Figure 7-2 Figure 7-2 Represents the Demand for Ice Cream

question 241

Multiple Choice

Figure 7-2
Figure 7-2 represents the demand for ice cream cones.
-Refer to Figure 7-2.Which of the following statements is true?

• A) Points a and b are the utility-maximizing quantities of ice cream cones at two different prices of ice cream.
• B) Points a and b may not necessarily be the utility-maximizing quantities of ice cream cones at two different prices because we have no information on the consumer's budget or the price of other goods.
• C) Point a could be a utility-maximizing choice if the price is $3 but point b may not be because we have no information on the marginal utility per dollar when price changes.
• D) Points a and b are derived independently of the utility-maximizing model.

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Definitions:

Asymptotes

Lines that a graph of a function approaches but never touches, indicating direction of curves infinitely far away.

Hyperbola

A type of smooth curve lying in a plane, formed by the intersection of a double cone with a plane in such a way that both halves of the curve are mirror images of each other.

Graph

The visual representation of data or functions on a coordinate system, showing relationships between variables.

Standard Form

A way of writing numbers using digits, or a specific way to write equations, such as Ax + By = C for lines.