Question 1

Are there ever exceptions to the law of demand?

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Question 2

In Figure 5-1 from the text, if the price of pizzas is $8:
a.how many pizzas will the consumer purchase?
b.what is the payment for the optimal number of pizzas?
c.how much consumer surplus will the consumer receive?

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Question 3

What is the marginal rate of substitution, and what role does it play in determining the consumer's optimum choice?

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Question 4

If I use 1,000 gallons of water a month at a price of $.01 a gallon, is my consumer surplus likely to be large or small? Explain.

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Question 5

You have five hours left to study for two exams tomorrow.The relationship between hours of study and test scores is as follows:
Use the rule for determining optimal purchases to allocate your time, where each point is one "util" of utility.

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Question 6

What are the properties of indifference curves?

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Question 7

How do you calculate consumer's surplus? What happens to consumer's surplus when the price of a commodity rises?

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Question 8

Figure 5-20  To plot demand, find marginal utility for each ounce of caviar and plot quantity and MU (see Figure 5-20).At Q = 1, plot $50, at Q = 2, plot 25, ..., at Q = 5, plot 4.
Since there is only a small supply, the price can be as high as $50 an ounce (if S intersects D at one ounce).A larger supply would drop P to $25 (if S intersects D at Q = 2), etc.
-Use the law of diminishing marginal utility to explain why Domino's and Pizza Hut allow the purchase of a second pizza for only $4 when one pays full price (around $10) for the first pizza.Why not simply charge $7 a pizza instead?

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Question 9

What is a budget line? What does its slope indicate?

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Question 10

Define the following terms.Give a complete and precise definition in one sentence.
a.total utility
b.marginal utility
c.consumer's surplus
d."law" of demand

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Quiz 5: Consumer Choice Individual and Market Demand

Are there ever exceptions to the law of demand?

In Figure 5-1 from the text, if the price of pizzas is $8: a.how many pizzas will the consumer purchase? b.what is the payment for the optimal number of pizzas? c.how much consumer surplus will the consumer receive?

What is the marginal rate of substitution, and what role does it play in determining the consumer's optimum choice?

If I use 1,000 gallons of water a month at a price of $.01 a gallon, is my consumer surplus likely to be large or small? Explain.

You have five hours left to study for two exams tomorrow.The relationship between hours of study and test scores is as follows: Use the rule for determining optimal purchases to allocate your time, where each point is one "util" of utility.

What are the properties of indifference curves?

How do you calculate consumer's surplus? What happens to consumer's surplus when the price of a commodity rises?

What is a budget line? What does its slope indicate?

Define the following terms.Give a complete and precise definition in one sentence. a.total utility b.marginal utility c.consumer's surplus d."law" of demand