ECON 203 - HW 3

Refer to the accompanying figure. If Laura and Chris are the only two consumers in this market, then the market demand for hamburger will be 9 pounds per week when the price of hamburger is

$1 per pound.

At her current level of consumption, Cameron gets 3 times more marginal utility from an additional game of pinball than from an additional game of ping pong. If the price of a ping pong game is $0.50, then she is maximizing utility if the price of a pinball game is

$1.50.

Refer to the accompanying figure. At the equilibrium price, total consumer surplus in this market is

$12,000 per day.

The accompanying figure shows the demand curve for a product that can be sold only in whole-number amounts: At a price of $25 per unit, what would be the total consumer surplus in this market each day?

$30

The accompanying figure shows the demand curve for a product that can be sold only in whole-number amounts: What is the maximum price that any buyer would be willing to pay for the first unit?

$40

If Zeynep's current budget constraint is BC2, and her budget for ham sandwiches and cheese sandwiches is $120, then the price of a cheese sandwich is

$6.

The accompanying figure shows the demand curve for a product that can be sold only in whole-number amounts: At a price of $15 per unit, what would be the total consumer surplus in this market each day?

$75

For two goods, A and B, the rational spending rule is expressed as

(MUA/PA) = (MUB/PB).

At her current level of consumption, Wiebke's marginal utility from an additional pencil is 15 utils, and her marginal utility from an additional pen is 10 utils. This implies that Wiebke would be willing to give up at most _____ pencils for an additional pen.

0.66

Assume that Destiny has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. At the original income of $30, if the price of a loaf of bread decreased to $1 and the price of a jar of peanut butter increased to $5, then after the price changes, Destiny could buy a maximum of ______ loaves of bread or a maximum of ______ jars of peanut butter.

10 more; 4 fewer

Fran runs a doughnut shop in a tiny 3-person town. The accompanying table shows the quantity demand by the three townspeople at various prices: When the price of a doughnut is 25 cents, what is the market demand for doughnuts?

16 doughnuts

The accompanying figure shows a single consumer's demand for ice cream at the student union: Zoe is one of the students whose demand curve for ice cream is shown above. When price is $4, Zoe demands ______ scoops per week, and when price is $2, Zoe demands ______ scoops.

2; 6

Refer to the accompanying table. If the price of a t-shirt is $6 and the price of a sweater is $80, then the rational spending rule is satisfied when the consumer purchases _____ t-shirts and ______ sweaters.

4; 1

Refer to the accompanying table. If the price of Good A is $1 and the price of Good B is $3, then the rational spending rule is satisfied when the consumer purchases ______ units of Good A and ______ units of Good B.

4; 3

Refer to the accompanying table. If the price of Good A is $2 and the price of Good B is $6, then the rational spending rule is satisfies when the consumer purchases ______ units of Good A and ______ units of Good B.

4; 3

Refer to the accompanying figure. What is the equilibrium quantity of bananas in this market?

5 pounds/day

Refer to the accompanying figure. The marginal utility of the 6th pizza is

5.

Suppose the price of an apple is $1.25, and the price of a banana is $1.00. If Hugh is maximizing his utility, and his marginal utility from consuming an apple is 63 utils, then his marginal utility from consuming a banana must be

50.4 utils.

Casey earns $150 a week and consumes only fish and shrimp. The price of fish is $3 a pound and the price of shrimp is $5 a pound. Casey can buy a maximum of ______ pounds of fish or a maximum of ______ pounds of shrimp.

50; 30

Refer to the accompanying figure. Total utility increases with each additional pizza up to the ______ and then declines, but marginal utility ______ with each additional pizza consumed.

6th pizza; decreases

Laura's total utility from consuming 8, 9, and 10 bonbons is 35, 42, and 45, respectively. Her marginal utility from the 9th bonbon is _____.

7

Fran runs a doughnut shop in a tiny 3-person town. The accompanying table shows the quantity demand by the three townspeople at various prices: When the price of a doughnut is 50 cents, what is the market demand for doughnuts?

9 doughnuts

Refer to the accompanying figure. The total utility of consuming 4 pizzas a week is

90.

As the price of computers falls, the quantity of computers demanded increases. This is an application of

As the price of computers falls, the quantity of computers demanded increases. This is an application of

Suppose Jamal's marginal utility from the first taco he eats is 15, and his marginal utility from the second taco he eats is 12. One can infer that

Jamal's total utility from eating two tacos is 27.

Preeti has vast riches and consumes thousands of dollars' worth of consumer goods each week, yet she is never satisfied. Why not?

People's wants are unlimited.

Suppose Zeynep's budget constraint is initially given by BC1. If her budget constraint shifts to BC2, this could be the result of

a decrease in the price of cheese sandwiches and an increase in income.

Refer to the accompanying table. The law of diminishing marginal utility

applies to both Good A and Good B.

Angela is currently playing five games of pool and bowling three games. At this level of consumption, her marginal utility from a game of pool is 10 and her marginal utility from bowling a game is 6. If both pool and bowling cost $1 a game, Angela should

bowl less and play pool more.

Sven likes to water ski, but he can only water ski during the one week each year when he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and enjoyed every hour. The second day, Sven slept in and then skied for seven hours, which was fun but not as much fun as the first day. The third day, Sven skied for six hours, but was starting to get a bit bored by the end. The fourth day, Sven skied for four hours and then took a nap. On the fifth day of Sven's vacation, Sven went blueberry picking all day. Sven's marginal utility from his first hour of skiing was ______ his marginal utility from his tenth hour of skiing.

greater than

When Lorenzo eats 1 slice of pizza for lunch, his total utility is 23, and when he eats 2 slices of pizza for lunch, his total utility is 42. Assuming that Lorenzo's marginal utility from eating pizza is always positive, we can infer that his total utility from eating 3 slices of pizza at lunch is

greater than 42 and less than 61.

Purchasing goods such that the ratio of marginal utility to price is equal across all goods results in the

greatest total utility.

Refer to the accompanying figure: From the figure, we can infer that James's marginal rate of substitution is

higher at point A than point B.

Refer to the accompanying figure. If Laura and Chris are the only two consumers in this market, then when the price of hamburger decreases from $2.50 to $2 per pound, the quantity demanded in the market will ______ by ______ pound(s) per week.

increase; 1.5

Sven likes to water ski, but he can only water ski during the one week each year when he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and enjoyed every hour. The second day, Sven slept in and then skied for seven hours, which was fun but not as much fun as the first day. The third day, Sven skied for six hours, but was starting to get a bit bored by the end. The fourth day, Sven skied for four hours and then took a nap. On the fifth day of Sven's vacation, Sven went blueberry picking all day. Sven's total utility ______ with each hour that he skied.

increased

During Thanksgiving you participated in a pumpkin pie-eating contest. You really enjoyed the first two pies, the third one was okay, but as soon as you ate the fourth one you became ill and lost the contest. You got ______ utility from eating the fourth pie than from eating the second pie.

less

The rational spending rule is derived from the consumer's desire to

maximize utility.

For two goods, coffee and scones, suppose that MUcoffee / Pcoffee = 4 and MUscones / Pscones = 3. To maximize your total utility from these two goods, you should purchase

more coffee and fewer scones.

Subsistence levels of consumption—the amount of food, shelter, and clothing required to maintain our health—are referred to as

needs.

Keira's total utility after eating 99 Reese's Peanut Butter Cups was greater than her total utility after eating 100 Reese's Peanut Butter Cups. Therefore, Keira's marginal utility from the 100th peanut butter cup was

negative.

Suppose that Fiona spends all of her income on 10 units of good X and 14 units of good Y. Fiona's marginal utility from the 10th unit of good X is 24 utils, and her marginal utility from the 14th unit of good Y is 20 utils. If the price of good X is $8 per unit and the price of good Y is $5 per unit, then to comply with the rational spending rule, Fiona should

purchase less than 10 units of good X and more than 14 units of good Y.

Suppose that Cathy spends all of her income on 20 units of good X and 25 units of good Y. Cathy's marginal utility from the 20th unit of good X is 9 utils, and her marginal utility from the 25th unit of good Y is 19 utils. If the price of good X is $0.50 per unit and the price of good Y is $1.00 per unit, then to comply with the rational spending rule, Cathy should:

purchase less than 20 units of good X and more than 25 units of good Y.

Suppose that Fiona spends all of her income on 8 units of good X and 5 units of good Y. Fiona's marginal utility from the 8th unit of good X is 60 utils, and her marginal utility from the 5th unit of good Y is 75 utils. If the price of good X is $20 per unit and the price of good Y is $28 per unit, then to comply with the rational spending rule, Fiona should:

purchase more than 8 units of good X and less than 5 units of good Y.

The dollar price of a good relative to the average dollar price of all other goods is the good's

real price.

Hector wants to maximize his utility. At his current level of consumption, Hector's marginal utility from an additional cup of coffee is 15 utils, and his marginal utility from an additional can of soda is 11 utils. If the price of a cup of coffee is $3 and the price of a can of soda is $2, Hector should

reallocate his spending away from coffee and towards soda.

The law of demand indicates that as the cost of an activity

rises, less of the activity will occur.

If marginal utility is positive, then as consumption increases

total utility will increase.

The term marginal utility denotes the amount by which ______ changes when consumption changes by ______ unit(s).

total utility; 1

Refer to the accompanying figure. The marginal utility of the 5th apple is

−5.

Refer to the accompanying figure. The marginal utility of the 7th pizza is

−5.