econ ch 5
Refer to the figure above. At a price of $0.25, Mallory's quantity demanded is ______ and Rick's quantity demanded is _____.
70, 60
Refer to the figure above. What is the equilibrium price of bananas in this market?
$5/pound
Refer to the figure above. The marginal utility of the 7th pizza is
-5
Refer to the figure above. The market demand curve indicates that 90 cans of soda will be demanded at a price of
$0.50
Jess gets half as much marginal utility from an additional bagel than from an additional muffin. If the price of muffin is $2.00/each, then Jess is maximizing utility if the price of a bagel is
$1.00
At a price of $25, what is the consumer surplus each day?
30
Refer to the figure above. Suppose the dairy lobby convinces the government to impose price controls in this market. If the government requires all cheese to be sold for a price of at least $8, consumer surplus would equal
$60
Refer to the figure above. At the equilibrium price consumer surplus is
$7.50/day
At the price of 25 cents/each, 500 consumers demand 4 oranges each. At the price of 20 cents/each, 750 consumers demand 5 oranges each. Therefore, the market demand curve for orange will have a quantity of _______ oranges demanded at the price of 25 cents/each and a quantity of ______ oranges demanded at the price of 20 cents/each.
2000, 3750
Refer to the figure above. The total utility of consuming 4 pizzas each week is:
85
Curly loves pizza, and often has supper at an all-you-can eat pizza buffet. Curly eats more pizza there than at the Buy-By-the-Slice pizza stand in the student union because
Curly is setting his Marginal Utility for pizza per dollar equal at each place.
According to the textbook, the homes of the wealthy in Seattle average in excess of 10,000 square feet while the homes of the wealthy in New York City average less than 5,000 square feet. The difference is primarily due to
a significantly higher price for land and construction in NYC.
Assume the consumer is correctly applying the rational spending rule for goods jeans and t-shirts. If the price of jeans falls, purchases of jeans and t-shirts rise because
combinations of jeans and t-shirts that could not be considered before now become available.
Suppose you want to equalize your marginal utility per dollar across all the goods that you consume. If your marginal utility per dollar is higher for one of those items than for any others, you should
consume more of it to reduce your marginal utility.
It is impossible for total utility to be _________ when marginal utility is ___________
decreasing; positive.
Sven likes to water ski, but can only water ski during the one week that 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 vacation convinced him that
even for activities he really enjoys, diminishing marginal utility eventually sets in.
Refer to the figure above. The total utility ______ as additional apples are consumed, but the marginal utility always _______ with each additional apple consumed.
first increases then decreases, decreases
Purchasing goods such that the ratio of marginal utility to price is equal across all goods results in the
greatest total utility.
Sven likes to water ski, but can only water ski during the one week that 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
Assume that Dusty 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. If Dusty's income falls to $20, the rational spending rule would predict that Dusty will buy
less bread and less peanut butter.
Assume that Dusty 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. If Dusty's income rises to $45, the rational spending rule would predict that Dusty will buy
more bread and more peanut butter.
Pat's total utility after eating 99 Reese's Peanut Butter Cups was less than his total utility after eating his hundredth. Therefore, Pat's marginal utility for the 100th peanut butter cup was
negative.
The absolute price of a good in dollar terms is the
nominal price
Pat applies the rational spending rule and purchases 5 units of potato chips and 3 units of lemonade Suppose the price of lemonade increases. One can predict that Pat will
reduce purchases of lemonade and increase purchases of potato chips.
This graph shows one consumer's demand for ice cream at the student union: Picture Joe is one of the students whose demand is shown. Joe buys more ice cream when the price is $2.00 than when the price is $3.00 because
the marginal utility Joe gets from his fifth scoop of ice cream is less than the marginal utility Joe gets from other things that cost $3.00.
If marginal utility is positive as consumption increases,
total utility will increase as consumption increases.
Taking a limousine to a five star restaurant in New York is a
want to both Joe Average and Donald Trump.
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. The price of fish decreased to $1.50 a pound and the price of shrimp remains $5 a pound. At Casey's original income of $150 per week Casey can buy a maximum of _____ pounds fish or a maximum of _____ pounds shrimp.
100, 30
This table shows demand for shoes in a 3 consumer market: Picture What is the market demand for shoes when the price is $50 per pair?
11 Pairs of shoes.
Taylor's marginal utility from watching movies and marginal utility from eating out each month in utils are represented in the following table. Taylor spends exactly $100 every month on these two forms of entertainment, and the price per movie is $10 and price per dinner is $20. Picture Taylor's optimal combination of movies and eating out is
2 movies and 4 dinners.
Jamie's marginal utility for consuming muffins and doughnuts in utils are as follows. Jamie spends $4 for breakfast every morning, the price per muffin is $1.00 and the price per doughnut is $0.50. Picture If Jamie consumes 3 muffins, what is Jamie's marginal utility per dollar from muffins?
25
Refer to the figure above. If the price of Food is $10 and the price of Rooms is $40, then the rational spending rule predicts _____ units of Food and ______ Rooms will be purchased.
2; 3
This graph shows one consumer's demand for ice cream at the student union: Picture During a regular semester, there are 500 students. Each student's demand for ice cream is as depicted above. When the price of one scoop of ice cream is $2.00, those 500 students purchase a total of
3,000 scoops of ice cream
Assume that Dusty 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. If Dusty's income rises to $45, Dusty can now buy a maximum of _____ loaves of bread or a maximum of _____ jars of peanut butter.
30; 15
Refer to the figure above. The total utility of consuming two pizzas in a single week is
45
Refer to the figure above. If the price of Food is $5 and the price of Rooms is $80, then the rational spending rule predicts _____ units of Food and ______ Rooms will be purchased.
4; 1
Refer to the figure above. If the price of Good A is $1 and the price of Good B is $3, then the rational spending rule predicts _____ units of Good A and ______ units of Good B will be purchased.
4; 3
Taylor's marginal utility from watching movies and marginal utility from eating out each month in utils are represented in the following table. Taylor spends exactly $100 every month on these two forms of entertainment, and the price per movie is $10 and price per dinner is $20. Picture If Taylor watches 2 movies a month, Taylor will eat out _____ times per month, and have marginal utility per dollar of _____ from movies and _______ from eating out.
4; 5; 5
Refer to the figure above. What is the equilibrium quantity of bananas in this market?
5 pounds/day
Refer to the figure above. The market demand curve indicates that at a price of $0.75, _______ cans of soda will be demanded.
50
Refer to the figure above. At the price of $1.25,
Mallory and Rick exit the market.
Suppose you are a government analyst, and you want to help homeless families. To do so, you have decided to subsidize rental housing for poor families. (A subsidy is a payment by the government that pays part of the price of a specific product. For example, the government pays part of the rent payment.) If families had been choosing rationally before the subsidy, what is most likely to happen as a result of the subsidy?
People will consume more housing and more of another good, for example, groceries.
Home football games at your college are free for students and most of the students like to go to the game. What is the non-monetary cost for you to go to the game?
The 5 hours you waited in the line to get ticket.
Suppose you are a government analyst and you think beans are particularly nourishing. You decide to subsidize beans in order to encourage people to eat more of them. (By subsidizing an item, consumers pay a lower price.) After you successfully lower bean prices, you notice that consumption of beans has fallen. What went wrong?
The income effect caused people's real income to rise so they purchased less of what they considered to be inferior goods.
If the marginal utility per dollar is not the same for each good, the consumer could _____ her utility by spending ______ on goods for which the marginal utility per dollar is lower.
increase, less
If the marginal utility per dollar is not the same for each good, the consumer could _____ her utility by spending ______ on goods for which the marginal utility per dollar is higher.
increase, more
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. If Casey's income falls to $120, the rational spending rule would predict Casey would buy
less fish and less shrimp.
The time one spends researching the performance and fuel economy of new cars on the Internet is an example of a(n)
non-monetary cost.
This graph shows one consumer's demand for ice cream at the student union: Picture When price is $2 per scoop, each student's consumer surplus is determined by
the area of the triangle of dimension ($4.50 - $2.00) high and 6 long = $7.50.
You are trying to decide how to spend your last lunch dollar. You should use that dollar to buy more of
the item that will give you the greatest marginal utility per dollar spent.