Sophia Microeconomics Milestone 2.docx - Sophia...

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Sophia MicroeconomicsMilestone 218questions were answeredcorrectly.2questions were answeredincorrectly.1Last month, Robert’s income was $1,000, and he went to the movies twice.This month, Robert’s income increased to $2,000, and he went to the moviesfive times.Determine the income elasticity using the midpoint formula.1.28-2.10.52.5CONCEPTIncome Elasticity2Which point(s) on the graph shown here are over budget?D onlyE and A
B and CB onlyCONCEPTOptimal Choice3If jeans and yoga pants are substitutes, what is true about theircross-price elasticity?CONCEPT
Cross-Price Elasticity4According to consumer choice theory, what will a rational consumerdo?
Choose the bundle of goods that is least expensive, in order to maximize utilityCompare two bundles of goods and select the one which provides the best utilityAlways choose a bundle of goods that has the best qualityCONCEPTConsumer Choice Theory5As the women's soccer coach, Karissa was in charge of choosing andordering uniforms. Since the knee socks and shin guards had a unique
matching logo, Karissa only ordered from one particular company. When sheordered them three years ago, the knee socks were $5 per pair, and the shinguards were $7 per pair. Karissa ordered 15 pairs of knee socks and 15 pairsof shin guards.Now the price of the shin guards hasn't changed, but knee socks were $7 perpair. Karissa decided she would only buy 10 pairs of shin guards this year.

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Term
Fall
Professor
Benjamin Wright
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