ch62 - ch6 Multiple Choice Identify the choice that best...

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ch6 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. If Charlie’s utility function were X 5 A X B , if apples cost 70 cents each, and if bananas cost 10 cents each, Charlie’s budget line would be tangent to one of his indifference curves whenever a. 5 X B = 7 X A . b. X B = X A . c. X A = 5 X B . d. X B = 5 X A . e. 70 X A + 10 X B = M . ____ 2. Ambrose’s brother Anthony has an income of $75 and a utility function U ( x 1 , x 2 ) . The price of good 1 (nuts) is $2 and the price of good 2 (berries) is $1. How many units of nuts will Anthony demand? a. 35 b. 21 c. 23 d. 25 e. 48 ____ 3. Miss Muffett insists on consuming 2 units of whey per unit of curds. If the price of curds is $5 and the price of whey is $6, then if Miss Muffett’s income is m , her demand for curds will be a. . b. . c. 5 C + 6 W = m . d. 5 m . e. . ____ 4. Casper’s utility function is 3 x + y , where x is his consumption of cocoa and y is his consumption of cheese. If the total cost of x units of cocoa is x 2 , the price of cheese is $8, and Casper’s income is $184, how many units of cocoa will he consume? a. 9 b. 12 c. 23 d. 11 e. 24 ____ 5. If x is whips and y is leather jackets, if Kinko’s utility function is U ( x , y ) = min{ 8 x , 4 x + 16 y }, then if the
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This note was uploaded on 05/08/2011 for the course ECON 302 taught by Professor Avrin-rad during the Spring '09 term at University of Illinois, Urbana Champaign.

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ch62 - ch6 Multiple Choice Identify the choice that best...

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