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ExamIImicro2006

ExamIImicro2006 - Exam II Answer the next question(s on the...

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Exam II Answer the next question(s) on the basis of the following two schedules which show the amounts of additional satisfaction (marginal utility) which a consumer would get from successive quantities of products J and K. Units Units of J M U j of K MU k 1 56 1 32 2 48 2 28 3 32 3 24 4 24 4 20 5 20 5 12 6 16 6 10 7 12 7 8 1. Refer to the above data. If the consumer has a money income of $52 and the prices of J and K are $8 and $4 respectively, the consumer will maximize her utility by purchasing: A) 2 units of J and 7 units of K. C) 4 units of J and 5 units of K. B) 5 units of J and 5 units of K. D) 6 units of J and 3 units of K. 2. Refer to the above data. What level of total utility is realized from the equilibrium combination of J and K determined in the previous question? 3. Refer to the above data. If the consumer's money income were cut from $52 to $28, she would maximize her satisfaction by purchasing: Use the following to answer questions :
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$20 18 16 14 12 10 8 6 4 2 1 2 3 4 5 6 7 8 Quantity demanded T o t a l r e v e n u e TR 4. Suppose that the above total revenue curve is derived from a particular linear demand curve. That demand curve must be: 5. Suppose that the above total revenue curve is derived from a particular linear demand curve. That demand curve must be: A) inelastic for price declines that increase quantity demanded from 2 units to 3 units. B) elastic for price declines that increase quantity demanded from 5 units to 6 units. C) inelastic for price increases that reduce quantity demanded from 4 units to 3 units. D) elastic for price increases that reduce quantity demanded from 4 units to 3 units.
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