.A consumer that chooses to spend all of her income, and she dislikes most the two extreme points such as spending all income on pizza or spending all income on Pepsi, then at which point(s) on the budget constraint could be her alternative choice? a. X b. W c. Y d. V

.A consumer that chooses to spend all of her income, and she dislikes most the two extreme points such as spending all income on pizza or spending all income on Pepsi, then at which point(s) on the budget constraint could be her alternative choice? a. X b. W c. Y d. V

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter20: Consumer Choice And Elasticity

Section: Chapter Questions

Problem 4CQ

See similar textbooks

Related questions

Q: Suppose good 1 cost RM10 and good 2 cost RM4, and suppose a consumer has RM60 to spend. a) Write…

Q: Paul loves hot drinks, and he has a part of his weekly budget earmarked for buying them. In the…

A: Indifference curve is defined as the curve which shows various combinations of two goods which…

Q: Marge also buys pizza for $10 and Pepsi for $2.She has income of $200. Her budget constraint…

A: Budget constraint refers to the amount of expenditure incurred by a consumer to make purchases at…

Q: 5. Tom is willing to forego two gallons of milk in order to try his first container of rice pudding.…

A: As Tom is willing to forego 2 gallons of milk for his first container of rice pudding, his MRS in…

Q: In a two-good world, in which the goods are A and B, what does it mean to be in consumer…

A: When markets struggle to clear and find their final equilibrium point, they are considered to be in…

Q: Which situation is consistent with the law of diminishing marginal utility? a. Paul's marginal…

A: The law of diminishing marginal utility states that as we consume more and more of a unit. The…

Q: Birgitta spends 150 shillings per month on coffee and buns at the cafeteria. A cup of coffee costs…

Q: A person has $ 100 to spend on two goods X and Y whose respective prices are $3 and $5. a. Draw the…

A: The budget line is a graphical measure of all feasible combinations of two goods (X and Y) that an…

Q: If a consumer is consuming a combination of goods and services on his budget line, has the consumer…

A: The budget line is the graphical representation of all the possible combinations of two different…

Q: If price of commodity X = $20 and price of commodity Y =$ 10 and the income= $200From the diagram…

A: Given price of goods X = $20 Price of goods Y = $10 Income = $ 200

Q: When there is a calamity, the government provides help either in the form of food or cash. Which…

A: Cash grants and subsidies are two of the many types of help that are provided by the government to…

Q: Inayah is a rational consumer who consumes milk and cookies only from her monthly income of Rs.…

A: Given: Monthly income = 1500 Price of milk per liter= 500 Price of cookie per pack = 300 1) If…

Q: Melanie has an income of $140 which she can spend on tea at $8 per cup or used clothes at $20 per…

A: Budget line shows the graphical representation of Budget Constraints, which shows the how much…

Q: Jessie has a budget of $50 and is attempting to draw her budget constraint for purchasing cookies…

A: Price of goods can be calculated by using the following formula.

Q: Donald derives utility from only two goods, carrots (Q.) and donuts (Qa). His utility function is as…

A: Utility is the satisfaction that a consumer derives from the consumption of a good. Indifference…

Q: Using examples, does an increase in income affect a consumer’s budget line? Does it impact their…

A: Suppose, X is an individual consuming Grapes and pineapples. X’s income is 150. X gets utility by…

Q: If a consumer has spent all her income on two goods, a and b, and we fins that (MUA) / (MUB) =…

A: A consumer's increased enjoyment from having one more unit of an item or service is referred to as…

Q: Suppose that with a budget of $110, Deborah spends $66 on sushi and $44 on bagels when sushi costs…

A: Given; Income; I=$110Money spent on sushi= $66Money spent on bagels= $44Cost of 1 piece of…

Q: James consumes burgers and pies. His income is $20, and when burgers and pies both cost $1, James…

A: We are going to use consumer behavior theory to answer this question.

Q: You consume only soda and pizza. One day, the priceof soda goes up, the price of pizza goes down,…

A: A. The above figure describes the 2 bundles; the SP line shows that what was the price and the…

Q: Maggie buys peanut butter and jelly, both of whichare normal goods. When the price of peanut…

A: ANS For normal goods both income & substitution effect moves in the same direction. When the…

Q: The budget constraint line by itself tells us preferences and indifference. True O False

A: Budget constraint: - it is a graphical representation of different bundles of goods that a consumer…

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

A: Budget constraint represents different combinations of two commodities that consumers can purchase…

Q: 3. Given a particular budget, if Mrs. Bain would like to maximize her utility from days of horseback…

A: In Indifference Curve Analysis, Consumer Equilibrium is described as a condition in which the…

Q: consider a consumer who consumes only two goods :peas and beans. She has an income of K10, the price…

A: Since you have posted a question with multiple sub- parts, we will solve first three sub-parts for…

Q: Justin Barlow, a careful maximizer of utility, consumes only two goods, Krispy Kreme Doughnuts and…

A: The law of demand is a law that states the relationship between price of a products and its demand.…

Q: What do we mean by well-behaved preferences? How do the indifference curves look like for such…

A: Since the question you posted consists of multiple parts, we will answer the first three parts for…

Q: Suppose Gregg consumers choclate candy barsand oranges .He is given four candy bars and three…

A: The budget constraint reflects the relationship between prices of different goods, consumer income,…

Q: Janelle spends all of her income on songs from iTunes ($1 each) and apps ($5 each) for her iPhone.…

A: Real Income When referring to an individual's income, real revenue is the money earned after…

Q: Marie has a weekly budget of $24, which she likes to spend on magazines and pies. Calculate: a) If…

A: Note: There are multiple sub parts in the question. Therefore, we shall solve the first three for…

Q: 4.. If the preferences are concave, will the consumer ever consume both of the goods together?

A: Meaning of Consumer Surplus: The term consumer surplus refers to the situation under which the…

Q: 1.Originally the consumer faces the budget line p1x1 + p2x2 = m.If the price of good 1 doubles and…

A: Microeconomics studies the economic behavior of individual units such as a seller, a consumer, a…

Q: What is the value of the x-intercept? What is the value of the y-intercept? What is the slope of…

A: Budget constraint is defined as the combinations of all the goods and services that a consumer…

Q: a. Susan has the option to purchase eyeglasses, E, $3 each, and orange juice, O, $1 each. Her income…

A: Budget line shows different combinations of two goods that can be bought with the given level of…

Q: Suppose the budget line changes so that the consumer achieves a new equi librium at point B. What…

A: If the budget line change to point B in the equilibrium. It means that it if there is either or both…

Q: 2. Ernest wants to achieve a utility level of 100. His utility function is U = XY. What is the least…

A: here we calculate the least amount of money that Ernest can spend to achieve a utility level of 100…

Q: What is a budget constraint? A consumer has an income of $3000. Soda costs $3 per liter and cheese…

A: Micro economics is a branch of economics which studies economics at individual level. It means that…

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

A: Utility refers to the total amount of satisfaction that derived from the consumption of goods and…

Q: 1 2 Quantity of Books Suppose the solid line in the graph above illustrates Michael's budget line.…

A: (Since you have asked many questions, we will solve the first one for you. If you want any specific…

Q: Question 1 Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive…

A: Hey, Thank you for the question. According to our policy we can only answer up to 3 sub parts per…

Q: Vijaya spends Rs. 150 per month on coffee and buns at the cafeteria. A cup of coffee costs Rs. 15…

A: According to the budget constraint, the amount of goods that a consumer can purchase over a given…

Q: Help with iii. and iv. No handwriting please Susan has the option to purchase eyeglasses, E, $3…

A: Given; Price of E= $3 Price of O= $1 Income= $24

Q: Suppose Cawlin has a budget of $90 that he spends on movies (Q) and roller skating (Qa. The price of…

A: The budget constraint of a consumer is the maximum amount of two goods which a consumer can buy…

Q: Amy has $12 to spend on coffee and soda. The price of coffee is $2 a cup, and soda is $1 a can.…

A: A) According to the question, "income of Amy is $12 to spend on coffee and soda, price of coffee is…

Q: Susan has the option to purchase eyeglasses, E, $3 each, and orange juice,O, $1 each. Her income is…

Q: Good 1 If the two lines in the diagram above are parallel and shift in the direction of the arrow,…

A: Shifting of budget line due to change in income or change in price level , so here we conclude the…

Q: Wendy's bus ticket and sandwich budget is $2D a week. The price of a bus ticket is $2 and the price…

A: The answer is as follows:-

Q: Suppose Victoria has a budget of $66 that she spends on movies (Q1) and roller skating (Q:). The…

A: Budget constraint: - it is the representation of different combinations of two goods that a consumer…

Q: ↑ Pepsi Pizza Refer to Figure#1. A consumer that chooses to spend all of her income, and she…

Question

.A consumer that chooses to spend all of her income, and she dislikes most the two extreme points such
as
spending all income on pizza or spending all income on Pepsi, then at which point(s) on the budget
constraint could be her alternative
choice?
a. X b. W c. Y d. V

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to confirm the choice of phone minutes and round trips that maximize Jeremys utility.
As a college student you work at a part-time job, but your parents also send you a monthly allowance. Suppose one month your parents forgot to send the check. Show graphically how your budget constraint is affected. Assuming you only buy normal goods, what would happen to your purchases of goods?
Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either call her on the land-line phone for five cents per minute or he can drive to see her, at a roundâ€”trip cost of 2 in gasoline money. He has a total of 10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses a handy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values in Table 6.6, figure out the points 011 Jeremys consumption choice budget constraint (it may be helpful to do a sketch) and identify his utility-maximizing point.
(a) A consumer has utility u(x,y,z) = ln(x) + 2ln(y) + 3ln(z) over the three goods, x,y and z and pz=1. Optimally she consumes 30 units of z. What is her income? How much money does she spend on x? (HINT: MUx = 1/x, MUy= 2/y, MUz = 3/z and remeber the "equivalent bang for the buck" condition). (b) Forget about (a). Suppose you have t= 29 hours in total to spend on 3 projects X,Y and Z to make some money. If you spend x hours on project X, you make 2 sqrt(x) dollars; If you spend y hours on project Y, you make 3 sqrt(y) dollars; If you spend z hours on project Z, you make 4sqrt(z) dollars; Writing down your "utility function" u(x,y,z) and the constraint, solve the utility maximization problem; what is the optimal amount of time to spend on x? on y? on z?
Jill likes to consume coffee and cream in a very particular way: with every cup ofcoffee she always consumes two 0.5 oz. cream containers. Jill is a utility maximizer anddecides to spend her income is $120 per month on coffee and cream. If the price of eachcoffee cup is $2.50, and the price of each cream container is $0.25, she will consume______ cups of coffee and ______ cream containers per month.A) 48; 96.B) 96; 48.C) 240; 480D) 80; 40E) None of the above.
Linda loves buying shoes and going out to dance. Her utility function for pairs of shoes, S, and the number of times she goes dancing per month, T, is U(S + T) = 2ST, so Mus = 2T and Mut = 2S. It costs Linda $50 to buy a new pair of shoes or to spend an evening out dancing. Assume that she has $500 to spend on shoes and dancing What is the equation for her budget line? Draw it (with T on the vertical axis), and label the slope and intercepts. What is Linda’s marginal rate of substitution? Explain. Use math to solve for her optimal bundle. Show how to determine this bundle in a diagram using indifference curves and a budget line
a halving price of the prices of good A and Good B have the same effects on the budget line as doubling income. is this true or false and how woukld it look like using ana equation of a budget line
Consider the following table, which listsJames’s marginal utility schedule for steak andhamburger meals: Given a budget of $45, how many steak and hamburgermeals will James buy per month to maximizehis total utility? What is the total utilityrealized?
Linda loves buying shoes and going out to dance. Her utility function for pairs of shoes, S, and the number of times she goes dancing per month, T, is U(S,T) = 2ST, so MUs = 2T and MUT = 2S. It costs Linda $50 to buy a new pair of shoes or to spend an evening out dancing. Assume that she has $500 to spend on shoes and dancing. A. What is the equation for her budget line? Draw it (with T on the vertical axis) and label the slope and intercepts. B. What is Linda's marginal rate of substitution? Explain. C. Use math to solve for her optimal bundle. Show how to determine this bundle in a diagram using indifference curves and a budget line.
If a consumer has spent all her income on two goods, a and b, and we fins that (MUA) / (MUB) = PA/PB, what can we say about the consumer
Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can either callher on the land-line phone for five cents per minute or he can drive to see her, at a round-trip cost of $2 in gasolinemoney. He has a total of $10 per week to spend on staying in touch. To make his preferred choice, Jeremy uses ahandy utilimometer that measures his total utility from personal visits and from phone minutes. Using the values inTable 6.6, figure out the points on Jeremy’s consumption choice budget constraint (it may be helpful to do a sketch)and identify his utility-maximizing point
Jane is your typical economics student who consumes two goods: economics textbook and coffee. Jane’s income is $40. She can spend it all on books and get 5 or she can spend it all on coffee and get 20 cups.Given this information, construct the equation for Jane’s budget line and plot it (put books on the x–axis and coffee on the y–axis) The following are bundles that Jane can afford with her income (as shown in Table 3.1):Table 3.1BooksCoffee 1- -0 -8 2- Fill in the blanks in the table with quantities that can exhaust Jane’s income. Assume that prices are the same as used in part (a). If marginal utility of a book is 20, what is the marginal utility of coffee if she is maximizing utility?