Exam 21: The Theory of Consumer Choice

Figure 21-30 The graph shows two budget constraints for a consumer. -Refer to Figure 21-30. Suppose the consumer's income is $90 and Budget Constraint A applies. What is the price of a light bulb?

A consumer chooses an optimal consumption point where the

Figure 21-20 The following graph illustrates a representative consumer's preferences for marshmallows and chocolate chip cookies: -Refer to Figure 21-20. Assume that the consumer has an income of $40. Based on the information available in the graph, which of the following price-quantity combinations would be on her demand curve for marshmallows if the price of chocolate chips were $4?

When Joshua's income increases, he purchases more prime­rib dinners than he did before his income increased. For Joshua, prime-rib dinners are a(n)

Figure 21-7 -Refer to Figure 21-7. Suppose a consumer has $200 in income, the price of a book is $5, and the price of a DVD is $10. What is the value of B?

If John's marginal utility derived from the consumption of another candy bar is 1 and the price of the candy bar is $1.50, then

The two "goods" used when economists analyze labor supply are

Figure 21-9 -Refer to Figure 21-9. If the consumer has $600 in income, what is the price of good X?

Figure 21-4 In each case, the budget constraint moves from BC-1 to BC-2. -Refer to Figure 21-4. Which of the graphs in the figure could reflect an increase in income?

When the price of an inferior good increases,

Which of the following does not represent a tradeoff facing a consumer?

The substitution effect in the work-leisure model induces a person to work less in response to higher wages, which tends to make the labor-supply curve slope upward.

Figure 21-24 The figure shows three indifference curves and a budget constraint for a certain consumer named Steve. -Refer to Figure 21-24. At his optimum, Steve is willing to give up about

Jack and Diane each buy pizza and paperback novels. Pizza costs $3 per slice, and paperback novels cost $5 each. Jack has a budget of $30, and Diane has a budget of $15 to spend on pizza and paperback novels. Which consumer(s) can afford to purchase 5 slices of pizza and 5 paperback novels?

When indifference curves are downward sloping, the marginal rate of substitution is usually constant.

In the upward-sloping portion of the individual labor-supply curve, the substitution effect is

Two economists found empirical evidence that when the price of rice decreased in the Hunan province of China, local residents consumed less rice than before the price decrease. The study provides a real-world example of a(n)

When Ryan has an income of $2,000, he consumes 30 units of good A and 50 units of good B. After Ryan's income decreases to $1,500, he consumes 23 units of good A and 55 units of good B. Which of the following statements is correct?

Irrespective of whether she is at her optimum, Jenna's valuation of coffee relative to orange juice can be measured by

A rational consumer maximizes her