# Quizes - 440 QUIZZES(Ch 36 Quiz 2 NAME The Budget Set 2.1...

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440 QUIZZES (Ch. 36)

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Quiz 2 NAME The Budget Set 2.1 In Problem 2.1, if you have an income of \$12 to spend, if commodity 1 costs \$2 per unit, and if commodity 2 costs \$6 per unit, then the equation for your budget line can be written as (a) x 1 / 2 + x 2 / 6 = 12. (b) ( x 1 + x 2 ) / (8) = 12. (c) x 1 + 3 x 2 = 6. (d) 3 x 1 + 7 x 2 = 13. (e) 8( x 1 + x 2 ) = 12. 2.2 In Problem 2.3, if you could exactly afford either 6 units of x and 14 units of y , or 10 units of x and 6 units of y , then if you spent all of your income on y , how many units of y could you buy? (a) 26. (b) 18. (c) 34. (d) 16. (e) None of the other options are correct. 2.3 In Problem 2.4, Murphy used to consume 100 units of x and 50 units of y when the price of x was 2 and the price of y was 4. If the price of x rose to 5 and the price of y rose to 8, how much would Murphy’s income have to rise so that he could still afford his original bundle? (a) 700. (b) 500. (c) 350. (d) 1,050.

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NAME 443 (d) (3,000, 0) and (0, 6,000). (e) (2,000, 0) and (0, 5,000). 2.7 In the economy of Mungo, discussed in Problem 2.12, there is a third creature called Ike. Ike has a red income of 40 and a blue income of 10. (Recall that blue prices are 1 bcu (blue currency unit) per unit of ambrosia and 1 bcu per unit of bubble gum. Red prices are 2 rcus (red currency units) per unit of ambrosia and 6 rcus per unit of bubble gum. You have to pay twice for what you buy, once in red currency, once in blue currency.) If Ike spends all of its blue income, but not all of its red income, then it must be that (a) it consumes at least 5 units of bubble gum.
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