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ECON-1010-D1/D2-Introduction to Microeconomics

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Use the information below to answer the following questions.

Fact 9.3.3

Jim has made his best affordable choice of muffins and coffee. He spends all of his income on 10 muffins at $1 each and 20 cups of coffee at $2 each. Muffins and coffee are ordinary goods. Now the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup.

Refer to Fact 9.3.3. When the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup, Jim
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Use the figure below to answer the following questions.

Figure 9.2.1

Which of the indifference curves in Figure 9.2.1 illustrates perfect complements?
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Use the figure below to answer the following questions.

Figure 9.3.3

Consider an initial budget line labelled RS in Figure 9.3.3. The budget line becomes RT with
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Use the table below to answer the following question.

Table 8.1.2

Table 8.1.2 gives total utilities for Jim and Sally. Which one of the following statements is true?
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At point A,

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Use the figure below to answer the following questions.

Figure 9.3.4

Original equilibrium at A, new equilibrium at B

Refer to Figure 9.3.4. Which graphs show the case where good Y is an inferior good?
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Use the figure below to answer the following questions.

Figure 9.3.3

Consider an initial budget line labelled RT in Figure 9.3.3. If the budget line becomes RS, the income effect is illustrated by the move from point
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Use the table below to answer the following question.

Table 8.2.5

Hours per monthMarginal utility

from golf

Marginal utility

from tennis

18040
26036
34030
43010
5205
6102
761

Refer to Table 8.2.5. Cindy enjoys golf and tennis. The table shows the marginal utility she gets from each activity.

Cindy has $70 a month to spend, and she can spend as much time as she likes on her leisure pursuits. The price of an hour

of golf is $10, and the price of an hour of tennis is $5.

Cindy decides to golf for 5 hours a month and play tennis for 4 hours a month.

If Cindy spends a dollar more on golf and a dollar less on tennis, her total utility ________.

If Cindy spends

a dollar less on golf and a dollar more on tennis, her total utility ________.

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