Question 1

If a consumer has $30 to spend on apples and bananas,where on the apple axis would the consumer's budget line intersect if the price of apples is $3 a pound?

Accepted Answer

If the consumer has $30 to spend and the price of apples is $3 a pound, then they can purchase a maximum of 10 pounds of apples with their entire budget. This is because $3 x 10 = $30. Therefore, the budget line would intersect at 10 pounds on the apple axis.

Question 2

A consumption point inside the budget line

Accepted Answer

A consumption point inside the budget line indicates that the consumer can afford the combination of goods but chooses not to spend all of their income, leaving some unspent.

Question 3

-The figure above shows Sarah's budget line.Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.Sarah will be at what point on her budget line if she spends $200 per week on sushi?

Accepted Answer

If Sarah spends $200 on sushi, she buys 200 pieces of sushi. With $300 left, she can buy 30 rose bushes ($300/$10 per bush). Point c represents this combination.

Question 4

Timmy makes $100 per week as a taxidermist.He spends all this income to buy pizza and hair gel.The price of a pizza is $10 and the price of a bottle of hair gel is $4.If Timmy buys 5 bottles of hair gel,then he buys ________ pizzas.

Accepted Answer

Timmy spends $20 on 5 bottles of hair gel ($4 each), leaving him with $80. At $10 per pizza, he can buy 8 pizzas.

Question 5

In order to draw Lucky's budget line,we need to know

Accepted Answer

A budget line represents the combinations of two goods that a consumer can purchase with their available budget. Therefore, in order to draw Lucky's budget line, we need to know both his budget and the prices of the goods he consumes.

Question 6

Katie has $15.She likes M&M candies and Hershey's white chocolate bars.M&M candies are $1.50 a pack and (the large)Hershey bars are $3.00 each.Katie can choose to buy

Accepted Answer

Option A: 4 Hershey bars at $3 each = $12, and 2 packs of M&Ms at $1.50 each = $3. Total = $15.Option B: 2 Hershey bars at $3 each = $6, and 6 packs of M&Ms at $1.50 each = $9. Total = $15.Option C: 5 Hershey bars at $3 each = $15, leaving no money for M&Ms, so it's incorrect.Options A and B are both correct ways for Katie to spend exactly $15 on her preferred candies.

Question 7

The budget line is the boundary between

Accepted Answer

The budget line represents the different combinations of two goods that a consumer can purchase with a given budget (or income). Therefore, it separates the affordable (on or below the budget line) from the unaffordable (above the budget line) consumption combinations.

Question 8

-Susan can watch movies or attend plays.The table above gives combinations of movies and plays that are on her budget line.If the price of a movie is $10,then her budget for movies and plays is

Accepted Answer

If the price of a movie is $10, and the budget line shows combinations of movies and plays, the total budget can be calculated by multiplying the maximum number of movies she can watch (6) by the price per movie ($10), which equals $60.

Question 9

Reb earns $1,000 per week as a fishing guide in Texas.With this money he buys fishing lures and steaks.Lures cost $5 each,steaks cost $10 each.With this level of income,which consumption points are not possible?

Accepted Answer

B) 100 lures, 60 steaks is not possible because 100 lures at $5 each cost $500, and 60 steaks at $10 each cost $600, totaling $1100, which exceeds Reb's weekly income of $1000.

Question 10

Timmy makes $100 per week as a taxidermist.He spends all this income to buy pizza and hair gel.The price of a pizza is $10 and the price of a bottle of hair gel is $4.If Timmy buys 6 pizzas per week,how many bottles of gel can he purchase?

Accepted Answer

Timmy spends $60 on pizza each week, leaving him with $40 to spend on hair gel. Since each bottle of hair gel costs $4, he can purchase 10 bottles of gel per week.

Question 11

Reb earns $1,000 per week as a fishing guide in Texas.With this money he buys fishing lures and steaks.Lures cost $5 each,steaks cost $10 each.If Reb purchases 124 lures per week,how many steaks can he buy?

Accepted Answer

Since Reb earns $1,000 per week, his weekly expenses on lures would be:
$5/lure * 124 lures = $620
This leaves him with $1,000 - $620 = $380 to spend on steaks.
The number of steaks he can buy is:
$380 ÷ $10/steak = 38 steaks

Question 12

Which of the following is shown by a budget line?
i.The combinations of goods a person can afford
ii.The production possibilities for a person
iii.The combinations of goods a person cannot afford

Accepted Answer

The answer of Which of the following is shown by...

Question 13

-The figure above shows Sarah's budget line.Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.Sarah will be at what point on her budget line if she spends $500 per week on rose bushes?

Accepted Answer

Sarah will be at point a on her budget line if she spends $500 per week on rose bushes. This is because point a represents the point where Sarah's entire budget is spent on rose bushes.

Question 14

Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.If Sarah spends $170 per week on sushi,the maximum quantity of rose bushes can she buy each week is ________ bushes.

Accepted Answer

Sarah earns $500 per week and spends $170 on sushi, so she has $500 - $170 = $330 left to spend on rose bushes. Each rose bush costs $10, so the maximum quantity of rose bushes she can buy is $330 / $10 = 33 bushes.

Question 15

Which of the following statements is correct?

Accepted Answer

The slope of the budget line represents the opportunity cost of consuming one good in terms of the quantity of the other good that must be foregone.

Answer: B 
 The budget line illustrates the different combinations of two goods that a consumer can purchase given their budget constraint, and thus reflects the trade-off between consuming the two goods.

Answer: E 
 None of the statements are completely correct. Statement C is particularly incorrect, as the slope of the budget line indicates the trade-off between the two goods. Statement D is also incorrect, as an increase in budget would cause the budget line to shift outward, not inward.

Question 16

A budget line

Accepted Answer

The budget line shows the combination of goods and services that can be purchased with a given budget, thus indicating the limits to what can be consumed. The slope of the budget line is equal to the relative price of the two goods represented on the axes. Finally, the budget line rotates or shifts only when the consumer's budget changes. Therefore, both A and B are correct, leading to the correct answer of E.

Question 17

The point where the budget line intersects the y-axis represents a combination of goods that contains

Accepted Answer

The point where the budget line intersects the y-axis represents a combination of goods where only the good measured on the y-axis is consumed and none of the good measured on the x-axis is consumed. This is because the y-axis measures the quantity of one good and the x-axis measures the quantity of the other good. Therefore, the point where the budget line intersects the y-axis represents a combination of goods where the quantity of the good measured on the x-axis is zero.

Question 18

Which of the following statements is correct?

Accepted Answer

A budget line shows the various combinations of goods and services that a consumer can purchase with a limited budget. It is a graphical representation of the budget constraint that a consumer faces, which shows the maximum amount of one good that can be purchased for each possible level of spending on the other goods. Therefore, it indicates the limits to what a consumer can buy with a given budget. Option A is incorrect because not all consumers have the ability to buy everything they desire due to budget constraints. Option C is incorrect because a budget line does not necessarily show the goods with the highest marginal utilities as the marginal utility varies for each individual consumer. Option D is incorrect because prices affect everyone, regardless of their income level. Option E is incorrect because a budget line changes not only due to changes in the budget but also due to changes in prices of goods and services.

Question 19

A budget line shows the

Accepted Answer

A budget line shows the combination of quantities of two goods that a buyer can purchase with a given level of income and the prevailing prices of the goods. It represents the limits of the consumer's choices in terms of the combinations of goods that are affordable given their income and the prices they face.

Question 20

Suppose a consumer has $100 to spend on two goods,shoes and shirts.If the price of a pair of shoes is $20 per pair and the price of a shirt is $15 each,which of the following combinations is unaffordable to the consumer?

Accepted Answer

The total cost of 0 pairs of shoes and 7 shirts is $105 ($15 * 7), which exceeds the consumer's budget of $100.

Quiz 13: Consumer Choice and Demand

If a consumer has $30 to spend on apples and bananas,where on the apple axis would the consumer's budget line intersect if the price of apples is $3 a pound?

A consumption point inside the budget line

-The figure above shows Sarah's budget line.Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.Sarah will be at what point on her budget line if she spends $200 per week on sushi?

Timmy makes $100 per week as a taxidermist.He spends all this income to buy pizza and hair gel.The price of a pizza is $10 and the price of a bottle of hair gel is $4.If Timmy buys 5 bottles of hair gel,then he buys ________ pizzas.

In order to draw Lucky's budget line,we need to know

Katie has $15.She likes M&M candies and Hershey's white chocolate bars.M&M candies are $1.50 a pack and (the large) Hershey bars are $3.00 each.Katie can choose to buy

The budget line is the boundary between

-Susan can watch movies or attend plays.The table above gives combinations of movies and plays that are on her budget line.If the price of a movie is $10,then her budget for movies and plays is

Reb earns $1,000 per week as a fishing guide in Texas.With this money he buys fishing lures and steaks.Lures cost $5 each,steaks cost $10 each.With this level of income,which consumption points are not possible?

Timmy makes $100 per week as a taxidermist.He spends all this income to buy pizza and hair gel.The price of a pizza is $10 and the price of a bottle of hair gel is $4.If Timmy buys 6 pizzas per week,how many bottles of gel can he purchase?

Reb earns $1,000 per week as a fishing guide in Texas.With this money he buys fishing lures and steaks.Lures cost $5 each,steaks cost $10 each.If Reb purchases 124 lures per week,how many steaks can he buy?

Which of the following is shown by a budget line? i.The combinations of goods a person can afford ii.The production possibilities for a person iii.The combinations of goods a person cannot afford

Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.If Sarah spends $170 per week on sushi,the maximum quantity of rose bushes can she buy each week is ________ bushes.

Which of the following statements is correct?

A budget line

The point where the budget line intersects the y-axis represents a combination of goods that contains

Which of the following statements is correct?

A budget line shows the

Suppose a consumer has $100 to spend on two goods,shoes and shirts.If the price of a pair of shoes is $20 per pair and the price of a shirt is $15 each,which of the following combinations is unaffordable to the consumer?