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ch14 - ch14 Multiple Choice Identify the choice that best...

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ch14 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Sir Plus has a demand function for mead that is given by the equation D ( p ) = 100 – p . If the price of mead is $85, how much is Sir Plus’s net consumer’s surplus? a. 112.50 b. 15 c. 225 d. 56.25 e. 7,650 ____ 2. Bernice has the utility function u ( x , y ) = min{ x , y }, where x is the number of pairs of earrings she buys per week and y is the number of dollars per week she has left to spend on other things. (We allow the possibility that she buys fractional numbers of pairs of earrings per week.) If she originally had an income of $17 per week and was paying a price of $3 per pair of earrings, then if the price of earrings rose to $7, the compensat- ing variation of that price change (measured in dollars per week) would be closest to ____
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