cubs baseball games and eating baby back rib dinners. The figure shows two of her indifference curves for Cubs tickets and baby back rib dinners. Which of the following combinations gives Sara the highest level of utility?

At the optimal consumption bundle, which of the following conditions does NOT hold?

One point on a standard indifference curve is 8 cookies and 2 brownies; another is 6 cookies and 4 brownies. Which of the following combinations of cookies and brownies could lie on this indifference curve?

While at the grocery store, Sidney sees that the price of Grape-Nuts is twice that of Cheerios. If Sidney buys both goods, then Sidney must: