Exam 5: Consumer Choice

Josh is eating pizza at his favorite Italian restaurant. Below is his utility from this consumption: Total Utility Marginal Utility First slice of pizza 20 20 Second slice of pizza 39 19 Third slice of pizza - 15 Fourth slice of pizza 59 - Table $19.1$ Refer to Table 19.1.For Josh, diminishing marginal utility begins

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.In Figure 19.3, point E

Explain the benefits consumers enjoy from competitive markets.

Josh is eating pizza at his favorite Italian restaurant. Below is his utility from this consumption: Total Utility Marginal Utility First slice of pizza 20 20 Second slice of pizza 39 19 Third slice of pizza - 15 Fourth slice of pizza 59 - Table $19.1$ Refer to Table 19.1.What is Josh's total utility from consuming the third slice of pizza?

A consumer can purchase a product that is outside her or his budget constraint if it is on a higher indifference curve.

Price discrimination only occurs when consumers have only partial information about a product's price and availability.

Psychology and sociology focus on what creates desires for goods, but economics focuses on what consumers actually purchase.

An indifference curve represents combinations of two goods that provide an individual the same total utility.

The law of diminishing marginal utility states that

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Units of TU of MU of Units of TU of MU of Cola Cola Cola Pretzels Pretzels Pretzels 1 40 40 1 30 30 2 \_\_\_ 32 2 \_\_\_ 20 3 96 24 2 66 16 4 112 \_\_\_ 5 84 \_\_\_ Table 19.3 Michael's Utility Schedule Refer to Table 19.3.If Michael has $48 to spend on cola and pretzels, what combination should he purchase in order to maximize his utility?

Which of the following is not held constant when considering a shift in the demand for pizza?

Status and ego considerations in consumption are economic explanations of demand.

Suppose Caesar allocates his entire budget to the purchase of soft drinks and chips.The marginal utility of the last bottle of soft drink purchased is 12 utils, and each bottle costs $1.20.The marginal utility of the last bag of chips purchased is 8 utils, and each bag costs $1.In order to maximize his utility, Caesar should

When sellers price discriminate,

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.If the price per unit of good X is $3, the consumer would maximize utility by consuming

If there is no budget constraint, utility maximization is achieved when marginal utility is zero.

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.In Figure 19.3, given an income of $30 and a price for good Y of $1, which of the following two points represent optimal consumption?

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Units of TU of MU of Units of TU of MU of Cola Cola Cola Pretzels Pretzels Pretzels 1 40 40 1 30 30 2 \_\_\_ 32 2 \_\_\_ 20 3 96 24 2 66 16 4 112 \_\_\_ 5 84 \_\_\_ Table 19.3 Michael's Utility Schedule Refer to Table 19.3.Suppose Michael has $28 to spend on cola and pretzels.What combination should he purchase in order to maximize his utility?

When a rational consumer has stopped buying, she or he will have allocated a limited budget so that the marginal utility per good will be the same.

Consumer theory predicts that a consumer will purchase the product with the highest marginal utility per dollar.