CHAPTER 5: Choice
MULTIPLE CHOICE
1. In Problem 1, Charlie has a utility function U(xA, xB) = xAxB, the price of apples is $1, and the price of
bananas is $2. If Charlie’s income were $320, how many units of bananas would he consume if he
chose the bundle that maximized his utility subject to his budget constraint?
a.
80
b.
40
c.
160
d.
16
e.
240
2. In Problem 1, Charlie has a utility function U(xA, xB) = xAxB, the price of apples is $1, and the price of
bananas is $2. If Charlie’s income were $160, how many units of bananas would he consume if he
chose the bundle that maximized his utility subject to his budget constraint?
a.
8
b.
40
c.
20
d.
80
e.
120
3. In Problem 1, Charlie has a utility function U(xA, xB) = xAxB, the price of apples is $1, and the price of
bananas is $2. If Charlie’s income were $200, how many units of bananas would he consume if he
chose the bundle that maximized his utility subject to his budget constraint?
a.
25
b.
10
c.
100
d.
50
e.
150
4. In Problem 1, Charlie has a utility function U(xA, xB) = xAxB, the price of apples is $1, and the price of
bananas is $2. If Charlie’s income were $160, how many units of bananas would he consume if he
chose the bundle that maximized his utility subject to his budget constraint?
a.
80
b.
40
c.
8
d.
20
e.
120
5. In Problem 1, Charlie has a utility function U(xA, xB) = xAxB, the price of apples is $1, and the price of
bananas is $2. If Charlie’s income were $400, how many units of bananas would he consume if he
chose the bundle that maximized his utility subject to his budget constraint?
a.
100
b.
20
c.
200
d.
50
e.
300
6. Charlie’s utility function is U(xA, xB) = xAxB. If Charlie’s income were $40, the price of apples were $2,
and the price of bananas were $5, how many apples would there be in the best bundle that Charlie
could afford?
a.
20
b.
6
c.
4
d.
5
e.
10
7. Charlie’s utility function is U(xA, xB) = xAxB. If Charlie’s income were $40, the price of apples were $2,
and the price of bananas were $6, how many apples would there be in the best bundle that Charlie
could afford?
a.
4
b.
20
c.
5
d.
6
e.
10
8. Charlie’s utility function is U(xA, xB) = xAxB. If Charlie’s income were $40, the price of apples were $2,
and the price of bananas were $3, how many apples would there be in the best bundle that Charlie
could afford?
a.
6
b.
20
c.
4
d.
5
e.
10
9. Charlie’s utility function is U(xA, xB) = xAxB. If Charlie’s income were $40, the price of apples were $4,
and the price of bananas were $6, how many apples would there be in the best bundle that Charlie
could afford?
a.
8
b.
10
c.
12
d.
9
e.
5
10. Charlie’s utility function is U(xA, xB) = xAxB. If Charlie’s income were $40, the price of apples were $5,
and the price of bananas were $8, how many apples would there be in the best bundle that Charlie
could afford?
a.
8
b.
11
c.
10
d.
15
e.
4
11. In Problem 2, Clara’s utility function is U(X, Y) = (X + 2)(Y + 1). If Clara’s marginal rate of
substitution is −5 and she is consuming 15 units of good X, how many units of good Y is she
consuming?
a.
5
b.
85
c.
20
d.
84
e.
11
12. In Problem 2, Clara’s utility function is U(X, Y) = (X + 2)(Y + 1). If Clara’s marginal rate of
substitution is −2 and she is consuming 10 units of good X, how many units of good Y is she
consuming?
a.
2
b.
24
c.
12
d.
23
e.
5
13. In Problem 2, Clara’s utility function is U(X, Y) = (X + 2)(Y + 1). If Clara’s marginal rate of
substitution is −6 and she is consuming 8 units of good X, how many units of good Y is she
consuming?
a.
14
b.
60
c.
59
d.
6
e.
13
14. In Problem 2, Clara’s utility function is U(X, Y) = (X + 2)(Y + 1). If Clara’s marginal rate of
substitution is −4 and she is consuming 10 units of good X, how many units of good Y is she
consuming?
a.
48
b.
14
c.
4
d.
47
e.
9
15. In Problem 2, Clara’s utility function is U(X, Y) = (X + 2)(Y + 1). If Clara’s marginal rate of
substitution is −6 and she is consuming 8 units of good X, how many units of good Y is she
consuming?
a.
59
b.
6
c.
60
d.
14
e.
13
16. In Problem 3, Ambrose’s utility is U(x1, x2) = = 4x1/21 + x2. If the price of nuts (good 1) is $1, the price
of berries (good 2) is $7, and his income is $238, how many units of nuts will Ambrose choose?
a.
6
b.
196
c.
392
d.
199
e.
98
17. In Problem 3, Ambrose’s utility is U(x1, x2) = = 4x1/21 + x2. If the price of nuts (good 1) is $1, the price
of berries (good 2) is $4, and his income is $132, how many units of nuts will Ambrose choose?
a.
64
b.
17
c.
128
d.
67
e.
32
18. In Problem 3, Ambrose’s utility is U(x1, x2) = = 4x1/21 + x2. If the price of nuts (good 1) is $1, the price
of berries (good 2) is $4, and his income is $104, how many units of nuts will Ambrose choose?
a.
67
b.
128
c.
64
d.
10
e.
32
19. In Problem 3, Ambrose’s utility is U(x1, x2) = = 4x1/21 + x2. If the price of nuts (good 1) is $1, the price
of berries (good 2) is $6, and his income is $186, how many units of nuts will Ambrose choose?
a.
288
b.
144
c.
147
d.
7
e.
72
20. In Problem 3, Ambrose’s utility is U(x1, x2) = = 4x1/21 + x2. If the price of nuts (good 1) is $1, the price
of berries (good 2) is $4, and his income is $108, how many units of nuts will Ambrose choose?
a.
128
b.
64
c.
67
d.
11
e.
32
21. Ambrose’s utility function is = 4x1/21 + x2. If the price of nuts (good 1) is $1, the price of berries (good
2) is $6, and his income is $198, how many units of berries will Ambrose choose?
a.
145
b.
9
c.
18
d.
8
e.
12
22. Ambrose’s utility function is = 4x1/21 + x2. If the price of nuts (good 1) is $1, the price of berries (good
2) is $10, and his income is $460, how many units of berries will Ambrose choose?
a.
401
b.
5
c.
6
d.
12
e.
9
23. Ambrose’s utility function is = 4x1/21 + x2. If the price of nuts (good 1) is $1, the price of berries (good
2) is $9, and his income is $369, how many units of berries will Ambrose choose?
a.
10
b.
4
c.
325
d.
5
e.
8
24. Ambrose’s utility function is = 4x1/21 + x2. If the price of nuts (good 1) is $1, the price of berries (good
2) is $5, and his income is $190, how many units of berries will Ambrose choose?
a.
36
b.
101
c.
18
d.
17
e.
21
25. Ambrose’s utility function is = 4x1/21 + x2. If the price of nuts (good 1) is $1, the price of berries (good
2) is $7, and his income is $259, how many units of berries will Ambrose choose?
a.
8
b.
197
c.
9
d.
18
e.
12
26. In Problem 6, Elmer’s utility function is U(x, y) = minx, y2. If the price of x is $20, the price of y is
$20, and Elmer chooses to consume 8 units of y, what must Elmer’s income be?
a.
$2,880
b.
$320
c.
$1,540
d.
$1,440
e.
There is not enough information to tell.
27. In Problem 6, Elmer’s utility function is U(x, y) = minx, y2. If the price of x is $20, the price of y is
$30, and Elmer chooses to consume 4 units of y, what must Elmer’s income be?
a.
$540
b.
$880
c.
$440
d.
$200
e.
There is not enough information to tell.
28. In Problem 6, Elmer’s utility function is U(x, y) = minx, y2. If the price of x is $25, the price of y is
$10, and Elmer chooses to consume 5 units of y, what must Elmer’s income be?
a.
$1,350
b.
$175
c.
$775
d.
$675
e.
There is not enough information to tell.
29. In Problem 6, Elmer’s utility function is U(x, y) = minx, y2. If the price of x is $15, the price of y is
$30, and Elmer chooses to consume 2 units of y, what must Elmer’s income be?
a.
$240
b.
$90
c.
$220
d.
$120
e.
There is not enough information to tell.
30. In Problem 6, Elmer’s utility function is U(x, y) = minx, y2. If the price of x is $15, the price of y is
$20, and Elmer chooses to consume 7 units of y, what must Elmer’s income be?
a.
$245
b.
$1,750
c.
$975
d.
$875
e.
There is not enough information to tell.
31. In Problem 7, what bundle would Linus choose if the price of x is $2, the price of y is $4, and his
income is $24?
a.
(0, 6)
b.
(12, 0)
c.
(12, 6)
d.
(6, 3)
e.
(6, 6)