Question 1

Exhibit 6-29  
-Which graph in Exhibit 6-29 shows the effect of an increase in the price of clothing and a decrease in the price of food?

Accepted Answer

A)  Graph a 
B)  Graph b 
C)  Graph c 
D)  Graph d 
E)  none of these 
A)  Graph a 
B)  Graph b 
C)  Graph c 
D)  Graph d 
E)  none of these

Question 2

Exhibit 6-28  
-The rotation of the budget line in Exhibit 6-28 from AC to AB represents a(n)

Accepted Answer

A)  increase in the price of clams 
B)  increase in the price of mussels 
C)  decrease in the price of clams 
D)  decrease in the price of mussels 
E)  increase in the amount the consumer can spend 
A)  increase in the price of clams 
B)  increase in the price of mussels 
C)  decrease in the price of clams 
D)  decrease in the price of mussels 
E)  increase in the amount the consumer can spend

Question 3

The marginal rate of substitution indicates

Accepted Answer

A)  how much of one good a consumer is willing to give up to get one more unit of another good while remaining equally satisfied 
B)  how much of a good a consumer can receive for $1 while remaining equally satisfied 
C)  the tendency of a consumer to substitute lower-priced goods for a good whose price has increased 
D)  the limits of utility analysis 
E)  the basis of consumer surplus 
A)  how much of one good a consumer is willing to give up to get one more unit of another good while remaining equally satisfied 
B)  how much of a good a consumer can receive for $1 while remaining equally satisfied 
C)  the tendency of a consumer to substitute lower-priced goods for a good whose price has increased 
D)  the limits of utility analysis 
E)  the basis of consumer surplus

Question 4

Exhibit 6-26  
-Consider Exhibit 6-26. Three budget lines are shown. Which of the following statements is true about the budget lines?

Accepted Answer

A)  Budget line B2 reflects the same income and price for DVDs as budget line B1 but a higher price for books. 
B)  Budget line B3 reflects a higher income but the same price for both books and DVDs as budget line B2. 
C)  Budget line B3 reflects higher income and the same prices for both books and DVDs as budget line B1. 
D)  Budget line B1 reflects lower income than budget line B2. 
E)  Budget line B3 reflects a lower price ration than budget line B3. 
A)  Budget line B2 reflects the same income and price for DVDs as budget line B1 but a higher price for books. 
B)  Budget line B3 reflects a higher income but the same price for both books and DVDs as budget line B2. 
C)  Budget line B3 reflects higher income and the same prices for both books and DVDs as budget line B1. 
D)  Budget line B1 reflects lower income than budget line B2. 
E)  Budget line B3 reflects a lower price ration than budget line B3.

Question 5

Within the framework of indifference curve analysis, what prevents the individual from purchasing more of all goods?

Accepted Answer

A)  Legal prohibitions 
B)  Budget constraint 
C)  The slope of the indifference curve 
D)  Psychological considerations 
E)  Diminishing marginal utility 
A)  Legal prohibitions 
B)  Budget constraint 
C)  The slope of the indifference curve 
D)  Psychological considerations 
E)  Diminishing marginal utility

Question 6

Exhibit 6-31  
-Assume that a consumer is initially in equilibrium at point a in Exhibit 6-31. Then the price of good B falls. The movement from point c to point b represents

Accepted Answer

A)  the substitution effect 
B)  the income effect 
C)  the substitution effect minus the income effect 
D)  the sum of the substitution and income effects 
E)  the income effect minus the substitution effect 
A)  the substitution effect 
B)  the income effect 
C)  the substitution effect minus the income effect 
D)  the sum of the substitution and income effects 
E)  the income effect minus the substitution effect

Question 7

What would happen to the budget line if the price of orange juice increased and orange juice is measured on the vertical axis?

Accepted Answer

A)  It would shift to the right. 
B)  It would rotate outward along the horizontal axis. 
C)  It would rotate inward along the horizontal axis. 
D)  It would rotate outward along the vertical axis. 
E)  It would rotate inward along the vertical axis. 
A)  It would shift to the right. 
B)  It would rotate outward along the horizontal axis. 
C)  It would rotate inward along the horizontal axis. 
D)  It would rotate outward along the vertical axis. 
E)  It would rotate inward along the vertical axis.

Question 8

If two goods have the same price, a consumer will buy equal quantities of those two goods.

Accepted Answer

A) True 
 B)False

Exhibit 6-29 -Which graph in Exhibit 6-29 shows the effect of an increase in the price of clothing and a decrease in the price of food?

Exhibit 6-28 -The rotation of the budget line in Exhibit 6-28 from AC to AB represents a(n)

The marginal rate of substitution indicates

Exhibit 6-26 -Consider Exhibit 6-26. Three budget lines are shown. Which of the following statements is true about the budget lines?

Within the framework of indifference curve analysis, what prevents the individual from purchasing more of all goods?

Exhibit 6-31 -Assume that a consumer is initially in equilibrium at point a in Exhibit 6-31. Then the price of good B falls. The movement from point c to point b represents

What would happen to the budget line if the price of orange juice increased and orange juice is measured on the vertical axis?

If two goods have the same price, a consumer will buy equal quantities of those two goods.

The Art and Science of Economic Analysis

Appendix: Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix: price Elasticity and Tax Incidence

Consumer Choice and Demand

Production and Cost in the Firm

Appendix: a Closer Look at Production and Cost

A: perfect Competition

B: perfect Competition

A: monopoly

B: Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

Exam 6: Appendix: Indifference Curves and Utility Maximization

Exhibit 6-29 -Which graph in Exhibit 6-29 shows the effect of an increase in the price of clothing and a decrease in the price of food?

Exhibit 6-28 -The rotation of the budget line in Exhibit 6-28 from AC to AB represents a(n)

The marginal rate of substitution indicates

Exhibit 6-26 -Consider Exhibit 6-26. Three budget lines are shown. Which of the following statements is true about the budget lines?

Within the framework of indifference curve analysis, what prevents the individual from purchasing more of all goods?

Exhibit 6-31 -Assume that a consumer is initially in equilibrium at point a in Exhibit 6-31. Then the price of good B falls. The movement from point c to point b represents

What would happen to the budget line if the price of orange juice increased and orange juice is measured on the vertical axis?

If two goods have the same price, a consumer will buy equal quantities of those two goods.

The Art and Science of Economic Analysis

Appendix: Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix: price Elasticity and Tax Incidence

Consumer Choice and Demand

Production and Cost in the Firm

Appendix: a Closer Look at Production and Cost

A: perfect Competition

B: perfect Competition

A: monopoly

B: Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters