Agricultural Economics I: Consumer Behaviour Quiz

True (A)

It doubles.

<p>4, 6</p> Signup and view all the answers

<p>The new utility maximizing combination (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>$10</p> Signup and view all the answers

<p>$2 = 4 units $1 = 6 units</p> Signup and view all the answers

<p>0.5 util/K500 (C)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>96</p> Signup and view all the answers

<p>2, 4</p> Signup and view all the answers

<p>2 units of A and 4 units of B = 96 utils 4 units of A and 3 units of B = Less than 96 utils 3 units of A and 2 units of B = Less than 96 utils 1 unit of A and 5 units of B = Less than 96 utils</p> Signup and view all the answers

<p>2 units of A and 4 units of B (D)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>$1</p> Signup and view all the answers

<p>10 (C)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>The quantity of X will increase, and the quantity of Y may decrease or remain the same depending on the consumer's preferences.</p> Signup and view all the answers

<p>money income</p> Signup and view all the answers

<p>1 = 10 2 = 8 3 = 6 4 = 4 5 = 3</p> Signup and view all the answers

<p>14 (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Ceteris paribus means 'all other things being equal' or holding other factors constant while analyzing the relationship between two variables.</p> Signup and view all the answers

<p>MK200 (C)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>1/2</p> Signup and view all the answers

<p>MK1000</p> Signup and view all the answers

<p>5 units of X and 0 units of Y = MK1000 4 units of X and 2 units of Y = MK1000 3 units of X and 4 units of Y = MK1000 2 units of X and 6 units of Y = MK1000</p> Signup and view all the answers

<p>6 units (C)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>The price of good Y</p> Signup and view all the answers

<p>They are on lower indifference curves. (D)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>MRS = PB/PA</p> Signup and view all the answers

<p>numerically</p> Signup and view all the answers

<p>MUA/PA = MUB/PB (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>(MUA/PA) = (MUB/PB)</p> Signup and view all the answers

<p>MRS = Marginal Rate of Substitution PB/PA = Price ratio of B to A Equilibrium position = Condition where consumer maximizes utility Indifference curve = Represents combinations yielding equal utility</p> Signup and view all the answers

<p>Marginal Rate of Substitution (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>It implies that the marginal rate of substitution is equal to the ratio of the prices of the two goods.</p> Signup and view all the answers

<p>diminishing marginal utility</p> Signup and view all the answers

<p>Budget Line = Represents the combinations of two goods that a consumer can purchase given their income Indifference Curve = Represents a set of combinations of two goods that provide the same level of utility Equilibrium = Point where the consumer maximizes their utility given their budget Marginal Utility = Additional satisfaction gained from consuming an extra unit of a good</p> Signup and view all the answers

Finding the combination of products that gives the highest level of satisfaction (utility) given a fixed budget.

The extra satisfaction a consumer gets from consuming one more unit of a product.

The additional satisfaction divided by the cost of obtaining one extra unit of a product.

The condition where the marginal utility per dollar spent is equal for all products.

The limited amount of money a consumer has to spend on purchasing goods and services.

The combination of goods and services that maximizes a consumer's satisfaction given their budget constraint.

A predetermined amount of money available to be spent without change.

The total satisfaction derived from consuming a certain amount of products.

The combination of products A and B that maximizes Thoko's satisfaction, given her tastes, income, and prices of other goods.

A table showing the quantity of product B Thoko will buy at different prices, holding other factors constant.

A graph showing the relationship between the price of product B and the quantity Thoko will buy.

A good for which demand increases as income increases.

A good for which demand decreases as income increases.

The amount consumers pay for one unit of Product B.

The amount of money available to a consumer to purchase goods and services.

The total number of units of Product B that consumers want to purchase at a given price.

M = Px(X) + Py(Y), where M is income, X and Y are quantities of goods, and Px and Py are their respective prices.

The additional satisfaction gained from spending one more dollar on a good.

The satisfaction a consumer gets from consuming a good or service.

A graph that shows the relationship between the price of a good and the quantity demanded.

All other things being equal, or holding other factors constant when considering a particular relationship.

A graphical representation of all possible combinations of two goods a consumer can buy with a given income and prices.

The ratio of the price of one good to the price of another good, showing the trade-off between the two goods.

The value of the next best alternative forgone when making a choice.

The cost of purchasing one unit of good X.

The cost of purchasing one unit of good Y.

The total amount of money a consumer has to spend on goods and services.

Different quantities of goods X and Y a consumer can purchase with given budget and prices.

Points on an indifference curve that represent combinations of goods a consumer can afford given their budget.

Points on an indifference curve that represent combinations of goods a consumer cannot afford given their budget.

The point on the indifference curve where the consumer maximizes their utility given their budget constraint.

The slope of the indifference curve (MRS) is equal to the slope of the budget line (PB/PA) at the optimal consumption point.

The idea that utility can be assigned specific numerical values.

The consumer maximizes utility when the ratio of marginal utility to price is equal for all goods.

An approach to understanding consumer behavior that assumes utility is not measurable.

Both the indifference curve approach and the marginal utility approach show that the consumer maximizes utility when the marginal rate of substitution (MRS) equals the ratio of prices (PB/PA).

At the point where a consumer maximizes their utility, the Marginal Rate of Substitution (MRS) is equal to the ratio of the prices of the two goods. This implies that the consumer is willing to trade one good for another at a rate that reflects the relative prices.

At equilibrium, the MRS is also equal to the ratio of the marginal utilities of the two goods (MUB/MUA). This means the satisfaction gained from consuming one more unit of good B is relative to the satisfaction from consuming one more unit of good A.

An increase in the price of good B will cause the budget line to pivot inward, decreasing the maximum quantity of good B that can be purchased. This is because the consumer now has less purchasing power for good B.

By observing how the quantity demanded of good B changes as its price increases (while holding income and the price of good A constant), we can trace out a demand curve. This curve shows the relationship between the price of good B and the quantity demanded at each price point.

The demand curve for good B shows the inverse relationship between price and quantity demanded. As the price of B increases, the quantity demanded decreases, reflecting the principle of diminishing marginal utility.