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practiceexam2B

# practiceexam2B - ECON 251 Exam#2 Pink Spring 2010(Practice...

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Page 1 of 11 ECON 251 Exam #2 Pink Spring 2010 (Practice Exam #2B for Spring 2011) 1. Carolina consumers Gatorade and Cheerios. The above graph shows her budget line. Which of the following could have caused the budget line to change as depicted in the above graph? a. An increase in Carolina’s income b. A decrease in the price of Gatorade and a decrease in the price of Cheerios c. An increase in the price of Cheerios d. A decrease in the price of Gatorade 2. If Gatorade is an inferior good for Carolina, we would expect the change in price of Gatorade shown above to result in which of the following when Carolina maximizes her utility?

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Page 2 of 11 Quantity Total Utility from Books Total Utility from Pizza 1 20 10 2 28 19 3 34 25 4 38 30 5 39 32 3. Miles likes to consume books and pizza. What is the marginal utility Miles receives from the 3 rd slice of pizza? 4. If Miles has an income of only \$30 to spend on books and pizza, and pizza and books both cost \$5 each, what is the slope of Miles’ budget line? 5. Again using the table above, and assuming Miles always spends his entire income, Miles should consume ________ books and __________ pizzas when he maximizes his utility. a. 5, 1 b. 1, 5 c. 3, 3 d. 4,2 6. Again using the information provided in the table above, what is the marginal utility per dollar spent on the last pizza purchased?