Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 6, Problem 4.1P
To determine
People’s reaction in different situation.
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Explain how changes in income (budget constraint) and prices affect consumer consumption choices. Think back to a purchase that you made recently. How did you evaluate whether or not you would be purchasing the item?
What factors commonly influence a person’s daily buying choices? Select one of these and explain how one might counteract this influence to improve purchasing behavior.
Use the following information to answer questions 1 through 8:
A student has a monthly budget of $120 to spend on either burritos, which cost $6 each, or sodas, which cost $4 each.
What is the largest number of burritos that the student could afford to purchase in one month?
What is the largest number of sodas the student could afford to purchase in one month?
Chapter 6 Solutions
Principles of Economics (12th Edition)
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Similar questions
- With diminishing marginal utility, how do consumers decide how much to consume? Students are expected to give a detailed answer to this question. You must include an explanation about what diminishing marginal utility means in your answer. Concepts such as "budget constraint", "more is better", "utility". "marginal utility", and "marginal utility per dollar spent" must be used in your answer. No graph or calculation is required in this question.arrow_forwardExplain utility and its connection to consumer behaviorarrow_forwardUsing the consumer choice theory, explain how an individual decides what combination of different products to buy?arrow_forward
- Marie has a weekly budget of $24. Pie's are $12. Magazine's are $4. What is the maximum number of pies Marie can buy in a week? What is the maximum number of magazines Marie can buy in a week?arrow_forwardDescribe several ways in which consumers are less than free in making choices about which products to purchase.arrow_forwardUsing the consumer choice theory, explain how an individual decides how to adjust her preferred combination of different products to buy when the price of just one product changes ?arrow_forward
- Question 2 A consumer is currently purchasing three pairs of jeans and five T-shirts per year. The price of jeans is $50, and shirts cost $25. At the current rate of consumption, the marginal utility of jeans is 150, and the marginal utility of shirts is 100. Based on the model of consumer choice, what should this consumer do to maximize utility? Purchase more shirts and fewer jeans. Purchase fewer shirts and more jeans. Purchase only jeans. This consumer is already maximizing utility. Purchase only shirts.arrow_forwardThink about a favorite thing you often buy or enjoy. It could be your favorite food, a favorite place to visit, a type of event, or something you make us part of a hobby. As part of this review you will create a chart ( just like the examples of total in marginal utility) showcasing the favorite item. Include the following information: How many you purchase or consume in the course of a day, week, or a month. Marginal utility of additional consumptions The total utility of all consumptions. Let’s assume that the largest utility you get from any one item is 20. Make it as interesting as you can by considering something that is important to you. Fill in the chart. arrow_forwardDo you think that you could consume less by refusingto buy some of the things you regularly buy? If so,what are three of those things? Do you think that thisis something you ought to do? Explain.arrow_forward
- Think back to a purchase that you made recently and respond to the following: How would you describe your thinking before you made that purchase? Did you have any budget constraints? If so, what were they? Would you have made the purchase if the price had increased? Why or why not?arrow_forwardWhat are the factors which determine the choice that a person makes between buying a Honda Accord or a Toyota Corolla?arrow_forwardHow does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?arrow_forward
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