Exam 9: Possibilities, preferences, and Choices

Use the information below to answer the following questions. Fact 9.3.3 Jim has made his best affordable choice of muffins and coffee.He spends all of his income on 10 muffins at $1 each and 20 cups of coffee at $2 each.Muffins and coffee are ordinary goods.Now the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup. -Refer to Fact 9.3.3.When the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup,Jim

Good X is measured on the horizontal axis and good Y is measured on the vertical axis.The marginal rate of substitution is

Use the figure below to answer the following question. Figure 9.2.4 -Refer to Figure 9.2.4.Rashid buys only books and CDs.The figure shows his preferences.Rashid's indifference curves ________ display diminishing marginal rate of substitution because ________.

The shape of a person's indifference curves between two goods depends on

Tonya,who is wealthy,and Jerome,who is not,both buy orange juice and croissants for lunch at the student cafeteria.Their budget lines are drawn with orange juice on the vertical axis and croissants on the horizontal axis.Choose the correct statement.

Goods that can be bought in any quantity desired are called

When the price of a good changes,the change in consumption that leaves the consumer indifferent between the two choices is called the

Which of the following results in a rightward shift of your indifference curves for gasoline and movie rentals?

As a consumer moves rightward along an indifference curve,

Use the information below to answer the following questions. Fact 9.3.3 Jim has made his best affordable choice of muffins and coffee.He spends all of his income on 10 muffins at $1 each and 20 cups of coffee at $2 each.Muffins and coffee are ordinary goods.Now the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup. -Refer to Fact 9.3.3.When the price of a muffin and the price of a cup of coffee change,

Use the figure below to answer the following questions. Figure 9.3.1 -Consider the budget line and indifference curve in Figure 9.3.1.If the price of good X is $1 a unit,then the price of good Y is

Albert is consuming at a point where his budget line is not as steep as indifference curve.To reach consumer equilibrium,Albert

Larry consumes only beer (B)and chips (C).His real income in terms of beer is

Use the figure below to answer the following questions. Figure 9.3.1 -Consider the budget line and indifference curve in Figure 9.3.1.At the best affordable point,the marginal rate of substitution is

A constant marginal rate of substitution between two goods implies

The magnitude of the slope of an indifference curve is

The price of a good increases relative to other goods.Which one of the following statements must be true? The resulting

Sara's income is $12 a week.The price of popcorn is $3 a bag,and the price of a smoothie is $3.The opportunity cost of a smoothie is

Use the figure below to answer the following questions. Figure 9.2.1 -Which of the indifference curves in Figure 9.2.1 illustrates perfect substitutes?

Use the figure below to answer the following questions. Figure 9.1.1 -Shelly's budget line is shown in Figure 9.1.1 Which point is unaffordable given her income and current prices?