makeupexam2

# 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 . a. equal to b. less than c. greater than d. not comparable to 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.
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? a. Move from b to a b. Move from b to d c. Move from a to b d. Move from d to a 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 a. consume less noodles and more popcorn. b. consume less popcorn and more noodles. c. consume as many noodles as possible, given his income. d. consume as much popcorn as possible, given his income. 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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a. Smoofers are normal goods. b. Smoofers are inferior goods. c. The demand for smoofers has a positive slope. d. Smoofers and widgets are perfect complements. 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? a. C b. A and C c. B d. A and B 9. Sally derives utility from consuming apples and tacos as shown in the table above. Apples cost \$1 each and tacos cost \$2 each. If Sally’s income is \$9, she will consume a. 5 apples and 2 tacos. b. 2 apples and 4 tacos. c. 3 apples and 3 tacos. d. 1 apple and 4 tacos. A B C
Apples Tacos Quantity Total utility Quantity Total utility 1 5 1 10 2 9 2 18 3 12 3 24 4 15 4 28 5 16 5 30 10. The rotation in the budget line in the graph above, corresponds to a. an increase in the price of movies. b.

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## This note was uploaded on 04/27/2011 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue.

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

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