1. Loveflower only consumes two goods - carrots and tofu, and she is currently buying both from her local food coop where she pays $2 for a bag of carots and $6 for a block of tofu. Loveflower consumes 2 bags of carrots and 4 blocks of tofu, and her MU from carrots is 30 and her MU from tofu is 60. Which of the following statements is true? a. Loveflower is curently minimizing her utiliy. b. Loveflower can increase her utility by eating more carrots and less tofu. c. Loveflower can increase her utility by eating more tofu and fewer carots. d. Loveflower can inerease her utility by eating less tofu and fewer carrots. e. Loveflower cannot increase her utility. 2. Suppose that the local goverament wants to encourage more low-income students to leam mathematics by increasing access to cakulators. To make cakulators more affordable, the government institutes a price ceiling on calculators below the current market price. If the market for calculators is perfectly competitive, what is the result? a. There will be deadweight loss, but more students will buy calculators. b. There will be improvements in both equity and economic efficieney in the market for caleculators. c. More calculators will be available, but there will be a decrease in economic efficiency. d. There will be an increase in affordability with no change in the quantity of calculator sales. c. Fewer calculators will be availabke, and there will be a decrease in economic efficiency. 3. Harriet can consume goods X and Y. The graph below represents one of her indifference curves (IC). All her ICs are similar to the one in the graph, and prices are p, = 4 and p, = 4. If the Harriet's income is $80, her optimal choice is to consume IC a. X= 8 b. X - 11 c. X-4 d. X- 6 c. X = 12 4. Joe likes to eat avocado toast. As avocados become cheaper Joe buys more bread. Based on this information, we can conclude that, for Joe, bread and avocados are a. Normal b. Efficient c. Complements d. Inferior S. Substitutes 2.
1. Loveflower only consumes two goods - carrots and tofu, and she is currently buying both from her local food coop where she pays $2 for a bag of carots and $6 for a block of tofu. Loveflower consumes 2 bags of carrots and 4 blocks of tofu, and her MU from carrots is 30 and her MU from tofu is 60. Which of the following statements is true? a. Loveflower is curently minimizing her utiliy. b. Loveflower can increase her utility by eating more carrots and less tofu. c. Loveflower can increase her utility by eating more tofu and fewer carots. d. Loveflower can inerease her utility by eating less tofu and fewer carrots. e. Loveflower cannot increase her utility. 2. Suppose that the local goverament wants to encourage more low-income students to leam mathematics by increasing access to cakulators. To make cakulators more affordable, the government institutes a price ceiling on calculators below the current market price. If the market for calculators is perfectly competitive, what is the result? a. There will be deadweight loss, but more students will buy calculators. b. There will be improvements in both equity and economic efficieney in the market for caleculators. c. More calculators will be available, but there will be a decrease in economic efficiency. d. There will be an increase in affordability with no change in the quantity of calculator sales. c. Fewer calculators will be availabke, and there will be a decrease in economic efficiency. 3. Harriet can consume goods X and Y. The graph below represents one of her indifference curves (IC). All her ICs are similar to the one in the graph, and prices are p, = 4 and p, = 4. If the Harriet's income is $80, her optimal choice is to consume IC a. X= 8 b. X - 11 c. X-4 d. X- 6 c. X = 12 4. Joe likes to eat avocado toast. As avocados become cheaper Joe buys more bread. Based on this information, we can conclude that, for Joe, bread and avocados are a. Normal b. Efficient c. Complements d. Inferior S. Substitutes 2.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter6: Consumer Choices
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Transcribed Image Text:1. Loveflower only consumes two goods - carrots and tofu, and she is currently buying both from her local
food coop where she pays $2 for a bag of carrots and $6 for a block of tofu. Loveflower consumes 2 bags of
carrots and 4 blocks of tofu, and her MU from carrots is 30 and her MU from tofu is 60. Which of the
following statements is true?
a. Loveflower is curently minimizing her utility.
b. Loveflower can increase her utility by eating more carrots and less tofu.
c. Loveflower can increase her utility by eating more tofu and fewer carrots.
d. Loveflower can inerease her utility by eating less tofu and fewer carrots.
e. Loveflower cannot increase her utility.
2. Suppose that the local government wants to encourage more low-income students to leam mathematics by
increasing access to cakulators. To make calculators more affordable, the government institutes a price
ceiling on calculators helow the current market price. If the market for calculators is perfectly competitive,
what is the result?
a. There will be deadweight loss, but more students will buy calculators.
b. There will be improvements in both equity and economie efficiency in the market for calculators.
c. More calculators will be available, but there will be a decrease in economic efficiency.
d. There will be an increase in affordability with no change in the quantity of calculator sales.
c. Fewer calculators will be available, and there will be a decrease in economic efficiency.
3. Harriet can consume goods X and Y. The graph below represents one of her indifference curves (IC). All her
ICs are similar to the one in the graph, and prices are p, = 4 and py = 4. If the Harriet's income is $80, her
optimal choice is to consume
IC
3
a. X = 8
b. X = 11
с. Х-4
d. X = 6
e. X = 12
4. Joe likes to eat avocado toast. As avocados become cheaper Joe buys more bread. Based on this
information, we can conclude that, for Joe, bread and avocados are
a. Normal
b. Efficient
c. Complements
d. Inferior
e. Substitutes
2.
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