Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 7.A, Problem 1ADQ
Subpart (a):
To determine
The information embodied in a budget line.
Subpart (b):
To determine
The information embodied in a budget line.
Subpart (c):
To determine
The information embodied in a budget line.
Subpart (d):
To determine
The information embodied in a budget line.
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Caci, un
he would spend a dollar buying a first cup of coffee? LO7.2
4. Columns 1 through 4 in the following table show the marginal
utility, measured in utils, that Ricardo would get by purchasing
various amounts of products A, B, C, and D. Column 5 shows
the marginal utility Ricardo gets from saving. Assume that the
prices of A, B, C, and D are, respectively, $18, $6, $4, and $24
and that Ricardo has an income of $106. LO7.2
a. What quantities of A, B, C, and D will Ricardo purchase in
maximizing his utility?
b. How many dollars will Ricardo choose to save?
c. Check your answers by substituting them into the algebraic
statement of the utility-maximizing rule.
nuts, coffee, or both. How big would that buuget nave LU DC DCIUIU
Principles of Economics 1 | S1 21/22
Time left 0:5)
When the price of one good increases and the price of the other good and income are held constant, the budget line
Select one:
shifts parallel to the original budget line so that the new budget line is farther from the origin
O b. shifts parallel to the original budget line so that the new budget line is closer to the origin
rotates so that the intercept is farther from the origin on the axis representing the good that has experienced
an increase in price
O a.
O c.
O d. rotates so that the intercept is closer to the origin on the axis representing the good that has experienced an
increase in price
Next page
Louis is trying to decide what combination of cups and plates to buy. His
budget is $12. Plates cost $4 each and cups cost $2 each. The numbers in
the table represent total utility. Given his budget, which combination will
maximize total utility? number of plates and cups.
Quantity Plates Utility from Plates
1
33
2
3
4
LO
5
6
64
93
103
112
123
Quantity Cups Utility from Cups
1
15
2
3
4
5
6
27
42
54
65
75
Chapter 7 Solutions
Economics (Irwin Economics)
Ch. 7.1 - Prob. 1QQCh. 7.1 - Prob. 2QQCh. 7.1 - Prob. 3QQCh. 7.1 - Prob. 4QQCh. 7.A - Prob. 1ADQCh. 7.A - Prob. 2ADQCh. 7.A - Prob. 3ADQCh. 7.A - Prob. 1ARQCh. 7.A - Prob. 2ARQCh. 7.A - Prob. 1AP
Ch. 7.A - Prob. 2APCh. 7.A - Prob. 3APCh. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQCh. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7P
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Similar questions
- The graph of the budget line below has dollars on the vertical axis and food on the horizontal axis. Which statement is false? D 100 Food The vertical intercept represents all money available for purchasing. The distance OA shows the amount of money spent on OD amount of food. If the amount of money available is known in this graph, then the absolute and relative price of food is known also. The horizontal intercept represents all the food the consumer could purchase with the budget available.arrow_forward= Suppose that consumer has the following utility function: U(X,Y) = 2XY+20X. Suppose also that Px 10, Py = 20 and I = 80. What would be the optimal consumption of X and Y at the equilibrium, respectively? O O O 8,0 6, 1 0,4 4, 2arrow_forwardJanuary is choosing how much of pudding (measured on the horizontal axis) and how much of meat (measured on the vertical axis) to purchase with limited budget of $100. The price of pudding is $1.25 per pound and the price of meat is $3.75 per pound. Suppose the consumer wants to purchase the consumption bundle (20,40). This consumption bundle will be attainable O None of the other alternatives are correct O unattainable O efficientarrow_forward
- The utility-maximizing rule can be stated in words in the following way: A person will maximize utility when the O total utility per dollar spent is the same for all products. marginal utility is the same for all products. O total utility is the same for all products. Omarginal utility per dollar spent is the same for all products.arrow_forwardIf a household's money income is doubled: Select one: O a. the budget constraint is not affected O b. the budget constraint will shift in and parallel to the old one O . the budget constraint will swivel at the Y-intercept O d. the budget constraint will shift out parallel to the old onearrow_forwardSuppose Duncan budgets $20 a week for entertainment. He can either go bowling for $4 a game, or play mini golf for $6 a game. Duncan maximizes his total utility by bowling twice and playing two games of mini golf. If the marginal utility from his second game of mini golf equals 12, what is the marginal utility per dollar from his second game of bowling? O 2 4-arrow_forward
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- Course dashboard Which of the following is TRUE? Lütfen birini seçin: O A. If bundles A and Blie on the budget constraint, we can say that the household has the same utility from consumption of the two bundles. O B. If price of one good increases without any other changes, the budget constraint will shift outward with the same slope. O C. Slope of an indifference curve is called as "Marginal Rate of Technical Substitution" O D. Points below a budget constraint are unattainable. O E. If the money income decreases without any other changes, the budget constraint will shift inward with the same slope.arrow_forward0 2 O 4 6 08 D Scones 10 1 2 3 4 5 Total Utility 10 18 24 Refer to Table 6.3, which shows the total utility and marginal utility derived from the consumption of scones. The first column of the table represents the number of scones a consumer consumes in a day. The second column of the table presents the total utility derived from that consumption, and the third column shows the marginal utility of each additional scone. The total utility derived from the consumption of one scone is units. 28 30 Marginal Utility 6 2arrow_forwardTime left Thomas has utility U = min{3C, T) over cookies and tea. Suppose the price of cookies declines by 1 dollar. How much of the change in demand for tea is a substitution effect? In other words, what is (change h7/change gr)? O a. 0 O b. 1/4 O c. 1/3 O d. 2/3 O e. 3/4 O f. 1 Clear my choice Which of the following utility functions does not represent the same preferences as U(x, y) = x2y/2? O a. U(x, y) = xy O b. U(x, y) = In(x) + In(y) O c. U(x, y) = In(x y) O d. U(x, y) = x2 + yl/2 Clear my choice (we haven" this and yo not expect BOANIT 8arrow_forward
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