Microeconomics Study Set 46

(Figure: Good Y and Good X VII) At BC₁, the consumer has $40 of income to spend on goods X and Y. What changed the budget constraint from BC₁ to BC₂?

(Figure: Hamburger Meat and Canned Tuna I) Hamburger meat is a(n) _____ good and canned tuna is a(n) _____ good.

Suppose that there are two goods, X and Y. The utility function is U = XY + 2Y. The price of X is P, and the price of Y is $5. Income is $60. The demand for X as a function of P is X = ____.

(Figure: Billiards and Water Park Tickets I) Based on the consumer's indifference curves and budget constraints, which of the following demand curves reflects the consumer's demand for water park tickets? Assume the consumer has income of $100.

There are 10 consumers in the market, each with the demand curve Q = 100 - 0.5P. In a graph of the market demand curve, its slope (ΔP/ΔQ) would equal:

(Figure: Beef Jerky and Scallops I) According to the figure, the substitution effect associated with the increase in the price of scallops is a movement from ____ to _____ scallops.

Suppose that there are two goods, X and Y. The utility function is The price of Y is $2 per unit and the price of X is P. The Hicksian demand curve for X for utility equal to 2,000 units is X = ____.

(Figure: Quantity of Goods Y and X II) Because of the income effect associated with the decrease in the price of good X, the quantity of good X purchased:

(Figure: Hourly Wage and Hours of Labor I) Which of the following statements is (are) TRUE? I. At a wage above $18, the income effect dominates the substitution effect. II) At a wage below $18, the substitution effect dominates the income effect. III) At a wage above $18, the substitution effect dominates the income effect. IV) At a wage below $18, the income effect dominates the substitution effect.

Which of the following statements about Marshallian demand curves is FALSE?

In 2010, the average household spent $1,178 on telephone services and $333 on nonalcoholic drinks. From this information, we can conclude that:

(Figure: Good Y and Good X V) In panel (a), the price of good X is $1.50 per unit and the price of good Y is $3 per unit. In panel (b), the consumer's income increased from $400 to $480. Panel (a) Panel (b) Using panel (b), good X is a (an) _____ good.

(Figure: Market for DS Video Games I) Assume that Sofia and Elena comprise the entire market of buyers. Elena's inverse demand function is ____.

(Figure: Good Y and Good X III) The price of good Y _____, increasing the consumption of both good Y and good X, which are _____.

To derive the Engel curve, which shows the relationship between the quantity of a good consumed and a consumer's income, all else being equal, solve the consumer's:

(Figure: Dog Treats and Milk I) When the price of milk drops, the substitution effect _____ the quantity of milk consumed from _____.

(Figure: Quantity of Goods Y and X I) The substitution effect will be largest for indifference curve:

For the Cobb-Douglas utility function:

For the special case of a Giffen good, the partial derivative of quantity demanded with respect to price is _____, and the partial derivative of quantity demanded with respect to income is _____.

(Figure: Quantity of Good Y and X IV) The price of good Y decreased from $20 to $10. The cross-price elasticity of demand for good X with respect to good Y is ____.