Question 1

Explain why, in most cases, you would rather receive a gift of $25 cash over receiving a $25 sweater chosen by your significant other.

Accepted Answer

The answer of Explain why, in most cases, you would...

Question 2

What is shown by the indifference map for two goods? Which indifference curve would a consumer want to be on?

Accepted Answer

The answer of What is shown by the indifference map...

Question 3

Discuss the decision a criminal must make before deciding whether or not to steal.

Accepted Answer

The answer of Discuss the decision a criminal must make...

Question 4

What are two related effects that combine to make a consumer able and willing to buy more of a specific product at a lower price than at a higher price? Explain.

Accepted Answer

The answer of What are two related effects that combine...

Question 5

What happens to the budget line when the price of a product falls? Use indifference curve analysis to explain how this change affects consumption of the product.

Accepted Answer

The answer of What happens to the budget line when...

Question 6

Discuss the basic determinants for an individual's demand for a specific good or service.

Accepted Answer

The answer of Discuss the basic determinants for an individual's...

Question 7

What is shown by the budget line in a two-product (A andB)case? Describe what happens when there is a change in income or the price of a product.

Accepted Answer

The answer of What is shown by the budget line...

Question 8

How can the utility-maximizing rule be used to explain the substitution and income effect?

Accepted Answer

The answer of How can the utility-maximizing rule be used...

Question 9

Why are indifference curves downsloping?

Accepted Answer

The answer of Why are indifference curves downsloping?...

Question 10

What is consumer equilibrium? How is it achieved?

Accepted Answer

The answer of What is consumer equilibrium? How is it...

Question 11

List two important characteristics of indifference curves for two goods.

Accepted Answer

The answer of List two important characteristics of indifference curves...

Question 12

State the utility-maximizing rule for two products in words and using algebra.

Accepted Answer

The answer of State the utility-maximizing rule for two products...

Question 13

Why is it not sufficient to just compare the marginal utility of two goods when maximizing utility?

Accepted Answer

The answer of Why is it not sufficient to just...

Question 14

Why would an ounce of gold be priced higher than an ounce of coffee beans, even though coffee is generally considered more essential than gold?

Accepted Answer

The answer of Why would an ounce of gold be...

Question 15

Explain the meaning of the marginal rate of substitution.

Accepted Answer

The answer of Explain the meaning of the marginal rate...

Question 16

Use marginal-utility analysis to explain the growing popularity of iPads and other tablets over laptops and desktop computers.

Accepted Answer

The answer of Use marginal-utility analysis to explain the growing...

Question 17

Describe the relationship between raising the marginal cost of crime and the quantity of crime committed. Explain the implications of this relationship as applied to property crimes.

Accepted Answer

The answer of Describe the relationship between raising the marginal...

Question 18

How do you identify consumer equilibrium in indifference curve analysis?

Accepted Answer

The answer of How do you identify consumer equilibrium in...

Quiz 7: Utility Maximization