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ECON 101 Quiz: ECON 101 IA State Quiz7 S2000

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turquoisegnu128
31 Jan 2019
School
Iowa State University
Department
Economics
Course
ECON 101
Professor
All

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Document Summary

Jeff spends all his income on warm-up suits and running shoes. The price of a warm-up suit is three times as large as the price for a pair of running shoes. In an equilibrium for an individual consumer, a. the slope of the budget line and the slope of the indifference curve are equal p2 p1 (cid:2) Muq1 (cid:2) p2 p1 both a and b a, b, and c b. c. d. e: for this problem p1 = 4, p2 = 4 and i = 76. Below is a table of alternative consumption choices and the utility and the marginal utility they provide. Which is the optimal choice? q1 q2 cost. The initial situation is p1 = 12, p2. Then the price of p1 falls to 2. The consumer buys more of good one as its price falls. Substitution and income effects are evaluated at the new utility level.

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Related Questions

Howt is total utility maximized in Economics?

The marginal utility of good A is 4 utils and its price is $2.The marginal utility of good B is 6 utils and its price is $1. Is the individual consumer maximizing total utility if she spends a total of $3 by buying one unit of each good? If not, how can more utility be obtained?

 

 

Jeffrey spends all of his income on warm-up suits and running shoes, and the price of a warm-up suit is four times the price per pair of shoes. Then, in order to maximize total utility, Jeffrey should

a. buy four times as many warm-up suits as pairs of running shoes

b. buy four times as many pairs of running shoes as warm-up suits

c. divide his income equally between warm-up suits and running shoes

d. buy both items until the marginal utility of a warm-up suit is four times the marginal utility of a pair of running shoes

e. buy both items until the marginal utility of a pair of running shoes is four times the marginal utility of a warm-up suit

24) Suppose a consumer spends all his income. His marginal utility per dollar on X is 4 and marginal utility per dollar on Y is 2. We know that A) utility can be increased by decreasing the consumption of X and increasing the consumption of Y. B) the price of Y must be eight times the price of X. C) utility can be increased by increasing the consumption of X and decreasing the consumption of Y. D) utility is maximized. E) the price of Y must be one-third the price of X.