Question 1

The slope of a(n)_____ curve shows the rate at which two goods can be exchanged _____.

Accepted Answer

A) indifference;without changing the total budget 
B) utility;without changing the total budget 
C) indifference;without changing total utility 
D) marginal utility;to increase the consumer's marginal utility 
A) indifference;without changing the total budget 
B) utility;without changing the total budget 
C) indifference;without changing total utility 
D) marginal utility;to increase the consumer's marginal utility

Question 2

Use the following to answer question:  
-(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.Assume that you are consuming the combination of goods at point K.Given the budget constraint FL,utility:

Accepted Answer

A) can be increased by consuming more nights in a hotel room and fewer train tickets. 
B) can be increased by consuming fewer nights in a hotel room and more train tickets. 
C) can be increased by consuming more of both goods. 
D) cannot be increased. 
A) can be increased by consuming more nights in a hotel room and fewer train tickets. 
B) can be increased by consuming fewer nights in a hotel room and more train tickets. 
C) can be increased by consuming more of both goods. 
D) cannot be increased.

Question 3

In terms of indifference curves,a demand curve is generated by changes in:

Accepted Answer

A) the income effect. 
B) the substitution effect. 
C) the price of one good. 
D) the price of both goods simultaneously. 
A) the income effect. 
B) the substitution effect. 
C) the price of one good. 
D) the price of both goods simultaneously.

Question 4

Use the following to answer question:  
-(Figure: The Optimal Consumption Bundle)Use Figure The Optimal Consumption Bundle.Which of the following could lead to an optimal consumption bundle on indifference curve I1?

Accepted Answer

A) an increase in income 
B) an increase in the price of restaurant meals 
C) a decrease in the price of rooms 
D) a decrease in the price of restaurant meals 
A) an increase in income 
B) an increase in the price of restaurant meals 
C) a decrease in the price of rooms 
D) a decrease in the price of restaurant meals

Question 5

Suppose peanut butter is an inferior good for Ilya and the price of peanut butter rises.What will happen to Ilya's consumption of peanut butter?

Accepted Answer

A) The substitution effect will cause an increase in the consumption of peanut butter. 
B) The substitution effect will cause a decrease in the consumption of peanut butter and the income effect will cause an increase in the consumption of peanut butter. 
C) The substitution effect will cause a decrease in the consumption of peanut butter. 
D) The income effect will cause an increase in the consumption of peanut butter. 
A) The substitution effect will cause an increase in the consumption of peanut butter. 
B) The substitution effect will cause a decrease in the consumption of peanut butter and the income effect will cause an increase in the consumption of peanut butter. 
C) The substitution effect will cause a decrease in the consumption of peanut butter. 
D) The income effect will cause an increase in the consumption of peanut butter.

Question 6

Use the following to answer question:  
-(Figure: The Optimal Consumption Bundle)Use Figure The Optimal Consumption Bundle.Which of the following could lead to an optimal consumption bundle on indifference curve I3?

Accepted Answer

A) an increase in income 
B) an increase in the price of restaurant meals 
C) an increase in the price of rooms 
D) a decrease in income 
A) an increase in income 
B) an increase in the price of restaurant meals 
C) an increase in the price of rooms 
D) a decrease in income

Question 7

Diminishing marginal utility is the reason most indifference curves:

Accepted Answer

A) slope upward. 
B) slope downward. 
C) are vertical. 
D) are horizontal. 
A) slope upward. 
B) slope downward. 
C) are vertical. 
D) are horizontal.

Question 8

Use the following to answer question:  
-(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.Which of the following is TRUE?

Accepted Answer

A) To increase utility beyond that received at point I requires an increase in the price of olive oil. 
B) Point J could be attained with an increase in Ashyra's income. 
C) An increase in the prices of olive oil and dish soap would allow Ashyra to attain point J. 
D) To increase utility beyond that received at point I requires an increase in the price of dish soap. 
A) To increase utility beyond that received at point I requires an increase in the price of olive oil. 
B) Point J could be attained with an increase in Ashyra's income. 
C) An increase in the prices of olive oil and dish soap would allow Ashyra to attain point J. 
D) To increase utility beyond that received at point I requires an increase in the price of dish soap.

Question 9

Use the following to answer question:  
-(Table: Madeline's Preferences for T-Shirts and Coffee)Use Table Madeline's Preferences for T-Shirts and Coffee.Assume each consumption bundle provides the same level of utility.Suppose Madeline is consuming bundle A but then changes her consumption and slowly moves along her indifference curve to bundles B,C,D,and finally E.As she moves toward bundle E,she gives up:

Accepted Answer

A) the same number of T-shirts to obtain another cup of coffee. 
B) an increasing numbers of T-shirts to obtain another cup of coffee. 
C) a decreasing numbers of T-shirts to obtain another cup of coffee. 
D) no T-shirts to obtain another cup of coffee. 
A) the same number of T-shirts to obtain another cup of coffee. 
B) an increasing numbers of T-shirts to obtain another cup of coffee. 
C) a decreasing numbers of T-shirts to obtain another cup of coffee. 
D) no T-shirts to obtain another cup of coffee.

Question 10

To find her optimal consumption bundle,Vanessa would have to:

Accepted Answer

A) calculate the numerical value of the utility she receives from each specific consumption bundle. 
B) rank-order consumption bundles based on the level of utility she receives from each one. 
C) calculate her budget for each consumption bundle and identify the substitution and income effects of each bundle. 
D) choose her bundles in an irrational manner. 
A) calculate the numerical value of the utility she receives from each specific consumption bundle. 
B) rank-order consumption bundles based on the level of utility she receives from each one. 
C) calculate her budget for each consumption bundle and identify the substitution and income effects of each bundle. 
D) choose her bundles in an irrational manner.

Question 11

(Scenario: Music Downloads and Streamed Movies)Read the scenario Music Downloads and Streamed Movies.Which of the following equations expresses Phillip's budget line? Scenario: Music Downloads and Streamed Movies
Phillip has an income of $300 per month,which he uses to purchase music downloads (MD)and streamed movies (SM).Each music download costs $1 and each streamed movie costs $5.

Accepted Answer

A) 300 = 1MD + 5SM 
B) SM = 300 - 1X 
C) 300 = 1 / MD + 5 / SM 
D) SM = 300 + 5SM 
A) 300 = 1MD + 5SM 
B) SM = 300 - 1X 
C) 300 = 1 / MD + 5 / SM 
D) SM = 300 + 5SM

Question 12

Use the following to answer question:  
-(Figure: The Consumption of Video Games and E-Books)Use Figure The Consumption of Video Games and E-Books.Which chart shows the effects of an increase in the price of video games when video games and e-books are substitutes but not perfect substitutes?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 13

When an individual's consumption of an additional unit of a good generates a smaller increase in total utility than the previous unit consumed,then this person's indifference curve will be:

Accepted Answer

A) a straight line. 
B) convex,or bowed toward the origin. 
C) concave,or bowed away from the origin. 
D) a right angle. 
A) a straight line. 
B) convex,or bowed toward the origin. 
C) concave,or bowed away from the origin. 
D) a right angle.

Question 14

Use the following to answer question:  
-(Figure: Harold's Indifference Curves)Use Figure Harold's Indifference Curves.If the price of bread is $2 per loaf,the price of cheese is $4 per pound,and Harold has $28 to spend on bread and cheese,Harold's optimal consumption bundle is _____ loaves of bread and _____ pounds of cheese.

Accepted Answer

A) 6;4 
B) 4;3 
C) 3;2 
D) 2;8 
A) 6;4 
B) 4;3 
C) 3;2 
D) 2;8

Question 15

Pooh spends all of his income on honey and maple syrup.Because he views honey and maple syrup as perfect substitutes,he is willing to substitute honey for maple syrup at the constant rate of 1 teaspoon of honey to 2 teaspoons of maple syrup.If the price of honey in terms of maple syrup is 2.2,Pooh's optimal consumption bundle will consist entirely of maple syrup.

Accepted Answer

A) True 
 B)False

The slope of a(n)_ curve shows the rate at which two goods can be exchanged _.

Use the following to answer question: -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.Assume that you are consuming the combination of goods at point K.Given the budget constraint FL,utility:

In terms of indifference curves,a demand curve is generated by changes in:

Use the following to answer question: -(Figure: The Optimal Consumption Bundle)Use Figure The Optimal Consumption Bundle.Which of the following could lead to an optimal consumption bundle on indifference curve I₁?

Suppose peanut butter is an inferior good for Ilya and the price of peanut butter rises.What will happen to Ilya's consumption of peanut butter?

Use the following to answer question: -(Figure: The Optimal Consumption Bundle)Use Figure The Optimal Consumption Bundle.Which of the following could lead to an optimal consumption bundle on indifference curve I₃?

Diminishing marginal utility is the reason most indifference curves:

Use the following to answer question: -(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.Which of the following is TRUE?

To find her optimal consumption bundle,Vanessa would have to:

Use the following to answer question: -(Figure: The Consumption of Video Games and E-Books)Use Figure The Consumption of Video Games and E-Books.Which chart shows the effects of an increase in the price of video games when video games and e-books are substitutes but not perfect substitutes?

When an individual's consumption of an additional unit of a good generates a smaller increase in total utility than the previous unit consumed,then this person's indifference curve will be:

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Filters

Exam 22: Consumer Preferences and Consumer Choice

The slope of a(n)_____ curve shows the rate at which two goods can be exchanged _____.

Use the following to answer question: -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.Assume that you are consuming the combination of goods at point K.Given the budget constraint FL,utility:

In terms of indifference curves,a demand curve is generated by changes in:

Use the following to answer question: -(Figure: The Optimal Consumption Bundle)Use Figure The Optimal Consumption Bundle.Which of the following could lead to an optimal consumption bundle on indifference curve I1?

Suppose peanut butter is an inferior good for Ilya and the price of peanut butter rises.What will happen to Ilya's consumption of peanut butter?

Use the following to answer question: -(Figure: The Optimal Consumption Bundle)Use Figure The Optimal Consumption Bundle.Which of the following could lead to an optimal consumption bundle on indifference curve I3?

Diminishing marginal utility is the reason most indifference curves:

Use the following to answer question: -(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.Which of the following is TRUE?

To find her optimal consumption bundle,Vanessa would have to:

Use the following to answer question: -(Figure: The Consumption of Video Games and E-Books)Use Figure The Consumption of Video Games and E-Books.Which chart shows the effects of an increase in the price of video games when video games and e-books are substitutes but not perfect substitutes?

When an individual's consumption of an additional unit of a good generates a smaller increase in total utility than the previous unit consumed,then this person's indifference curve will be:

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Filters

The slope of a(n)_ curve shows the rate at which two goods can be exchanged _.

Use the following to answer question: -(Figure: The Optimal Consumption Bundle)Use Figure The Optimal Consumption Bundle.Which of the following could lead to an optimal consumption bundle on indifference curve I₁?

Use the following to answer question: -(Figure: The Optimal Consumption Bundle)Use Figure The Optimal Consumption Bundle.Which of the following could lead to an optimal consumption bundle on indifference curve I₃?