EQ #4 – AGEC 105 – September 17, 2012 (4 pts) 1. What caused the budget constraint to change? (a) The price of steak rose. (b) The price of steak fell. (c) The expenditure on steak and pork rose. (d) The price of pork fell. 2. If the expenditure on steak and pork equals $100, what is the price/lb of pork?

3. The budget for this consumer is $48 3. The budget for this consumer is $48. List two true statements concerning the above diagram: (a) (b) 4. The marginal utility of Dr. Pepper is the same as the marginal utility of Pepsi. Suppose the prices of Dr. Pepper is $2/glass. In order for a rational consumer to buy more glasses of Pepsi than Dr. Pepper, the price of Pepsi must be: (a) equal to $2 (c) less than $2 (b) greater than $2 (d) can’t say; insufficient information