bination of goods lying outside of the budget line: implies that the consumer is not spending all his income. yields less utility than any point on the budget line. is unobtainable, given the consumer's income. yields less utility than any point inside th

bination of goods lying outside of the budget line: implies that the consumer is not spending all his income. yields less utility than any point on the budget line. is unobtainable, given the consumer's income. yields less utility than any point inside th

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 16SQ

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Question

Question 26

Any combination of goods lying outside of the budget line:
implies that the consumer is not spending all his income.
yields less utility than any point on the budget line.
is unobtainable, given the consumer's income.
yields less utility than any point inside the budget line.

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Question 6 A consumer spends all of her income on two goods, coffee and doughnuts. She buys coffee at 25 cents per unit with a total utility of 800 and a marginal utility of 12. Doughnuts are purchased at 75 cents a unit with a total utility of 200 and a marginal utility of 24. To increase her total utility, the consumer should: Buy more coffee and less doughnuts Buy more of both goods Do nothing. She is currently maximizing utility with her limited budget. Buy less of both goods Buy more doughnuts and less coffee.
Question 36 The rate of market substitution is: The consumer’s marginal utility The consumer’s total utility The slope of the indifference curve The slope of the budget line
Question 9 Consumer equilibrium on an indifference map is at: Any point on the budget line. Any point inside the budget line. Any intersection of the budget line and an indifference curve. That point where the budget line is tangent to an indifference curve. Any point on the highest indifference curve shown on the indifference map.
Question 11 Which one of the following statements is incorrect? Each point on a budget line stands for a different combination of 2 goods. All points on a budget line stand for the same level of satisfaction. The indifference curve is convex to the origin because of the law of diminishing marginal utility. Each point on an indifference curve represents a different combination of 2 goods All points on an indifference curve stand for the same level of satisfaction.
Question 9 If income decreases and prices are unchanged, the consumer’s budget constraint... Group of answer choices remains the same. shifts outward. shifts inward. rotates outward along the horizontal axis.
Question 18 An increase in the price of product A will: cause utility-maximizing consumers to buy more of A. decrease the marginal utility per dollar spent on A. not affect the marginal utility per dollar spent on A. increase the marginal utility per dollar spent on A.
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A consumer can maximize utility relative to their budget if they consume where Question 22 options: they spend the least money possible. marginal utility has fallen to zero. they buy an equal number of all goods. marginal utility per dollar for all goods are equal.
Suppose a consumer has an income of $40, the price of A is $5, and the price of B is $4. Which of the following combinations is on the consumer's budget line? Multiple Choice 8A and 10B 4A and 5B 6A and 3B 3A and 6B
A consumer currently spends a given budget on two goods, X and Y, in such quantities that the marginal utility of X is 15 and the marginal utility of Y is 8. The unit price of X is $3 and the unit price of Y is $2. The utility-maximizing rule suggests that this consumer should Multiple Choice a. decrease consumption of product X and increase consumption of product Y. b. increase consumption of product X and increase consumption of product Y. c. decrease consumption of product Y and increase consumption of product X. d. stick with the current consumption mix because it yields maximum utility.
Question 19 Laila decides to buy a $75 ticket to a particular New York professional hockey game rather than a $50 ticket for a particular Broadway play. We can conclude that Laila: has a higher "marginal utility to price ratio" for the hockey game than for the play. obtains more marginal utility from the play than from the hockey game. is relatively unappreciative of the arts. has recently attended several other Broadway plays.
Question 9 Rational consumer behaviour is where a person consumes the amount of a good that maximises the total utility from the good. maximises the consumer surplus from the good. minimises the amount spent on the good to achieve a given level of utility. maximises the marginal utility from the good