Econ 312 Week 4 Assignment 2

ECON 312 – Intermediate Microeconomics Due date: 22-02-2100

ASSIGNMENT # 1

STUDENT’S NAME : Devon Rachae

SECTION 1

Multiple Choice Questions

1. The theory of consumer behavior is based on certain assumptions. It includes at least the assumption(s) that preferences are: a. complete. b. transitive. c. intransitive. d. both (a) and (b) are correct. e. both (a) and (c) are correct.

2. A consumer prefers market basket A to market basket B, and prefers market basket B to market basket C. Therefore, A is preferred to C. The assumption that leads to this conclusion is:

a. transitivity. b. completeness. c. all goods are good. d. diminishing MRS. e. assumption of rationality.

3. The
Andy receives zero utility unless he consumes some of at least one good. The marginal utility that he receives from the two goods is given as follows:

|Qp |MUp |Qc |MUc |
|1 |12 |1 |24 |
|2 |10 |2 |22 |
|3 |8 |3 |20 |
|4 |6 |4 |18 |
|5 |4 |5 |16 |
|6 |2 |6 |14 |
|7 |-2 |7 |12 |
|8 |-4 |8 |10 |

32. Refer to Scenario 1. What is the total utility that Andy will receive if he consumes 5 units of potato chips (Qp) and no Cola drink (Qc)?

a. 4 utils. b. 10 utils. c. 30 utils. d. 40 utils. e. none of the above.

33. Refer to Scenario 1. If the price of potato chips is $0.50 and the price of Cola is $4.00, and Andy has an unlimited income, how many units of potato chips will he consume?

a. 5 b.