Sophia Microeconomics Milestone 2.docx - Sophia...

Sophia Microeconomics
Milestone 2
18 questions were answered correctly .
2 questions were answered incorrectly .
1
Last 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 movies
five times.
Determine the income elasticity using the midpoint formula.

1.28

-2.1

0.5

2.5
CONCEPT
Income Elasticity
2
Which point(s) on the graph shown here are over budget?

D only

E and A


B and C

B only
CONCEPT
Optimal Choice
3
If jeans and yoga pants are substitutes, what is true about their
cross-price elasticity?
CONCEPT
Cross-Price Elasticity
4
According to consumer choice theory, what will a rational consumer
do?

Choose the bundle of goods that is least expensive, in order to maximize utility

Compare two bundles of goods and select the one which provides the best utility

Always choose a bundle of goods that has the best quality
CONCEPT
Consumer Choice Theory
5
As the women's soccer coach, Karissa was in charge of choosing and
ordering uniforms. Since the knee socks and shin guards had a unique

matching logo, Karissa only ordered from one particular company. When she
ordered them three years ago, the knee socks were $5 per pair, and the shin
guards were $7 per pair. Karissa ordered 15 pairs of knee socks and 15 pairs
of shin guards.
Now the price of the shin guards hasn't changed, but knee socks were $7 per
pair. Karissa decided she would only buy 10 pairs of shin guards this year.