Exam 34: Consumer Preferences and Consumer Choice

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. If a new health report is released stating that there is a connection between baby back rib dinners and heart attacks and this concerns Sara, each combination of Cubs tickets and baby back ribs will now yield _____ for Sara.

One point on an indifference curve that displays a diminishing marginal rate of substitution between apples and oranges is 10 apples and 2 oranges; another is 8 apples and 4 oranges. Which of the following combinations of apples and oranges could also lie on this indifference curve?

Use the following to answer question Figure and Table: An Indifference Curve Map -(Figure and Table: Indifference Curve Map) Look at the figure and table An Indifference Curve Map. Combination _____ is preferred to combination _____.

Higher total utility is represented by _____ indifference curve.

Use the following to answer questions Figure: Consumer Equilibrium I The figure shows three of Owen's indifference curves for pizza and soda per week. Owen has $180 per month to spend on the two goods. The price of a pizza is $20, and the price of a soda is $1.50. -(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. If in equilibrium Owen receives marginal utility of 10 utils from the last pizza he consumes, his marginal utility from the last soda must be _____ utils.

An indifference curve is a line showing all of the consumption bundles that:

Luis is consuming his optimal consumption bundle of pizza and tacos. The marginal utility associated with the last pizza he consumes is 1 util, and the marginal utility associated with the last taco is 3 utils. What must be the relative price of pizza in terms of tacos?

If combination A lies on a higher indifference curve than combination B and combination B lies on a higher indifference curve than combination C, it must be that the total utility associated with combination A is _____ the total utility associated with combination C.

For most goods, indifference curves:

After learning about indifference curves, Sandy realizes that her marginal rate of substitution of grapes for cheese is 2. Since the price of cheese is $3 and the price of grapes is $1, Sandy:

Use the following to answer questions Figure: Consumer Equilibrium I The figure shows three of Owen's indifference curves for pizza and soda per week. Owen has $180 per month to spend on the two goods. The price of a pizza is $20, and the price of a soda is $1.50. -(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. If Owen consumes 1.5 pizzas and 100 sodas, which of the following describes the relationship between his marginal rate of substitution of pizza for soda and the price of pizza in terms of soda?

Greater levels of utility are represented by:

Assume that two combinations of two goods yield the same level of satisfaction. We can conclude that these combinations are always on:

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 $0.25. Joseph:

LaToya sees honey and sugar as perfect substitutes. She is always willing to substitute 1 teaspoon of honey for 2 teaspoons of sugar. If the price of honey is half that of sugar, LaToya will use:

A curve that represents combinations of two goods that yield equal levels of satisfaction is a(n):

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 $0.50. Joseph:

The relative price rule says that at the optimal consumption bundle the marginal rate of substitution between two goods must be equal to their relative price. This is equivalent to saying that:

An indifference curve shows combinations of two goods that yield:

If two combinations of two goods yield the same level of satisfaction, then they are on: