ECON 1030 Chapter 6

shift out parallel to the old one. ++ pivot at the Y-intercept. shift in parallel to the old one. be unaffected.

If a household's income doubles, its budget constraint will

Clothing + Food < $500 $25 × Clothing + $10 × Food ≥ $500 ($25 × Clothing) / ($10 × Food) = $500 $25 × Clothing + $10 × Food = $500++

Jane has $500 a week to spend on clothing (c) and food (f). The price of clothing is $25 and the price of food is $10. What is the equation for Jane's budget constraint?

total; all units total; one more unit additional; all units additional; one more unit ++

Marginal utility is the ________ satisfaction gained by consuming ________ of a good.

increase ++ decrease not change sometimes increase and other times decrease

Price decreases will ________ a household's choice set.

is 1/4 of a hot dog. is 1/2 of a hot dog. is 2 hot dogs. ++ changes as you move down along the budget constraint.

Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hamburger

$20. $60. $80. ++ $100.

Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $4.00. Tom's monthly income is

A. ++ B. E. D.

Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hot dogs?

A. B. E. D. ++

Refer to Figure 6.1. Assume Tom's budget constraint is AC. Given his current monthly income he CANNOT purchase the bundle of goods at point

A. B. E. ++ D.

Refer to Figure 6.1. Assume Tom's budget constraint is AC. He does NOT spend his entire income at point

to the right of budget constraint AC. bounded by the area OAC. ++ along budget constraint AC. along the vertical and horizontal axes.

Refer to Figure 6.1. Tom's budget constraint is AC. His choice set includes all points

AB. AC. AD. The budget constraint is not depicted on the diagram. ++

Refer to Figure 6.4. Billʹs budget constraint is AC. If the bell peppers price increases, Billʹs budget constraint will be

pivot in at point B. ++ pivot out at point A. shift in parallel to AB. pivot in at point A.

Refer to Figure 6.7. Along budget constraint AB, the price of good X is $10 and the price of good Y is $12. If the price of X increases to $15, the budget constraint will

0. 15. ++ 25. 40.

Refer to Figure 6.8. The marginal utility of the first movie rental is

0 ++ 3 25 28

Refer to Figure 6.8. The marginal utility of the fourth movie rental is

first second ++ third fourth

Refer to Table 6.1. Diminishing marginal utility sets in after the ________ soda per day.

1 soda and 2 hamburgers. 4 sodas and 1 hamburger. ++ 3 sodas and 1.5 hamburgers. indeterminate from this information.

Refer to Table 6.1. If the price of a soda is $2, the price of a hamburger is $6, and George has $14 of income, George's utility maximizing combination of sodas and hamburgers per day is

76. 80. ++ 96. indeterminate from this information.

Refer to Table 6.1. The total utility of five hamburgers per day is