Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 13, Problem 5MCQ
To determine
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Students have asked these similar questions
Quantity
of cola
600
400
300
Quantity
of pizza
200
A consumer has a total budget of $800 to spend on pizza and cola.
1) Find the price of pizza and that of cola at the initial budget line. What is the slope of the initial budget line.
2) If the prices of the two goods remain the same, what is the new budget of the consumer? How does the consumption of the consumer change? What is the new slope of his
budget line?
Abby's marginal utility per dollar spent on bananas is 15 and her marginal utility per dollar spent on oranges is 10,
how should she spend her income?
She should purchase fewer oranges and more bananas.
She should purchase an equal amount of oranges and bananas.
She should purchase more oranges 'and fewer bananas.
She should purchase more bananas and oranges.
Q1. You have Rs.10. The price of samosa is Rs.1 per unit. The price of a steak sandwich is Rs.3
The utility received from consuming samosa and steak is given below.
a. How many samosas and steak sandwiches should be bought to maximize utility?
Calculate utility maximizing quantities of samosas and steak sandwiches when income equals
Rs.10 and the price of beer is Rs.1 and the price of steak sandwiches is Rs.3 using the utility
b.
maximizing rule
No. of
TU of samosa
MU of
No. of steaks
TU of steaks
MU of steaks
samosas
samosa
1
15
1
24
2
24
45
32
63
4
39
4
75
45
84
47
87
Chapter 13 Solutions
Foundations of Economics (8th Edition)
Ch. 13.A - Prob. 1SPPACh. 13.A - Prob. 2SPPACh. 13.A - Prob. 3SPPACh. 13.A - Prob. 4SPPACh. 13.A - Prob. 5SPPACh. 13.A - Prob. 1IAPACh. 13.A - Prob. 2IAPACh. 13.A - Prob. 3IAPACh. 13.A - Prob. 4IAPACh. 13 - Prob. 1SPPA
Ch. 13 - Prob. 2SPPACh. 13 - Prob. 3SPPACh. 13 - Prob. 4SPPACh. 13 - Prob. 5SPPACh. 13 - Prob. 6SPPACh. 13 - Prob. 7SPPACh. 13 - Prob. 8SPPACh. 13 - Prob. 9SPPACh. 13 - Prob. 10SPPACh. 13 - Prob. 1IAPACh. 13 - Prob. 2IAPACh. 13 - Prob. 3IAPACh. 13 - Prob. 4IAPACh. 13 - Prob. 5IAPACh. 13 - Prob. 6IAPACh. 13 - Prob. 7IAPACh. 13 - Prob. 8IAPACh. 13 - Prob. 9IAPACh. 13 - Prob. 10IAPACh. 13 - Prob. 1MCQCh. 13 - Prob. 2MCQCh. 13 - Prob. 3MCQCh. 13 - Prob. 4MCQCh. 13 - Prob. 5MCQCh. 13 - Prob. 6MCQCh. 13 - Prob. 7MCQ
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- A consumer who has spent all of her income on clothes and food and finds that her marginal-utility for clothes is 16 and marginal-utility for food is 20. If the price of clothes and food are both $4 . What should the consumer do for purchases to maximize total utility A. purchasing more clothes and less food B. purchasing more of both commodities C. purchasing less of both commodities D. purchasing more food and less clothesarrow_forwardQ43 Laurie spends all of her money buying bread and cheese. The marginal utility she receives from the last loaf of bread is 60 and from the last block of cheese is 30. The price of bread is $3 and the price of cheese is $2. Laurie... a. Should buy more cheese and less bread to maximise her utility. b. Should buy more bread and more cheese in order to maximise her utility. c. Spends too much money on bread and cheese. d. Should buy more bread and less cheese in order to maximise her utility. e. Is buying currently the utility-maximising amount of bread and cheese.arrow_forwardQ. Bridget has a limited income and consumes only wine and cheese; her current consumption choice is four bottles of wine and 10 pounds of cheese. The price of wine is $10 per bottle and the price of cheese is $4 per pound. The last bottle of wine added 50 units to Bridget's utility, while the last pound of cheese added 40 units. a. Is Bridget making the utility-maximizing choice? Why or Why not? b. If not, what should she do instead? Why? Please provide the correct answer. Thank you!arrow_forward
- 10- Quantity of D 8 6 2 0 2 6 8 10 4 Quantity of C Refer to the budget line shown in the diagram. Which of the following combinations of goods is unattainable for this consumer? 2 units of C and 6 units of D 1 unit of C and 8 units of D 4 units of C and 6 units of D 5 units of C and no units of Darrow_forwardFor lunch, Maria eats only salads or vegetarian burgers. Her weekly food budget is $36. Each salad costs $6 and each vegetarian burger costs $3. When deciding how much of each good to buy, Maria knows that 2 salads and 4 vegetarian burgers will give her a utility of 8. Maria’s utility-maximizing point is: a. 3 salads, 6 vegetarian burgers b. 4 salads, 6 vegetarian burgers c. 2 salads, 8 vegetarian burgers d. 6 salads, 1 vegetarian burgerarrow_forward#16. Joanna is deciding between consuming Good X and Good Y. At her current level of consumption, her marginal utility per dollar for Good X is greater than the marginal utility per dollar for Good Y. To achieve the consumer optimum, Joanna needs to a. consume more of Good Y until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X. b. consume more of Good X until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X. c. consume more of both Good X and Good Y until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X. d. consume more of Good X or less of Good Y until the marginal utility per dollar for Good X and Good Y is equal. e. continue at her current level of consumption.arrow_forward
- How does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?arrow_forwardSuppose John decides to buy 4 units of food and 4 units of clothing with his $12 budget. Would his marginal utility per dollar spent on food be greater than or less than his marginal utility per dollar spent on clothing? What does this tell you about how he should substitute food for clothing if he wanted to increase his utility without spending any more money?arrow_forwardBob consumes food and housing. Suppose his marginal utility from an additional unit of food is 20 and his marginal utility from an additional unit of housing is 180. Furthermore, suppose the price of a unit of food is $1.00 and the price of a unit of housing is $2.00. Can Bob increase his utility without changing his total expenditures on food and housing? Holding expenditures constant, A. Bob can increase utility by spending more on food and less on housing. B. Bob can increase utility by spending more on food and the same amount on housing. C. Bob can increase utility by spending less on food and more on housing. D. Bob cannot increase his utility. E. Bob can increase utility by spending more on food and more on housing.arrow_forward
- 6. Consumer spends $360 per week on two goods, X and Y. PX=$ 3 and PY=$2. His utility function is U= 2X2Y. What quantities of X and Y does he buy each week in equilibrium?.arrow_forwardDiminishing Marginal Utility. Explain the law of diminishing marginal utility Discuss an instance where you have experienced this. Do consumers continue to purchase something even though its marginal utility is decreasing? Why or why not?arrow_forwardQuestion 2 A consumer is currently purchasing three pairs of jeans and five T-shirts per year. The price of jeans is $50, and shirts cost $25. At the current rate of consumption, the marginal utility of jeans is 150, and the marginal utility of shirts is 100. Based on the model of consumer choice, what should this consumer do to maximize utility? Purchase more shirts and fewer jeans. Purchase fewer shirts and more jeans. Purchase only jeans. This consumer is already maximizing utility. Purchase only shirts.arrow_forward
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