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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 Spring '08
 TOOSSI
 Supply And Demand

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