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Jeffrey spends all of his income on warm-up suits and running shoes, and the price of a warm-up suit is four times the price per pair of shoes. Then, in order to maximize total utility, Jeffrey should

a. buy four times as many warm-up suits as pairs of running shoes

b. buy four times as many pairs of running shoes as warm-up suits

c. divide his income equally between warm-up suits and running shoes

d. buy both items until the marginal utility of a warm-up suit is four times the marginal utility of a pair of running shoes

e. buy both items until the marginal utility of a pair of running shoes is four times the marginal utility of a warm-up suit

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Joshua Stredder
Joshua StredderLv10
28 Sep 2019
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Related questions

Let A be a builder, B a shoemaker, C a house, D a shoe. The builder, then, must get from the shoemaker the latter's work, and must himself give him in return his own. If then, first there is proportionate equality of goods, and then reciprocal action takes place, the result we mention will be effected. If not, the bargain is not equal, and does not hold; for there is nothing to prevent the work of the one being better than that of the other; they must therefore be equated. (And this is true of the other arts also; for they would have been destroyed in what the patient suffered had not been just what the agent did, and of the same amount and kind.) For it is not two doctors that associate for exchange, but a doctor and a farmer, or in general people who are different and unequal; but these must be equated. This is why all things that are exchanged must be somehow comparable. It is for this end that money has been introduced, and it becomes in a sense an intermediate; for it measures all things, and therefore the excess and the defect-how many shoes are equal to a house or to a given amount of food. The number of shoes exchanged for a house (or for a given amount of food) must therefore correspond to the ratio of builder to the shoemaker. For if this is not so, there will be no exchange and no intercourse. And this proportion will not be affected unless the goods are somehow equal. All goods must therefore be measured by some one thing, as we said before. (Aristotle Nicomachean Ethics Book V. What two functions of money is Aristotle describing in this passage? [Select two answers]. Unit of Account, Store of Value, Medium of Exchange, Liquidity. Initially, 20,000 pairs of shoes can buy one house. Additionally, the price of one pair of shoes $50. What is the price of one house? $500,000, $1,000,000, $10,000,000, $5,000,000. Suppose the central bank increases the money supply. After the action by the central bank, the price of a pair of shoes is now $75. What is the price of one house? $1,500,000, $3,000,000, $15,000,000, Not enough information. Based on your answers above, what is the theory that explains the relationship between the price of a pair of shoes and the price of a house?

13.

Suppose Katie has the option to buy a shirt or buy a pair of pants.Suppose Katie purchases a shirt. Consider the followingstatements:

I: Katie’s total utility increases
II: Katie’s marginal utility of shirts increases
III: Katie’s marginal utility of shirts decreases
IV: Katie’s marginal utility of pants increases
V: Katie’s marginal utility of pants decreases
VI: Katie’s total utility decrease

Choose the best answer below.
A) Only statements I, III, and V are true
B) Only statements III and VI are true
C) Only statements III and V are true
D) Only statements I and II are true
E) Only statements I, II, and IV are true
F) Only statements I and III are true
G) Only statements I, III, and IV are true
14.
Suppose Travis can buy a burger for $2 and can buy a soft drink for$1. He has spent all of his money. Based on what he consumed, hismarginal utility of burgers is 12, and his marginal utility of softdrinks is 4. Did Travis spend his money in a utility-maximizingway?
A) Yes – Travis spent his money optimally.
B) No – Travis should go now go purchase more burgers.
C) No – Travis should have bought more soft drinks and lessburgers
D) No – Travis should have bought more burgers and less softdrinks
15.

Suppose Dave is at the arcade. He can play 3 possible games: MarioPinball, Elk Hunt, and Street Fighter. All games are priced at $1per play. The table below shows the marginal utility of playingeach game. Suppose Dave’s mom gave him $4 to spend. If Dave spendsall of his money $1 at a time, in what order will he play games atthe arcade?


A) Street Fighter, Mario Pinball, Elk Hunt, Street Fighter
B) Street Fighter, Street Fighter, Mario Pinball, Elk Hunt
C) Mario Pinball, Street Fighter, Elk Hunt, Elk Hunt
D) Elk Hunt, Mario Pinball, Street Fighter, Mario Pinball
16.
Suppose now that upon entering the arcade, Dave finds the strongestkid in the room, beats him up, and steals $3 from him. Thus, Davenow has $7. If Dave spends all $7 optimally, what will his totalutility be after playing his last game? (Assume Dave gets noutility from the act of beating up the kid and stealing hismoney).
A) Total Utility = 20
B) Total Utility = 261
C) Total Utility = 241
D) Total Utility = 243

Q1. If the price of a complement increases, all else equal, ----------------------------

Q2. Which of the following would lead to an INCREASE in the demand for golf balls?

A) An decrease in the price of golf balls.

B) An increase in the price of golf clubs.

C) A decrease in the cost of producing golf balls.

D) An increase in average household income when golf balls are a normal good.

E) none of the above

Q3. If input prices increase, all else equal, --------------------------------

Q4. Which of the following would decrease the supply of wheat?

A) A decrease in the price of pesticides. B) An increase in the demand for wheat. C) A rise in the price of wheat. D) An increase in the price of corn. E) none of the above

Q5. When Sonoma Vineyards increases the price of its Chardonnay from $15 per bottle to $20 per bottle, the result is a decrease in…

A) the quantity of this wine demanded B) the quantity of this wine supplied.

C) the demand for this wine. D) the supply of this wine.

Q6. Which of the following will cause a change in quantity supplied?

A) Technological change. B) A change in input prices. C) A change in the market price of the good.

D) A change in the number of firms in the market. E) all of the above.

Q7. In which of the following cases will the effect on equilibrium output be indeterminate (i.e., depend on the magnitudes of the shifts in supply and demand)?

A) Demand decreases and supply decreases. B) Demand remains constant and supply increases.

C) Demand decreases and supply increases. D) Demand increases and supply increases. E) none of the above.

Use the following demand and supply functions to answer the next three questions.

Demand: QD= 600 - 30P Supply: QS = -300 + 120P

Q8. Equilibrium price and output are

A) P = $2 and Q = 540. B) P = $10 and Q = 300. C) P = $6 and Q = 420.

D) P = $3.33 and Q = 500. E) none of the above

Q9. If the price is currently $8, there is a --------------------------

A) surplus of 360 units. B) shortage of 360 units. C) surplus of 300 units.

D) shortage of 660 units. E) none of the above

Q10. If the price is currently $4, there is a

A) shortage of 300 units. B) shortage of 480 units. C) surplus of 180 units.

D) shortage of 180 units. E) none of the above

Q.11 The Free Indeed Company manufactures ladies’ shoes that are sold through discount houses. The shoes are sold for $20 each pair; the fixed costs are $110,000 for up to 30,000 pairs of shoes; variable costs are $13 per pair of shoes. What is the firm’s breakeven point in units sold?

a) 30,000 pairs of shoes b) 15,714 pairs of shoes c) 8,462 pairs of shoes d) 5,500 pairs of shoes

Q12. If the demand curve for British pounds shifts to the right, ---------------

a) the dollar price of British pounds will increase

b) the dollar price of British pounds will decrease

c) the exchange rate between dollars and pounds will be out of equilibrium

d) the pound will fall in value against the dollar

Q13. Judgments about "what ought to be" in economic matters. Can't be proven false, based on judgments

a. Macroeconomics b. Positive economics c. Normative economics d. Microeconomics

Q14. Which of the following statements is normative in nature?

A) That economics mid-term was tough!

B) Professor of economics put too many multiple-choice questions.

C) Neither of these statements is normative in nature

D) Both A & B of these statements are normative in nature

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