ECS1501 ASSIGNMENT 6 QUESTIONS AND EXPECTED ANSWERS
The price of popcorn is $0.50 per box and the price of peanuts is $0.25 per bag. You have $10 to
... [Show More] spend on both goods. The maximum number of bags of peanuts that you can purchase is:
A. 5.
B. 20.
C. 40.
D. 10. - CORRECT ANSWERC. 40
The price of popcorn is $0.50 per box and the price of peanuts is $0.25 per bag. You have $5 to spend. You decide to purchase 8 boxes of popcorn. The maximum number of bags of peanuts that you can purchase is:
A. 8.
B. 10.
C. 12.
D. 4. - CORRECT ANSWERD. 4
Adam has a monthly income of $20 that can be spent on books (B) and pencils (P). The price of a book is $5 and the price of a pencil is $0.50. Which of the following bundles of books and pencils is UNAFFORDABLE?
A. 2 books and 20 pencils
B. 2 books and 30 pencils
C. 1 book and 20 pencils
D. 4 books and no pencils - CORRECT ANSWERB. 2 books and 30 pencils
Adam has a monthly income of $20 that can be spent on books (B) and pencils (P). The price of a book is $5 and the price of a pencil is $0.50. Which of the following bundles of books and pencils lies ON Adam's budget line?
A. 2 books and 20 pencils
B. 1 book and 40 pencils
C. 3 books and 5 pencils
D. no books and 20 pencils - CORRECT ANSWERA. 2 books and 20 pencils
Scenario: Tom's Budget Constraint
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
Reference: Ref 10-6
(Scenario: Tom's Budget Constraint) Read the scenario Tom's Budget Constraint. If we measure music downloads on the horizontal axis and movies on the vertical axis, the horizontal intercept of Tom's budget line is:
A. 50.
B. 1/2.
C. 20.
D. 100. - CORRECT ANSWERA. 50
George has a weekly income (I) of $50, which he uses to purchase doughnuts (D) and coffee (C). The price of a doughnut is $1 and the price of coffee is $2.50. Suppose George's income drops to $25 and the prices of doughnuts and coffee each fall to one-half their initial prices. One would expect George's budget line to:
A. rotate around one of the axes, but one cannot tell which one.
B. stay the same.
C. shift to the left.
D. shift to the right. - CORRECT ANSWERB. stay the same.
The price of popcorn is $0.50 per box and the price of peanuts is $0.25 per bag. You have $5 to spend. You decide to purchase 6 boxes of popcorn. The maximum number of bags of peanuts that you can purchase is:
A. 10.
B. 8.
C. 12.
D. 4. - CORRECT ANSWERB. 8.
If marginal utility is diminishing, the marginal utility curve is _____, since each additional unit of the good consumed yields _____ satisfaction.
A. upward-sloping; less
B. downward-sloping; more
C. downward-sloping; less
D. upward-sloping; more - CORRECT ANSWERC. downward-sloping; less
George has a weekly income (I) of $50, which he uses to purchase doughnuts (D) and coffee (C). If the price of a doughnut is $1 and the price of coffee is $2.50, which of the following consumption bundles lies BEYOND George's budget constraint?
A. 10C and 25D
B. 15C and 15D
C. 5C and 10D
D. 5C and 5D - CORRECT ANSWERB. 15C and 15D
A decrease in a consumer's income will do all of the following EXCEPT:
A. decrease the vertical intercept.
B. shift the budget line away from the origin.
C. reduce the individual's consumption possibilities.
D. decrease the horizontal intercept - CORRECT ANSWERB. shift the budget line away from the origin.
George has a weekly income (I) of $50, which he uses to purchase doughnuts (D) and coffee (C). If the price of a doughnut is $1 and the price of coffee is $2.50, his budget constraint can be expressed as:
A. D = 50 - 0.25C.
B. D = 50 + 2.50C.
C. D = 50 - 2.50C.
D. D = 50 - 25C. - CORRECT ANSWERC. D = 50 - 2.50C.
George has a weekly income (I) of $50, which he uses to purchase doughnuts (D) and coffee (C). The price of a doughnut is $1 and the price of coffee is $2.50. Suppose George's income increases to $100 and the prices of both doughnuts and coffee remain unchanged. Given this income change, one would expect George's budget line:
A. to shift to the left.
B. to rotate around the coffee axis point.
C. to shift to the right.
D. not to be affected. - CORRECT ANSWERC. to shift to the right.
The slope of a budget line for a consumer buying two goods is equal to the _____ of the price of the good on the _____ axis divided by the price of the good on the _____ axis.
A. pos [Show Less]