practiceexam2

# practiceexam2 - ECON 251 Practice Exam#2 Spring 2007...

This preview shows pages 1–4. Sign up to view the full content.

ECON 251 Practice Exam #2 Spring 2007 Quantity of pens Total utility from pens Quantity of pencils Total utility from pencils 0 0 0 0 1 90 1 70 2 155 2 120 3 200 3 150 4 225 4 165 5 240 5 174 6 246 6 176 1. The table above gives the utility from pens and pencils. If pens and pencils both cost \$5 each and the consumer has an income of \$45, which of the following combinations maximizes the consumer’s utility (consumer equilibrium)? a. 3 pens and 6 pencils. b. 4 pens and 5 pencils. c. 5 pens and 4 pencils. d. 6 pens and 3 pencils. 2. The table below contains different combinations of pizza and burgers that Jayson can afford in a given week. His income is \$100 per week. What are the prices of pizzas and burgers? Basket Pizzas Burgers A 0 25 B 4 17 C 8 9 D 12.5 0

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
5 1 2 3 4 smoofers B 1 b 6 7 8 IC 1 widgets 3. If movie tickets cost \$10, and sodas cost \$2, and your income is \$30, what would the equation of your budget line be? (M = quantity of movie tickets and S = quantity of sodas) 4. At point ‘ b ’ on the following graph, which of the following is true? The budget line is labeled “B 1 ”. 5. Refer to the previous graph. What is the consumer’s marginal rate of substitution at point ‘b’? a. 5 widgets per smoofer b. 5 smoofers per widget c. 3.5 widgets per smoofer d. 3.5 smoofers per widget
6. Refer to the last graph. What is the marginal rate of substitution at the point where the consumer maximizes his utility, given the budget line B 1 ? 7. If two goods are perfect substitutes, then the shapes of the indifference curves are 8. Suppose the price of a pair of shoes is \$25 and the price of a T-shirt is \$15. The consumer’s budget is entirely allocated. If the marginal utility of a pair of shoes is 100 units and the marginal utility of a T-shirt is 75 units, the consumer is

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern