Exam 22: Consumer Preferences

Use the following to answer questions : -(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.A level of total utility NOT attainable is at point:

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

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

Janella consumes only bananas and passion fruit.It is not possible for Janella's indifference curves to cross one another at any point.

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

Use the following to answer questions : -(Figure: Indifference Curves and Consumption Bundles)Use Figure Indifference Curves and Consumption Bundles.The lines AA and BC are parallel.The optimal consumption point could shift from b to c as a result of any of the following EXCEPT:

Use the following to answer questions : Scenario: E-Books and Sports Tickets Phillip has an income of $300 per month,which he uses to purchase two goods,e-books and sports tickets.Each e-book costs $10,and each sports ticket costs $15. -(Scenario: E-Books and Sports Tickets)Read the scenario E-Books and Sports Tickets.Measure e-books on the horizontal axis and sports tickets on the vertical axis.Suppose the price of e-books decreases.Holding everything else constant,Phillip's budget line has become _____,and his optimal consumption bundle will be on a _____ indifference curve.

Use the following to answer question 109: -(Figure: A Changing Budget Constraint for Strawberries and Shortcake)Use Figure A Changing Budget Constraint for Strawberries and Shortcake.Seb's original budget line is given by BL₁ and his original indifference curve is given by I₁.Which of the following would have caused his budget line to move to BL₂?

Ms.Stardoe gets utility from coffee and cream,but only if they are consumed in the precise ratio of 8 ounces of coffee to 2 ounces of cream.This implies that coffee and cream are ordinary goods for Ms.Stardoe.

Use the following to answer questions : -(Figure: Consumer Equilibrium III)Use Figure Consumer Equilibrium III.A level of total utility NOT attainable is at point:

Use the following to answer questions : Table: Madeline's Preferences for T-Shirts and Coffee Consumption Bundle Quantity of T-Shirts Quantity of Coffee (cups) A 30 3 B 24 4 C 21 5 D 19 6 E 18 7 -(Table: Madeline's Preferences for T-Shirts and Coffee)Use Table Madeline's Preferences for T-Shirts and Coffee.Assume each consumption bundle provides the same level of utility.Suppose Madeline is consuming bundle A but then changes her consumption and slowly moves along her indifference curve to bundles B,C,D,and finally E.As she moves toward bundle E,she gives up:

Use the following to answer questions : -(Figure: Consumer Equilibrium III)Use Figure Consumer Equilibrium III.The lowest level of total utility at which Ivan still spends all of his income is associated with point _____ on _____.

If Ian's indifference curve between guitars and Cadillacs is shaped like a right angle,then he considers the two goods perfect complements.

Higher indifference curves represent _____ lower curves.

When Laurie asks Matt if he wants a large popcorn and small soda or a large soda and small popcorn,Matt says,"Oh,I'm indifferent." This means Matt:

Increases in the price of the good measured on the vertical axis will make the vertical intercept _____ and make the budget line _____.

Suppose the government decides to help poor families with kids by subsidizing the purchase of milk.The subsidy takes the form of a 50% discount in the price of milk.Suppose also that poor families buy only milk and Spam (an inferior good).What happens to the amount of Spam poor families buy?

Use the following to answer questions : Table: Bundles of and Consumption Bundle Quantity of Good X Quantity of Good Y Total Utility (utils) A 2 2 10 B 3 1 10 C 4 4 20 D 1 1 5 -(Table: Bundles of X and Y)Use Table Bundles of X and Y.Bundle(s):

Use the following to answer questions : -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.The highest level of utility is at point:

Karen consumes gasoline and other goods.A new excise tax on gasoline raises the price.However,the government pays Karen an income subsidy that is just enough for her to stay on her original (pre-tax)indifference curve.Her new optimal consumption bundle will have: