makeupexam2 - ECON 251 Makeup Exam#2 Fall 2006 1 In the...

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ECON 251 Makeup Exam #2 Fall 2006 1. In the above figure, if income is $120.00, the price of hamburgers is $3.00, and the price of gasoline is $2.00, which is the correct budget line? a. F b. G c. H d. I
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2. In the figure above, the MRS at point A is ____ the MRS at point B . 3. Mr. Kong consumes curds and whey. The initial price of curds is $1 per unit, and the price of whey is $1.50 per unit. Mr. Kong’s income is $12. When the price of curds doubles to $2 per unit, how does consumption change for Mr. Kong, based on the graph below? a. The initial consumption was at a and after the price change it changes to b. b. The initial consumption was at a and after price change it changes to d. c. The initial consumption was at b and after the price change it changes to a. d. The initial consumption was at d and after the price change it changes to b.
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1 2 3 4 5 5 1 2 3 4 widgets smoofers IC 1 IC 2 B 1 B 2 4. From Mr. Kong’s consumption plan above, after increase in price of curd, which movement explains the substitution effect? 5. Suppose Steve’s marginal utility per dollar spent on ramen noodles is less than the marginal utility per dollar spent on popcorn. If Steve wants to maximize utility, he should 6. Based on the table below, what is Jane’s marginal utility when she increases her consumption of apples from 1 to 2 per month? a. 50 b. 38 c. 30 d. We can’t tell with the information given in the table. Quantity Total Utility Marginal Utility 1 50 50 2 88 Y 3 X 33 4 150 29 5 175 25 7. Which of the following is true, based on the information given on the graph below?
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8. Which of the following indifference maps would represent the preferences for CDs and CD players if you were told that the two goods are perfect complements?
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