O A. the substitution effect of a price change is larger than the income effect, but a network externality is negative if the income effect is larger than the substitution effect. O B. consumption by others decreases a typical consumer's marginal utility from consuming the good, but a network externalit is negative if consumption by others increases a typical consumer's marginal utility from the good. O C. the price is lower the more paople own it, but a network externality is negative if the price is lower the fower people own it. O D. the quantity demanded is higher the more people own it, but a network externality is negative if the quantity demanded is lower the more people own it. E. it has a complement, but a network effect is negative if it has a substitute. ve an example of each. n example of a positive network externality is the demand for A. a work of art for exclusivity, and an example of a negative network externality is the demand for a work of art for status. O B. a toy to indulge a fad, and an example of a negative network externality is the demand for computers whose intrinsic value

O A. the substitution effect of a price change is larger than the income effect, but a network externality is negative if the income effect is larger than the substitution effect. O B. consumption by others decreases a typical consumer's marginal utility from consuming the good, but a network externalit is negative if consumption by others increases a typical consumer's marginal utility from the good. O C. the price is lower the more paople own it, but a network externality is negative if the price is lower the fower people own it. O D. the quantity demanded is higher the more people own it, but a network externality is negative if the quantity demanded is lower the more people own it. E. it has a complement, but a network effect is negative if it has a substitute. ve an example of each. n example of a positive network externality is the demand for A. a work of art for exclusivity, and an example of a negative network externality is the demand for a work of art for status. O B. a toy to indulge a fad, and an example of a negative network externality is the demand for computers whose intrinsic value

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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30
It shows the different combinations that the consumers can purchase from good [X] and [Y), given the income and the prices of the two goods. O a. Demand Curve O b. Budget line O c. Indifference curve O d. Supply Curve e. No correct answer
Taylor's marginal utility from watching movies and from eating out (in utils) is shown in the accompanying table. Taylor spends exactly $100 every month on these two forms of entertainment; the price of each movie is $10 and the price of each dinner is $20. Movies Marginal Utility Per Month Per Movie 1 2 3 4 Multiple Choice O 4; 6; 2 O 3:2; 6 If Taylor eats out 3 times a month, Taylor will watch O 4; 6; 1/2 60 50 20 O 3; 4; 4 5 Dinners Out Marginal Utility Per Month Per Dinner 1 2 3 4 150 140 120 100 movies, and have marginal utility per dollar of from eating out and a marginal utility per dollar of from going to the movies.
Refer to the information provided in Figure 4 below to answer the questions that follow. Kyle's demand curve 言8 Figure 4 Demand 5 7 9 Number of turkey sandwiches per week Kyle would increase his consumption of turkey sandwiches from 7 to 9 per week if their price fell from $6 to $4 on the same demand curve. This illustrates the; O a. Concept of the law of diminishing marginal utility O b. Concept of income elasticity of demand O c. Concept of consumer surplus O d. Concept of Cross-price elasticity of demand.
D2
If a good is inferior and the price increases, then the income effect will be O negative O ambiguous O positive zero
Why is it that this was wrong? Marginal utility question
Each unit of good X costs $1, and each unit of good Y costs $2. The following table contains information on Felix's u Units of Good X 1 2 3 4 5 Total Utility of Good X (Utils) 14 26 37 46 51 Units of Good Y 1 o maximize his utility, Felix should purchase 2 3 4 5 Suppose Felix spends a total of $8 on good X and good Y each week. Total Utility of Good Y (Utils) 30 56 80 of good X and Siven his budget, the maximum total utility Felix can obtain from the two goods is 100 116 of good Y. utils.
The relationship between a consumer's monthly income and monthly consumption of four products, A-D, is shown below. Income $4,000 5,000 Quantity Consumed B A с D 45 90 20 0 60 180 10 15 How much is the income elasticity of product A? Select one: O a. 0.22 (normal good) O b. 1.29 (normal and superior good) O c. 9 (superior good) O d. 3 (superior good) O e. -3 (inferior good)
A4
O O O A. 33 B. 56 C. 29 O D. 35 Units 1 2 E. 59 345W N 6 7 Marginal Utility 10 0053 O 8 Toffee (bars) 1 Total Utility 10 18 23 26 27 27 27 Refer to the table above. If this consumer purchases 3 toffee bars and 5 bags of cashews per week, his/her total utility will be Cashews (bags) Marginal Utility 12 10 7 5 2 1 0 Total Utility 12 22 29 34 36 37 27
26. Danny has $12 to spend on two goods: pies and soda. The price of a pie is $4, and the price of a can of soda is $2. To maximize his utility, Danny buys A) the combination that gives him equal total utility from pies and soda B) 2 pies and 2 cans of soda C) oniy sodas because they are iess expensive D) the combination that gives him the same marginai utility per doillar spent on pies as on soda