Exam 22: Consumer Preferences

Higher indifference curves represent:

Javon is consuming his optimal utility-maximizing consumption bundle of lobster and macaroni-and-cheese dinners when he loses his job and has less money to spend.Both are normal goods.When he adjusts his consumption to reflect the new level of income,the number of macaroni-and-cheese dinners he consumes:

Use the following to answer questions : -For most goods,indifference curves:

Use the following to answer questions : -(Figure: Consumer Equilibrium III)Use Figure Consumer Equilibrium III.Which of the following statements is TRUE?

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

One point on an indifference curve drawn between mangoes and vegetable broth is the consumption bundle consisting of five mangoes and three boxes of vegetable broth.This means that Sharri is indifferent between five mangoes and three boxes of vegetable broth.

If ramen is a Giffen good and the price of ramen decreases:

The following bundles can all be on the same indifference curve.Bundle A: four enchiladas,one burrito;bundle B: three enchiladas,three burritos;bundle C: two enchiladas,two burritos.

Use the following to answer questions : -Javon is consuming his optimal utility-maximizing consumption bundle of lobster and macaroni-and-cheese dinners.Call this bundle A.His income is $100,the price of a macaroni-and-cheese dinner is $5,and the price of a lobster is $20.Put lobsters on the vertical axis and put macaroni-and-cheese dinners on the horizontal axis.His income increases to $500 and the prices of macaroni-and-cheese dinners and lobster remain constant.With the increase in income,Javon changes his consumption of the two goods and now maximizes utility at bundle B.If macaroni-and-cheese dinners are an inferior good for Javon:

Use the following to answer questions : -(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.Which of the following statements is TRUE?

Use the following to answer questions : -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.The lowest level of utility shown in the figure is associated with indifference curve:

Use the following to answer questions : -(Figure: Income and Substitution Effects)Use Figure Income and Substitution Effects.Carlos is consuming his optimal consumption bundle at point A when the price of gasoline falls.As Carlos moves to his new optimal consumption bundle,we observe that gasoline:

Use the following to answer questions : Figure: Harold's Indifference Curves The figure shows three of Harold's indifference curves for bread and cheese. -(Figure: Harold's Indifference Curves)Use Figure Harold's Indifference Curves.If the price of bread is $2 per loaf,the price of cheese is $2 per kilogram,and Harold has $10 to spend on bread and cheese,Harold's optimal consumption bundle is _____ loaves of bread and _____ kilograms of cheese.

If potatoes are an inferior good and the price of potatoes decreases,the _____ effect(s)will cause a(n)_____ in the consumption of potatoes.

Higher total utility is represented by _____ indifference curve.

Use the following to answer questions : -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.The highest attainable level of utility,given budget constraint FL,is at point:

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

The assumption that the farther from the origin an indifference curve is,the higher the level of utility it indicates implies that more is better.

A demand curve is generated from indifference curves by changing:

Mr.Coiner is always willing to exchange two nickels for a dime,no matter how many nickels and dimes he has.This implies that nickels and dimes are ordinary goods for Mr.Coiner.