Exam 22: Consumer Preferences

Use the following to answer questions : -(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.Ashyra consumes at point G.She would be able to realize more total utility by choosing point _____,all other things held equal.

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

Use the following to answer questions : -(Figure: The Consumption of Video Games and E-Books)Use Figure The Consumption of Video Games and E-Books.Which chart shows the effects of an increase in the price of video games when video games and e-books are substitutes but not perfect substitutes?

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

Use the following to answer questions : -An indifference curve map illustrates _____ levels of utility,while each indifference curve in the map indicates consumption bundles that yield _____ level of utility for an individual.

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.The movement from K₂ to K₃ reflects the _____ the decrease in the price of gasoline.

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

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 cheese is $2 per kilogram and Harold has $10 to spend on bread and cheese,Harold _____ his consumption of cheese as the price of bread rises from $1 to $2 per loaf,indicating that bread and cheese are _____.

When we graphically isolate the substitution effect of a change in the price of one good,utility is held constant.

Henry and Anne have identical incomes.Both buy only sardines and ice cream.Since they face the same prices for the two goods,their optimal consumption bundles must be identical.

Pooh spends all of his income on honey and maple syrup.Because he views honey and maple syrup as perfect substitutes,he is willing to substitute honey for maple syrup at the constant rate of 1 teaspoon of honey to 2 teaspoons of maple syrup.If the price of honey in terms of maple syrup is 2.2,Pooh's optimal consumption bundle will consist entirely of maple syrup.

Use the following to answer questions : -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.Assume that you are consuming the combination of goods at point G.Given the budget constraint FL,utility:

Use the following to answer questions : -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.Assume that you are consuming the combination of goods at point K.Given the budget constraint FL,utility can be increased by moving to point:

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

Miguel eats only burgers with onion rings.Miguel's indifference curve between burgers and onion rings must be a straight line.

Use the following to answer questions : -(Figure: Indifference Curves and Consumption Bundles)Use Figure Indifference Curves and Consumption Bundles.In the figure,the initial optimum is at a.The price of hot dogs increases,and the new equilibrium point is c.The change in hot dog consumption due to the income effect of the price change is:

Use the following to answer questions : -A _____ can be generated from indifference curves by changing _____.

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

A typical indifference curve is _____,and its slope is the _____ of the good on the horizontal axis divided by the marginal utility of the good on the vertical axis.

To find her optimal consumption bundle,Vanessa would have to: