Question 1

Ambrose has the utility function U(x1, x2)=4x1/21 + x2.If Ambrose were initially consuming 49 units of nuts (good 1)and 12 units of berries (good 2), then what is the largest number of berries that he would be willing to give up in return for an additional 32 units of nuts?

Accepted Answer

A)  9
B)  21
C)  8
D)  4
E)  2 C

Question 2

Joe Bob has a cousin Martin who consumes goods 1 and 2.Martin thinks that 2 units of good 1 is always a perfect substitute for 4 units of good 2.Which of the following utility functions is the only one that would not represent Martin's preferences?

Accepted Answer

A)  U(x1, x2) =40x1 + 20x2 - 10,000.
B)  U(x1, x2) =16x21 +16x1x2 + 4x22.
C)  U(x1, x2) = min{4x1, 2x2}.
D)  U(x1, x2) =4x1 + 2x2 + 1000.
E)  More than one of the above does not represent Martin's preferences. C

Question 3

Charlie has the utility function U(xA, xB)=xAxB.His indifference curve passing through 15 apples and 16 bananas will also pass through the point where he consumes 3 apples and

Accepted Answer

A)  40 bananas.
B)  83 bananas.
C)  20 bananas.
D)  87 bananas.
E)  80 bananas. E

Question 4

Charlie has the utility function U(xA, xB)=xAxB.His indifference curve passing through 6 apples and 16 bananas will also pass through the point where he consumes 2 apples and

Accepted Answer

A)  12 bananas.
B)  24 bananas.
C)  50 bananas.
D)  54 bananas.
E)  48 bananas.

Question 5

Harry Mazzola has the utility function U(x1, x2)=min{x1 + 2x2, 2x1 +x2}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $2 per unit and the price of french fries is $2 per unit, then Harry will

Accepted Answer

A)  consume at least as many corn chips as french fries but might consume both.
B)  definitely spend all of his income on corn chips.
C)  consume at least as many french fries as corn chips but might consume both.
D)  definitely spend all of his income on french fries.
E)  consume equal amounts of french fries and corn chips.

Question 6

Charlie's utility function is U(A, B)= AB, where A and B are the numbers of apples and bananas, respectively, that he consumes.If Charlie is consuming 40 apples and 160 bananas, then if we put apples on the horizontal axis and bananas on the vertical axis, the slope of his indifference curve at his current consumption is

Accepted Answer

A)  -4.
B)  -8.
C)  -41.
D)  -1/4.
E)  -1/8.

Question 7

Charlie has the utility function U(xA, xB)=xAxB.His indifference curve passing through 24 apples and 6 bananas will also pass through the point where he consumes 4 apples and

Accepted Answer

A)  12 bananas.
B)  40 bananas.
C)  24 bananas.
D)  43 bananas.
E)  36 bananas.

Question 8

Charlie's utility function is U(A, B)= AB, where A and B are the numbers of apples and bananas, respectively, that he consumes.If Charlie is consuming 40 apples and 240 bananas, then if we put apples on the horizontal axis and bananas on the vertical axis, the slope of his indifference curve at his current consumption is

Accepted Answer

A)  -1/6.
B)  -12.
C)  -41.
D)  -6.
E)  -1/12.

Question 9

Joe Bob has a cousin Don who consumes goods 1 and 2.Don thinks that 3 units of good 1 is always a perfect substitute for 2 units of good 2.Which of the following utility functions is the only one that would not represent Don's preferences?

Accepted Answer

A)  U(x1, x2) =min{2x1, 3x2}.
B)  U(x1, x2) =20x1 + 30x2 + 10,000.
C)  U(x1, x2) =2x1 + 3x2 + 1000.
D)  U(x1, x2) =4x21 + 12x1x2 + 9x22.
E)  More than one of the above does not represent Don's preferences.

Question 10

Charlie has the utility function U(xA, xB)=xAxB.His indifference curve passing through 40 apples and 9 bananas will also pass through the point where he consumes 5 apples and

Accepted Answer

A)  48 bananas.
B)  77 bananas.
C)  80 bananas.
D)  24 bananas.
E)  72 bananas.

Question 11

Harry Mazzola has the utility function U(x1, x2)=min{x1 +2x2, 2x1 +x2}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $2 per unit and the price of french fries is $2 per unit, then Harry will

Accepted Answer

A)  definitely spend all of his income on corn chips.
B)  consume at least as many french fries as corn chips but might consume both.
C)  consume at least as many corn chips as french fries but might consume both.
D)  definitely spend all of his income on french fries.
E)  consume equal amounts of french fries and corn chips.

Question 12

Phil Rupp, has a sister Ethel who has the utility function U(x, y)=min{x +y, 6y}.Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

Accepted Answer

A)  vertical line segment and a horizontal line segment that meet in a kink along the line y = 5x.
B)  positively sloped line segment and a negatively sloped line segment that meet along the line x = y.
C)  horizontal line segment and a negatively sloped line segment that meet in a kink along the line x = y.
D)  vertical line segment and a horizontal line segment that meet in a kink along the line x = 5y.
E)  horizontal line segment and a positively sloped line segment that meet in a kink along the line x = 5y.

Question 13

Phil Rupp, has a sister Ethel who has the utility function U(x, y)=min{3x + y, 4y}.Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

Accepted Answer

A)  positively sloped line segment and a negatively sloped line segment that meet along the line x = y.
B)  vertical line segment and a horizontal line segment that meet in a kink along the line y =3x.
C)  horizontal line segment and a negatively sloped line segment that meet in a kink along the line x = y.
D)  vertical line segment and a horizontal line segment that meet in a kink along the line x =3y.
E)  horizontal line segment and a positively sloped line segment that meet in a kink along the line x = 3y.

Question 14

Harry Mazzola has the utility function U(x1, x2)=min{x1 + 2x2, 2x1 + x2}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $1 per unit and the price of french fries is $4 per unit, then Harry will

Accepted Answer

A)  consume at least as many corn chips as french fries but might consume both.
B)  consume at least as many french fries as corn chips but might consume both.
C)  definitely spend all of his income on french fries.
D)  definitely spend all of his income on corn chips.
E)  consume equal amounts of french fries and corn chips.

Question 15

Charlie has the utility function U(xA, xB)=xAxB.His indifference curve passing through 12 apples and 64 bananas will also pass through the point where he consumes 2 apples and

Accepted Answer

A)  386 bananas.
B)  48 bananas.
C)  96 bananas.
D)  394 bananas.
E)  384 bananas.

Question 16

Harry Mazzola has the utility function U(x1, x2)=min{x1 + 2x2, 2x1 + x2}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $4 per unit and the price of french fries is $2 per unit, then Harry will

Accepted Answer

A)  definitely spend all of his income on corn chips.
B)  definitely spend all of his income on french fries.
C)  consume at least as many corn chips as french fries but might consume both.
D)  consume at least as many french fries as corn chips but might consume both.
E)  consume equal amounts of french fries and corn chips.

Question 17

Phil Rupp,has a sister Ethel who has the utility function U(x, y)=min{5x + y, 6y}.Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

Accepted Answer

A)  positively sloped line segment and a negatively sloped line segment that meet along the line x = y.
B)  vertical line segment and a horizontal line segment that meet in a kink along the line y = 5x.
C)  vertical line segment and a horizontal line segment that meet in a kink along the line x = 5y.
D)  horizontal line segment and a negatively sloped line segment that meet in a kink along the line x = y.
E)  horizontal line segment and a positively sloped line segment that meet in a kink along the line x = 5y.

Question 18

Charlie's utility function is U(A, B)= AB, where A and B are the numbers of apples and bananas, respectively, that he consumes.If Charlie is consuming 30 apples and 120 bananas, then if we put apples on the horizontal axis and bananas on the vertical axis, the slope of his indifference curve at his current consumption is

Accepted Answer

A)  -31.
B)  -8.
C)  -1/4.
D)  -4.
E)  -1/8.

Question 19

Ambrose has the utility function U(x1, x2)= 4x1/21 + x2.If Ambrose were initially consuming 9 units of nuts (good 1)and 21 units of berries (good 2), then what is the largest number of berries that he would be willing to give up in return for an additional 16 units of nuts?

Accepted Answer

A)  26
B)  5
C)  8
D)  4
E)  2

Question 20

Joe Bob has a cousin Pete who consumes goods 1 and 2.Pete thinks that 3 units of good 1 is always a perfect substitute for 4 units of good 2.Which of the following utility functions is the only one that would not represent Pete's preferences?

Accepted Answer

A)  U(x1, x2) = 40x1 +30x2 -10,000.
B)  U(x1, x2) =4x1 +0 3x2 + 1000.
C)  U(x1, x2) = min{4x1, 3x2}.
D)  U(x1, x2) =16x21 + 24x1x2 + 9x22.
E)  More than one of the above does not represent Pete's preferences.

Exam 3: Utility-Part B

Ambrose has the utility function U(x₁, x₂) =4x^1/2₁ + x₂.If Ambrose were initially consuming 49 units of nuts (good 1) and 12 units of berries (good 2) , then what is the largest number of berries that he would be willing to give up in return for an additional 32 units of nuts?

Joe Bob has a cousin Martin who consumes goods 1 and 2.Martin thinks that 2 units of good 1 is always a perfect substitute for 4 units of good 2.Which of the following utility functions is the only one that would not represent Martin's preferences?

Charlie has the utility function U(x_A, x_B) =x_Ax_B.His indifference curve passing through 15 apples and 16 bananas will also pass through the point where he consumes 3 apples and

Charlie has the utility function U(x_A, x_B) =x_Ax_B.His indifference curve passing through 6 apples and 16 bananas will also pass through the point where he consumes 2 apples and

Harry Mazzola has the utility function U(x₁, x₂) =min{x₁ + 2x₂, 2x₁ +x₂}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $2 per unit and the price of french fries is $2 per unit, then Harry will

Charlie has the utility function U(x_A, x_B) =x_Ax_B.His indifference curve passing through 24 apples and 6 bananas will also pass through the point where he consumes 4 apples and

Joe Bob has a cousin Don who consumes goods 1 and 2.Don thinks that 3 units of good 1 is always a perfect substitute for 2 units of good 2.Which of the following utility functions is the only one that would not represent Don's preferences?

Charlie has the utility function U(x_A, x_B) =x_Ax_B.His indifference curve passing through 40 apples and 9 bananas will also pass through the point where he consumes 5 apples and

Harry Mazzola has the utility function U(x₁, x₂) =min{x₁ +2x₂, 2x₁ +x₂}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $2 per unit and the price of french fries is $2 per unit, then Harry will

Phil Rupp, has a sister Ethel who has the utility function U(x, y) =min{x +y, 6y}.Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

Phil Rupp, has a sister Ethel who has the utility function U(x, y) =min{3x + y, 4y}.Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

Harry Mazzola has the utility function U(x₁, x₂) =min{x₁ + 2x₂, 2x₁ + x₂}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $1 per unit and the price of french fries is $4 per unit, then Harry will

Charlie has the utility function U(x_A, x_B) =x_Ax_B.His indifference curve passing through 12 apples and 64 bananas will also pass through the point where he consumes 2 apples and

Harry Mazzola has the utility function U(x₁, x₂) =min{x₁ + 2x₂, 2x₁ + x₂}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $4 per unit and the price of french fries is $2 per unit, then Harry will

Phil Rupp,has a sister Ethel who has the utility function U(x, y) =min{5x + y, 6y}.Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

Ambrose has the utility function U(x₁, x₂) = 4x^1/2₁ + x₂.If Ambrose were initially consuming 9 units of nuts (good 1) and 21 units of berries (good 2) , then what is the largest number of berries that he would be willing to give up in return for an additional 16 units of nuts?

Joe Bob has a cousin Pete who consumes goods 1 and 2.Pete thinks that 3 units of good 1 is always a perfect substitute for 4 units of good 2.Which of the following utility functions is the only one that would not represent Pete's preferences?

Exam 3: Utility-Part B

Ambrose has the utility function U(x1, x2) =4x1/21 + x2.If Ambrose were initially consuming 49 units of nuts (good 1) and 12 units of berries (good 2) , then what is the largest number of berries that he would be willing to give up in return for an additional 32 units of nuts?

Joe Bob has a cousin Martin who consumes goods 1 and 2.Martin thinks that 2 units of good 1 is always a perfect substitute for 4 units of good 2.Which of the following utility functions is the only one that would not represent Martin's preferences?

Charlie has the utility function U(xA, xB) =xAxB.His indifference curve passing through 15 apples and 16 bananas will also pass through the point where he consumes 3 apples and

Charlie has the utility function U(xA, xB) =xAxB.His indifference curve passing through 6 apples and 16 bananas will also pass through the point where he consumes 2 apples and

Harry Mazzola has the utility function U(x1, x2) =min{x1 + 2x2, 2x1 +x2}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $2 per unit and the price of french fries is $2 per unit, then Harry will

Charlie has the utility function U(xA, xB) =xAxB.His indifference curve passing through 24 apples and 6 bananas will also pass through the point where he consumes 4 apples and

Joe Bob has a cousin Don who consumes goods 1 and 2.Don thinks that 3 units of good 1 is always a perfect substitute for 2 units of good 2.Which of the following utility functions is the only one that would not represent Don's preferences?

Charlie has the utility function U(xA, xB) =xAxB.His indifference curve passing through 40 apples and 9 bananas will also pass through the point where he consumes 5 apples and

Harry Mazzola has the utility function U(x1, x2) =min{x1 +2x2, 2x1 +x2}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $2 per unit and the price of french fries is $2 per unit, then Harry will

Phil Rupp, has a sister Ethel who has the utility function U(x, y) =min{x +y, 6y}.Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

Phil Rupp, has a sister Ethel who has the utility function U(x, y) =min{3x + y, 4y}.Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

Harry Mazzola has the utility function U(x1, x2) =min{x1 + 2x2, 2x1 + x2}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $1 per unit and the price of french fries is $4 per unit, then Harry will

Charlie has the utility function U(xA, xB) =xAxB.His indifference curve passing through 12 apples and 64 bananas will also pass through the point where he consumes 2 apples and

Harry Mazzola has the utility function U(x1, x2) =min{x1 + 2x2, 2x1 + x2}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $4 per unit and the price of french fries is $2 per unit, then Harry will

Phil Rupp,has a sister Ethel who has the utility function U(x, y) =min{5x + y, 6y}.Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

Ambrose has the utility function U(x1, x2) = 4x1/21 + x2.If Ambrose were initially consuming 9 units of nuts (good 1) and 21 units of berries (good 2) , then what is the largest number of berries that he would be willing to give up in return for an additional 16 units of nuts?

Joe Bob has a cousin Pete who consumes goods 1 and 2.Pete thinks that 3 units of good 1 is always a perfect substitute for 4 units of good 2.Which of the following utility functions is the only one that would not represent Pete's preferences?

Ambrose has the utility function U(x₁, x₂) =4x^1/2₁ + x₂.If Ambrose were initially consuming 49 units of nuts (good 1) and 12 units of berries (good 2) , then what is the largest number of berries that he would be willing to give up in return for an additional 32 units of nuts?

Charlie has the utility function U(x_A, x_B) =x_Ax_B.His indifference curve passing through 15 apples and 16 bananas will also pass through the point where he consumes 3 apples and

Charlie has the utility function U(x_A, x_B) =x_Ax_B.His indifference curve passing through 6 apples and 16 bananas will also pass through the point where he consumes 2 apples and

Harry Mazzola has the utility function U(x₁, x₂) =min{x₁ + 2x₂, 2x₁ +x₂}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $2 per unit and the price of french fries is $2 per unit, then Harry will

Charlie has the utility function U(x_A, x_B) =x_Ax_B.His indifference curve passing through 24 apples and 6 bananas will also pass through the point where he consumes 4 apples and

Charlie has the utility function U(x_A, x_B) =x_Ax_B.His indifference curve passing through 40 apples and 9 bananas will also pass through the point where he consumes 5 apples and

Harry Mazzola has the utility function U(x₁, x₂) =min{x₁ +2x₂, 2x₁ +x₂}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $2 per unit and the price of french fries is $2 per unit, then Harry will

Harry Mazzola has the utility function U(x₁, x₂) =min{x₁ + 2x₂, 2x₁ + x₂}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $1 per unit and the price of french fries is $4 per unit, then Harry will

Charlie has the utility function U(x_A, x_B) =x_Ax_B.His indifference curve passing through 12 apples and 64 bananas will also pass through the point where he consumes 2 apples and

Harry Mazzola has the utility function U(x₁, x₂) =min{x₁ + 2x₂, 2x₁ + x₂}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $4 per unit and the price of french fries is $2 per unit, then Harry will

Ambrose has the utility function U(x₁, x₂) = 4x^1/2₁ + x₂.If Ambrose were initially consuming 9 units of nuts (good 1) and 21 units of berries (good 2) , then what is the largest number of berries that he would be willing to give up in return for an additional 16 units of nuts?