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Consumer Choice - Practice Exam

Terms in this set (5)

The table below represents how Marco feels about chocolate candy bars.

a. Fill in the missing values for total utility and marginal utility.
b. Which is he likely to prefer?
0 — 1 25 25 25 Correct 2 42 42 Correct 17 3 54 12 12 Correct 4 62 62 Correct 8 8 Correct 5 66 4 6 65 65 Correct -1
A soda
Suppose that Biff enters a hot dog eating contest. He enjoys hot dogs, so he gladly pays the $20 entry fee. Biff realizes there is very little chance that he will actually win the contest. He just likes the idea of being able to eat all the hot dogs he wants. The table below shows Biff's utility from eating hot dogs.
c. If Biff is rational, and has no intention of winning the hot dog eating contest, what is the optimal number of hot dogs he will eat? What is the maximum level of utility Biff can reach from eating that number of hot dogs?
48 — 6 52 4 4 Correct 7 54 2 2 Correct 8 55 1 1 Correct 9 54 -1 -1 Correct 10 51 -3 -3 Correct
For the tables, just plot them on the graph.
Optimal number of hot dogs: 8
For maximum level, I did not get that but the answer is not 161 or 209.
Hector would like to buy a new pair of soccer cleats. Hector prefers Adidas to Puma brand soccer cleats. But Hector chooses to buy the Puma brand cleats instead. Which of the following reasons for Hector's choice is consistent with rational consumer choice?
The price of Puma brand soccer cleats was less than the price of Adidas brand soccer cleats.
Lucinda prefers chrysanthemums to gardenias. Chrysanthemums are priced lower than gardenias. Lucinda chooses not to buy the chrysanthemums. Which of the following reasons for Lucinda's choice is consistent with rational consumer choice?
Lucinda would rather spend her income on other goods.
Tom likes to collect Batman and Superman comic books. The table below presents his total and marginal utilities for both types of comic books.

a. Assume the price of a Batman comic book is $1, and the price of a Superman comic book is $2. Fill in the values for the marginal utility per dollar for Batman and Superman comic books in the table below.

b. Suppose Tom has $5 to spend on Batman and Superman comic books (nothing else matters to Tom). If Tom wants to maximize his utility, how many of each should he buy?

c. Now suppose Tom has $10 to spend on Batman and Superman comic books (nothing else matters to Tom). If Tom wants to maximize his utility, how many of each should he buy?
40 40 Correct 1 29 29 Correct 2 28 28 Correct 2 17 17 Correct 3 20 20 Correct 3 7 7 Correct 4 6 6 Correct 4 2 2 Correct 5 0 0 Correct 5 1 1 Correct 6 -10 -10 Correct 6 0 0 Correct 7 -20 -20 Correct 7 -4 -4 Correct

3 Correct Batman comic book(s) and 1 Correct Superman comic book(s)

4 Correct Batman comic book(s) and 3 Correct Superman comic book(s)
THIS SET IS OFTEN IN FOLDERS WITH...