Which of the following statements about a budget line is correct? The opportunity cost of the good is represented by the slope of the budget line measured along the x-axis. Consuming more of one thing entails consuming more of the other in terms of budget. The budget line shifts leftward as the consumer's budget increases, but the slope remains unchanged. Because the consumer may afford both things, the slope of the budget line indicates that there is no tradeoff between them. None of the above.

Which of the following statements about a budget line is correct? The opportunity cost of the good is represented by the slope of the budget line measured along the x-axis. Consuming more of one thing entails consuming more of the other in terms of budget. The budget line shifts leftward as the consumer's budget increases, but the slope remains unchanged. Because the consumer may afford both things, the slope of the budget line indicates that there is no tradeoff between them. None of the above.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 23SQ

See similar textbooks

Similar questions

Assuming the two good case. When a person is attempting to maximize utility and the price of one of the two goods increases, then: The budget constraint will contract (rotate towards the origin), shifting the budget line inward indicating more choices are now affordable and a lower utility level is now possible. The budget constraint will contract (rotate towards the origin), shifting the budget line outward indicating fewer more are now affordable and a higher utility level is now possible. The budget constraint will contract (rotate towards the origin), shifting the budget line inward indicating fewer choices are now affordable and a lower utility level is now possible.
A budget constraint, budget set or budget line: 1. Illustrates the combination of units of consumption across two goods that are not affordable, given prices and income. The outer most boundary signifies a person is consuming at a level that exceeds all income. 2. Illustrates the combination of units of consumption across two goods that are unattainable, given prices and income. The outer most boundary signifies a person is consuming at a level that fails to exhaust all income. 3. Illustrates the combination of units of consumption across two goods that are affordable, given prices and income. The outer most boundary signifies a person is consuming at a level that maximizes savings. 4. Illustrates the combination of units of consumption across two goods that are affordable, given prices and income. The outer most boundary signifies a person is consuming at a level that exhausts all income.
Describe in detail, explaining detail, and provide a matching drawing of your own budget constraint.
Which of the following statements is true? Total utility is the extra satisfaction from the consumption of a good or service. Marginal utility is the amount of satisfaction received from all the units of a good or service consumed. The law of diminishing marginal utility states that as more of a good or service is consumed total utility decreases. Consumer equilibrium is a combination of goods and services consumed which maximizes total utility from a given budget.
Assuming the two good case. When a person is attempting to maximize utility and the price of one of the two goods increases, then: a. The budget constraint will expand (rotate away from the origin), shifting the budget line outward indicating fewer choices are now affordable and a lower utility level is now possible. b. The budget constraint will contract (rotate towards the origin), shifting the budget line inward indicating more choices are now affordable and a lower utility level is now possible. c. The budget constraint will contract (rotate towards the origin), shifting the budget line outward indicating fewer more are now affordable and a higher utility level is now possible. d. The budget constraint will contract (rotate towards the origin), shifting the budget line inward indicating fewer choices are now affordable and a lower utility level is now possible.
An increase in the price of good y would Select one: a. Shift the budget line b. budget line pivots from x-intercept to the left c. Shift the indifference curve d. budget line pivots from x-intercept to the right
Assuming the two good case. When a person is attempting to maximize utility and income increases, then: a. The budget constraint expands, shifting the budget line outward indicating more choices are now affordable and a higher utility level is now possible. b. The budget constraint contracts, shifting the budget line outward indicating more choices are now affordable and a higher utility level is now possible. c. The budget constraint expands, shifting the budget line inward indicating more choices are now affordable and a lower utility level is now possible. d. The budget constraint contracts, shifting the budget line outward indicating more choices are now affordable and a lower utility level is now possible.
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.
Consumers always wanted to maximize their level of satisfaction a. budget is equal to income b. budget is the ability to allocate resources to maximize satisfaction c. Two of the choices are correct d. budget is the only constraint e. income is equal to expenditures
Hector has a budget for bottled water and soda pop. If the price of soda pop decreases, Hector will achieve the same level of satisfaction because his budget has not changed. true false
Show how the budget constraint affects utility maximization.
You were presented with a utility maximizing rule which states: If you always choose the item with the greatest marginal utility per dollar spent, when your budget is exhausted, the utility maximizing choice should occur where the marginal utility per dollar spent is the same for both goods. That rule is expressed as follows: Group of answer choices (The marginal utility associated with good 1 / the price of good 2) = (the marginal utility associated with good 2 / the price of good 1) % change in price / % change in quantity (The marginal utility associated with good 1 / the price of good 1) = (the marginal utility associated with good 2 / the price of good 2) The marginal utility per dollar of good 1 > the marginal utility per dollar of good 2.