Figure 21-2
2008/11/10 經濟一
Homework #5 budget constraint, indifference
curve, and consumer equilibrium
Name ______________________________
1.Assume that a college student spends her
income on books and pizza. The price of a
pizza is $8.00, and the price of a book is
$15. If she has $100 of income, she could
choose to consume
a. 8 pizzas and 4 books.
b. 4 pizzas and 5 books.
c. 9 pizzas and 3 books.
d. 4 pizzas and 3 books.
ANS: D
Figure 21-1
4.Refer to Figure 21-2. Which of the graphs in
the figure could reflect a decrease in the
prices of both goods?
a. graph (a)
b. graph (b)
c. graph (c)
d. graph (d)
ANS: D
4. A consumer is currently spending all of
her available income on two goods: music
CDs and DVDs. At her current
consumption bundle she is spending twice
as much on CDs as she is on DVDs. If the
consumer has $120 of income and is
consuming 10 CDs and 2 DVDs, what is
the price of a CD?
a. $4
b. $8
c. $12
d. $20
2. It is known that in figure 21-1 point D
represents 100 CDs, and that the price of
CD is $2. Which of the following cannot
be true?
a. Point A costs $150.
b. Point E costs $300.
c. Point C costs $120.
d. Point B costs $200.
ANS: C
3.Refer to Figure 21-2. Which of the graphs in
the figure reflects an increase in the price
of good Y only?
a. graph (a)
b. graph (b)
c. graph (c)
d. graph (d)
ANS: B
5.
The following diagram shows a budget
constraint for a particular consumer.
ANS: C
1
7.Refer to Figure 21-4. Which of the following
statements is true?
a. If a consumer moves from point C to
point A, her loss of Ho-Ho's cannot be
compensated for by an increase in
Twinkies.
b. Point E is preferred to all other points
identified in the figure.
c. Since more is preferred to less, point
C may be preferred to point E in some
circumstances for this consumer.
d. Even though point E has more of both
goods than point B, we could draw a
different set of indifference curves in
which point B is preferred to point E.
ANS: B
8.Refer to Figure 21-4. A person that chooses
to consume bundle C is likely to
a. receive higher total satisfaction at
point C than at point A.
b. spend more on bundle C than bundle
A.
c. receive higher marginal utility from
Ho-Ho's than from Twinkies.
d. receive higher marginal utility from
Twinkies than from Ho-Ho's.
If the price of x is $10, what is the price of
y?
a. $15
b. $25
c. $35
d. $70
ANS: C
Figure 21-4
ANS: D
9.When indifference curves are bowed in toward
the origin,
a. a consumer is less inclined to trade
away goods they are lacking.
b. a consumer's willingness to trade
away goods they have in abundance
diminishes.
c. an increase in income will shift the
indifference curve away from the
origin.
d. a decrease in income will shift the
indifference curve away from the
origin.
6.Refer to Figure 21-4. Which of the following
statements is true?
a. If a consumer moves from point C to
point A, her loss of Ho-Ho's cannot be
compensated for by an increase in
Twinkies.
b. Point E is preferred to all other points
identified in the figure.
c. Since more is preferred to less, point
C may be preferred to point E in some
circumstances for this consumer.
d. Even though point E has more of both
goods than point B, we could draw a
different set of indifference curves in
which point B is preferred to point E.
ANS: A
10.Refer to Figure 21-5. Which of the graphs
shown represent indifference curves for
perfect substitutes?
a. graph (a)
b. graph (b)
c. graph (c)
d. None of the above is correct.
ANS: A
ANS: B
2
Figure 21-5
13. What is the marginal rate of substitution
between points A and B?
a. 2/5
b. 1
c. 5/2
d. 3
ANS: B
14.A consumer has preferences over two goods:
x and y. Three bundles, which all lie on
the same indifference curve for this
consumer, are shown in the following
table.
Bundle
A
B
C
x
2
2
6
y
8
2
2
Which of the following statements
regarding these bundles is correct?
a. The goods are perfect substitutes for
this consumer.
b. The goods are perfect complements
for this consumer.
c. These bundles violate the property
that indifference curves are bowed
inward.
d. These bundles violate the property
that indifference curves do not cross.
11."Left" gloves and "right" gloves provide a
good example of
a. perfect substitutes.
b. perfect complements.
c. negatively sloped indifference curves.
d. positively sloped indifference curves.
ANS: B
ANS: B
12.A set of indifference curves that are only
15.The relationship between the marginal utility
that Wendy gets from eating hamburgers
and the number of hamburgers she eats
per month is as follows:
slightly bowed inward represent goods
that could best be described as
a. perfect substitutes.
b. perfect complements.
c. very close substitutes.
d. very close complements.
Hamburgers
Marginal Utility
ANS: C
1
2
3
4
5
6
20
16
12
8
4
0
Wendy receives 3 units of utility from the
last dollar spent on each of the other
goods she consumes. If hamburgers cost
$4 each, how many hamburgers will she
consume per month if she maximizes
utility?
a. 2
b. 3
c. 4
d. 5
ANS: B
3
sodas. After the third soda and the third slice of
pizza, the marginal utility of a fourth soda is 20
and the marginal utility of a fourth slice of pizza
is 30. You should
A) drink the fourth soda and eat the fourth
slice of pizza because you just can’t have soda
without pizza.
B) drink the fourth soda and not eat a fourth
slice of pizza.
C) eat the fourth slice of pizza and not drink
the fourth soda.
D) not eat the fourth slice of pizza nor drink
the fourth soda.
Answer: C
16.A fall in the price of DVD players leads
consumers to buy more DVD players.
From this information we can conclude
that DVD players
a. are normal goods.
b. are inferior goods.
c. are Giffen goods.
d. None of the above is correct.
ANS: D
17.
Fritos
Quantit
y
0
1
2
3
4
5
6
Fruit drinks
Total
utility
Quantity
Total
utility
0
40
75
105
130
150
165
0
1
2
3
4
5
6
0
50
95
135
170
200
225
The table above shows the total utility from the
two goods Freddy likes to consume. If Freddy
has consumed 4 fruit drinks today and then
decides to drink another,
A) his total utility will increase.
B) the marginal utility from the 5th drink
equals 30.
C) the marginal utility from the 5th drinks
equals 50.
D) Both answers A and B are correct.
20.Refer to Figure 21-9. Assume that the
consumer depicted in the figure has an
income of $40, the price of a bag of
marshmallows is $2, and the price of a
bag of chocolate chips is $2. The
optimizing consumer will choose to
purchase which bundle of marshmallows
and chocolate chips?
a. bundle A
b. bundle B
c. bundle C
d. bundle D
ANS: C
Answer: D
18. The consumer's optimal choice is the one in
which the marginal utility per dollar spent
on good X
a. is equal to the marginal utility per
dollar saved on good X.
b. is greater than the marginal utility per
dollar spent on good Y.
c. is equal to the marginal utility per
dollar spent on good Y.
d. is less than the marginal utility per
dollar spent on good Y.
21. Refer to Figure 21-9. Assume that the
consumer depicted in the figure has an
income of $100 and currently optimizes at
point A. When the price of marshmallows
decreases to $5, which point will the
optimizing consumer choose?
a. Point A
b. Point B
c. Point C
d. Point D
ANS: C
18.The consumer's optimum choice is
represented by
a. MUx/MUy = Px/Py
b. MUx/Px = MUy/Py
c. MRSxy = Px/Py
d. All of the above are correct.
ANS: D
19. A slice of pizza is $2 and a soda is $2. You
have only $14, enough money for either 4 slices
of pizza and 3 sodas, or 3 slices of pizza and 4
ANS: B
4
25. The figure above shows Bob’s and Bev’s
demand curves for hamburgers. There are
1,000,000 people like Bob and another
1,000,000 like Bev in the market for
hamburgers. If the price of a hamburger is $4.00,
the quantity demanded in the market is
A) 5,000,000 hamburgers.
B) 6,000,000 hamburgers.
C) 11,000,000 hamburgers.
D) 14,000,000 hamburgers.
Answer: A
22. Jane is maximizing total utility while
consuming food and clothing. Her
marginal utility from food and clothing
are 50 utils and 25 utils, respectively. If
clothing is priced at $10 per unit, the price
of food must
a. be rising.
b. be falling.
c. equal $5.
d. equal $20.
ANS: D
23. If the consumer's income and all prices
simultaneously decrease by one-half, then
a. the optimum will shift outward
relative to the old optimum.
b. the optimum will move leftward along
the old budget constraint.
c. the optimum will shift inward relative
to the old optimum.
d. the optimum will not change.
ANS: D
24. Suppose at the consumer’s current
consumption bundle the marginal rate of
substitution of cheese for wine is 1/2
bottle of wine per pound of cheese. The
price of one pound of cheese is $6 and the
price of a bottle of wine is $10. The
consumer should
a. increase consumption of cheese and
decrease consumption of wine, and
move to a lower indifference curve.
b. increase consumption of cheese and
decrease consumption of wine, and
move to a higher indifference curve.
c. increase consumption of wine and
decrease consumption of cheese, and
move to a higher indifference curve.
d. increase consumption of cheese and
decrease consumption of wine, and
remain on the same indifference
curve.
ANS: C
5