8

6

2

4 5 8 10

AGEC 105Capps AQ#2 FALL 2011

Name: ________________________________ UIN # ________________ Section # _____________

(1 pt) 1. The mathematical representation of the satisfaction a consumer derives from a bundle of goods is called the __________________________________.

(2 pts) 2. Given the information below, what is the marginal utility associated with drinking coffee?Show all work.

Total Utility Quantity of Hamburgers48 288 10

3.

(1 pt) (a) The graph deals with ________________________ curves.

(1 pt) (b) Among points A, B, C, and D, which combination of wings and hamburgers yields the highest level of satisfaction? ________________ Wings _______________ Hamburgers

(1pt) (c) Among points A, B, C, and D, which combination of wings and hamburgers yields the lowest level of satisfaction? ________________ Wings _______________ Hamburgers

(2 pts) (d) Given points A and B, how many wings is this consumer willing to give up in order to get one more hamburger? Show all work!

(1 pt) (e) What is the technical name of the situation described in (d)?______________________

1

QHamburgers

QTacos

100

100 150

150

QPork

QBeef

100

120 140

AGEC 105Capps AQ#2 FALL 2011

(1 pt) 4. The shift in the budget line in the graph to the right is due to: (Circle the correct answer.)

(a) an increase in the price of hamburgers.(b) an increase in the price of tacos.(c) a rise in income(d) a fall in income.

.

(1 pt) 5. The clockwise rotation of this diagram may be best explained as: (Circle the correct answer.)

(a) The price of pork rose.(b) The price of beef rose.(c) Total consumer income allotted to

beef and pork fell.(d) The price of beef fell.

(2 pts) 6. Illustrate a demand curve for bananas. Be sure to label your axes.

2

AGEC 105Capps AQ#2 FALL 2011

7. Mr. Valentine wishes to buy steak and pork. Mr. Valentine has a budget of $20.

(1 pt) (a) At point A, the consumer is said to be in ____________________________.

(4 pts) (b) Fill in the entries in the table below in conjunction with point A.

Quantity of Steak (lbs)

Quantity of Pork(lbs)

Price of Steak($/lb)

Price of Pork($/lb)

(1 pt) (c) The marginal rate of substitution at point A is equal to __________________.

(1 pt) 8. Assume that for a given consumer, the marginal utility of cheap food is 100 and the price of cheap food is $40. Also, assume that the marginal utility of environmental quality is 200 and the price of environmental quality is $100. This consumer: (Circle the correct answer.)

(a) is in equilibrium.(b) should buy more cheap food.(c) should buy more environmental quality.(d) can’t tell; insufficient information given to answer this question.

(1 pt) 9. The demand curve for a product shifts to the right. Which of the following statements is (are) a plausible explanation(s) for this situation? (Circle the correct answer.)

(a) A successful advertising campaign was launched by the manufacturer of the product.(b) The price of a substitute product increased.(c) Income rose and the product is a normal good.(d) All of the above.

3

• A

Steak (lbs)

Pork (lbs)

4

2

5 10

• A

Steak (lbs)

Pork (lbs)

4

2

5 10

AGEC 105Capps AQ#2 FALL 2011(1 pt) 10. In question 9, what is the technical name of this rightward shift in demand?

________________________________________

(1 pt) 11. Individual demand schedules for three customers from the local H-E-B store in the purchase of ice cream are given below:

What is the market demand for ice cream at a price of $1.75 assuming that the only consumersin this market are customers A, B, and C? That is how many quarts/week are sold when the price is $1.75 per quart?

(2pts) 12. Consider the following diagram, which deals with shrimp from Galveston Bay.

(1pt) (a) This diagram is technically called a/an _____________________ curve.

(1pt) (b) From this diagram, we can conclude that shrimp from Galveston Bay is a/an_________________ good.

4

Sign the Aggie Pledge:An Aggie does not lie, cheat or steal

or tolerate those who do.

_______________________________________ ________________Signature Date

AGEC 105Capps AQ#2 FALL 2011

5