Suppose you have drawn a consumer's budget line for food and clothing with food on the horizontal axis and clothing on the vertical axis. If the price of food increases, the budget line becomes atter. the budget line shifts outward in a parallel fashion. the budget line becomes steeper. POP\"? the budget line shifts inward in a parallel fashion. An indifference curve shows all combinations of two goods that '5'} A. provide the consumer with the same level of satisfaction. ("13' B. the consumer would choose at different levels of income. '5'} C. the consumer would choose at different prices. {1} D. cost the same amount of money. Bill currently uses his entire budget to purchase 5 cans of Pepsi and 3 hamburgers per week. The price of Pepsi is $1 per can, the price of a hamburger is $2, Bill's marginal utility from Pepsi is 4, and his marginal utility from hamburgers is 6. Bill could increase his utility by if? A. increasing Pepsi consumption and reducing hamburger consumption. '1} B. maintaining his current consumption choices. '5'} C. increasing hamburger consumption and reducing Pepsi consumption. '1} D. We do not have enough information to answer this question. Which one of the following would n_ot occur if the market price was above the marketclearing price? i") A. There would be a surplus. i") B. Consumers would bid up the price. '3") C. Producers would begin to lower their prices to sell off excess inventory. '5'.) D. Producers would want to produce and sell more than consumers would want to buy. Suppose the demand function (D) for golf clubs is: Q = 150 - 0.50P, where P is the price paid by consumers in dollars per club and Q is the quantity demanded in thousands. Suppose the supply curve (S) for golf clubs is estimated to be: 0 =2.00P. Calculate the equilibrium price for golf clubs and the equilibrium quantity sold. The equilibrium price is $|:| per club (Enter your response as an integerz), and the equilibrium quantity is D thousand clubs (Enter your response as an integer.) Suppose instead that golf club producers agree to charge a price of $80 per club. This would result in a |:| of El thousand clubs (Enter your response as an integer.) - surplus shonage An individual consumes only two goods, X and Y. Which of the following expressions represents the utility-maximizing market basket? O A. PX/Pv = money income. O B. MRS = money income. O C. MRS is at a maximum. O D. MRSxy = Px /Py. O E. All of the above.After a good falls in price, consumers will tend to buy more of the good that has become cheaper and less of those goods that are now relatively more expensive. This fact is called {1:} A. the income effect. a") B. the substitution effect. a") C. the wealth effect. a") D. the price effect. Cary has the following utility function: U(X, Y) = 10X2Y where X is her consumption of Blu-ray disks with a price of $20 and Y is her consumption of DVDs with a price of $10. She has $600 with which to spend on the two goods. Determine the number of Blu-ray disks and DVDs that will maximize Cary's utility. Cary maximizes utility when she consumes Blu-ray disks and DVDS. (Enter your responses using integers.)The incomeconsumption curve {"1} A. illustrates the utility-maximizing combinations of goods associated with every income level. ("2) B. is another name for the income-demand curve. {:2} C. shows the utilitymaximizing quantity of some good (on the horizontal axis) as a function of income (on the vertical axis). D. illustrates the combinations of incomes needed with various levels of consumption of a good. When demand is elastic, an increase in price causes the seller's total revenue to increase. remain the same. decrease. .6655} fall to zero. For most industries, supply is |:| in the short run than in the long run. - equally elastic less elastic more elastic After a good falls in price, consumers are better off because they can buy the same amount of the good for less money, and thus have money left over for additional purchases. This fact is called {I} A. the income effect. B. the substitution effect. C. the wealth effect. D. the price effect. Which one of the following would n_ot cause the demand for CocaCola to shift? A new study finds that drinking Coca-Cola causes stomach cancer. Coca-Cola increases its advertising expenditures by 20 percent. The price of PepsiCola increases. 99?\"? The cost of producing Coca-Cola increases. An Engel curve shows combinations of (2} A. income and prices. {:2 B. two goods for different levels of income. {2} C. two goods for different levels of prices. '7'} D. income and the quantity consumed of one good. Income elasticity measures the responsiveness of consumer demand to changes in income. If the income elasticity coefficient is positive, it means the good is a (normal/inferior) good. If the income elasticity coefficient is negative, this means the good is a (normal/inferior) good.The price elasticity of supply is 0.5, and price increases by 2 percent. As a result, the quantity supplied will increase by D percent. (Enter your response as a real number rounded to one decimal place, and do not use a percentage sign.) Marginal utility measures {:2- A. the slope of the budget line. '5'} B. the marginal rate of substitution. C. the slope of the indifference curve. D. the additional satisfaction from consuming one more unit of a good. E none of the above. Steel and aluminum are substitutes. If the price of steel increases, other things remaining the same, we would expect the price of aluminum to and the equilibrium quantity of aluminum to increase decrease remain the same The horizontal summation of the demands of each consumer at different price levels is called (:2:- A. speculative demand. B. the price elasticity of market demand. (:2- 0. consumer surplus. D. the market demand curve. The coefficient of price elasticity of supply will be positive because O A. the slope of the supply curve is positive O B. the responsiveness of consumers to changes in input price is positive O C. an increase in the price of the good causes a decrease in the quantity supplied of the good O D. an increase in the price of the good causes the quantity supplied to increase O E. A and D