chocolates and 4 hard candies

• 90 • 440 • 404

Suppose Faith and Mickey are playing both dictator and ultimatum games. Faith is the dictator/proposer and has $20 to allocate. Based on repeated experiments of the dictator and ultimatum games, what payouts to Mickey would be most consistent with the findings of behavioral economists? Multiple Choice • Mickey receives $0 from the dictator game and $2 from the ultimatum game. • Mickey receives $10 from the dictator game and $8 from the ultimatum game. • Mickey receives $10 from the dictator game and $10 from the ultimatum game. • Mickey receives $8 from the dictator game and $10 from the ultimatum game.

Assume that a consumer purchases a combination of products Y and Z and that the MUy/Py = 8 and MUz/Pz = 5. To maximize utility, without spending more money, the consumer should Multiple Choice • purchase less of Y and more of Z. • purchase more of Y and less of Z. • purchase more of both Y and Z. • make no change in the quantities Y and Z.

The table shows an indifference schedule for several combinations of X and Y.

Combination Quantity of X Quantity of Y a 20 1 b 16 2 c 12 3 d 10 4 e 9 5

Approximately how much of Y is the consumer willing to give up to obtain the twelfth unit of X? Multiple Choice • 2 • 1/2 • 4 • 1/4

A child is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 50 cents each. The marginal utilities derived from each product are

as shown in the following table.

Number of Items MU of Chocolates MU of Hard Candies 1 60 150 2 50 140 3 40 120 4 30 100 5 20 80 6 10 70 7 5 50 8 0 20

If the child buys either chocolates or hard candies one piece at a time, what will be his first two purchases? Multiple Choice • a hard candy, followed by another hard candy • a hard candy, followed by a chocolate • a chocolate, followed by a hard candy • a chocolate, followed by another chocolate

Ben is exhausting his money income consuming products A and B in such quantities that MUa/Pa = 8 and MUb/Pb = 6. Ben should purchase Multiple Choice • less of A and more of B. • less of B and more of A. • more of both A and B. • less of both A and B.

The income of a consumer is $40, the price of A is $4, and the price of B is $6. If the quantity of A is measured vertically, then the slope of the budget line is Multiple Choice • −1.5. • −0.5. • −0.67. • −2.5.

If a consumer has an income of $24, the price of X is $2, and the price of Y is $3, what is the maximum quantity of X the consumer is able to purchase? Multiple Choice • 6 • 24