ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
4th Edition
ISBN: 9781285423548
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 6, Problem 2.5PA
To determine
The Consumer equilibrium in two commodity case given the prices of goods and his budget.
Concept Introduction:
Consumers Equilibrium: In order to maximize his utility, the consumer will spend his income in such a way so that the following condition is satisfied:
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12)Suppose a consumer has $100 to spend on two goods, shoes and shirts. If the price of a pair of shoes is $20 per pair and the price of a shirt is $15 each, which of the following combinations is unaffordable to the consumer?
A) 0 pairs of shoes and 0 shirts
B) 2 pairs of shoes and 4 shirts
C) 5 pairs of shoes and 0 shirts
D) 0 pairs of shoes and 7 shirts
E) 2 pairs of shoes and 3 shirts
17 - Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of an apple is $2.00 and the price of a banana is $1.00. If the consumer spent all of her budget on just apples or just bananas, how many apples or bananas maximum would she be able to buy?
____ 31. Total utility can be thought of as the
a. total satisfaction derived from a bundle of goods.
b. minimum amount of money a consumer is willing to spend on a bundle of goods.
c. additional satisfaction a consumer receives from the marginal unit of a good.
d. willingness to pay for the marginal unit of a good.
Chapter 6 Solutions
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
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