The figure to the right represents the demand for ice cream cones. Which of the following statements is true? OA. Points a and b may not necessarily be the utility -maximizing quantities of ice cream cones at two different prices because we have no information on the consumer's budget or the price of other goods. B. Points a and b are the utility - maximizing quantities of ice cream cones at two different prices of ice cream. OC. Points a and b are derived independently of the utility - maximizing model. OD. Point a could be a utility - maximizing choice if the price is $3 but point b may not be because we have no information on the marginal utility per dollar when price changes. Price 2 1 0 3 b 4 Demand Quantit

The figure to the right represents the demand for ice cream cones. Which of the following statements is true? OA. Points a and b may not necessarily be the utility -maximizing quantities of ice cream cones at two different prices because we have no information on the consumer's budget or the price of other goods. B. Points a and b are the utility - maximizing quantities of ice cream cones at two different prices of ice cream. OC. Points a and b are derived independently of the utility - maximizing model. OD. Point a could be a utility - maximizing choice if the price is $3 but point b may not be because we have no information on the marginal utility per dollar when price changes. Price 2 1 0 3 b 4 Demand Quantit

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6. Part a and Part B
The figure below shows a consumer maximizing utility at two different prices (the left panel) and the consumer's demand for good X at the same two prices of good X (the right panel). The price of good Yis $4.50. The equation of the budget line passing through point r is R B 60 48 Demand for X Q. 24 18 24 Quantity of X Quantity demanded of X Multiple Choice Y-80 - (10/3)X Y 90 - (10/3)x Y=80 -0.3X Y= 90 - 0.3X Quantity of Y Price of X
Suppose that Paolo and Sharon are the only consumers of ice cream cones in a particular market. The following table shows their monthly demand schedules: Price Paolo’s Quantity Demanded Sharon’s Quantity Demanded (Dollars per cone) (Cones) (Cones) 1 8 16 2 5 12 3 3 8 4 1 6 5 0 4 On the following graph, plot Paolo’s demand for ice cream cones using the green points (triangle symbol). Next, plot Sharon’s demand for ice cream cones using the purple points (diamond symbol). Finally, plot the market demand for ice cream cones using the blue points (circle symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right.
Mario and Chris are the only two consumers in a particular market for train tickets. The following table displays the relationship between the price of bus tickets for each consumer and quantity of train tickets demanded per week when the price of train tickets is $4.00 each. $2.00 $3.00 $4.00 $5.00 Price of bus tickets Mario's demand for train tickets 8 6. 4 2 Chris' demand for train tickets 1 2 3 a) Suppose the price of bus tickets is $4. The market demand of train tickets per day is
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Question 3
4. Suppose that a consumer with the utility function U =X0.25 Y0.75 choses a bundle where X=5 and Y=10. If the prices of the two goods are Px= $1, and Py = $3. Calculate marginal utility per dollar spent on each good. Can this consumer increase utility without increasing expenditure and if so how?