Exam 9: Possibilities,preferences,and Choices

Leah consumes at a point on her budget line where her marginal rate of substitution is less than the magnitude of the slope of her budget line.As Leah moves along her budget line toward her best affordable point,she will move

The price of one good divided by the price of another good is

Use the figure below to answer the following questions. Figure 9.2.1 -Which of the graphs in Figure 9.2.1 shows perfect complements?

Use the figure below to answer the following question. Figure 9.2.5 -Refer to Figure 9.2.5.The graphs show indifference curves for various goods.Graph ________ best describes the pair of goods baseballs and baseball bats.Graph ________ best describes the pair of goods desktop computers and laptop computers.

Use the figure below to answer the following questions. Figure 9.1.2 -Refer to Figure 9.1.2.Which budget line has the lowest relative price for compact discs?

Which one of the following statements is true about the indifference curves for two goods that are close but not perfect substitutes?

If the price of a normal good rises,the income effect

Bill consumes apples and bananas.Apples are measured on the vertical axis and bananas are measured on the horizontal axis.Bill's income doubles,the price of apples doubles,and the price of bananas triples.Bill's budget line

Peter's income increases and so does his consumption of both movies and pop,but his consumption of pop increases by less than his consumption of movies increases.Which one of the following statements is true for Peter?

A change in the price of the good measured on the horizontal axis changes ________ of the budget line.

Use the information below to answer the following questions. Fact 9.3.1 Marc has an income of $20 and spends it on two goods,root beer (measured on the vertical axis)and chips (measured on the horizontal axis).The price of root beer is $1 a can.The price of chips is $0.50 a bag.Initially,Marc chooses to consume 10 cans of root beer and 20 bags of chips.Then the price of root beer rises to $1.50 per can and the price of chips falls to $0.25 a bag. -Refer to Fact 9.3.1.When the price of a bag of chips falls,Marc

Use the figure below to answer the following questions. Figure 9.2.1 -Which one of the graphs in Figure 9.2.1 shows perfect substitutes?

Use the figure below to answer the following questions. Figure 9.2.3 -Refer to Figure 9.2.3.When Rashid chooses the consumption point of 2 books and 6 albums,his marginal rate of substitution is ________.

The effect of a change in income on buying plans is called the

Use the figure below to answer the following question. Figure 9.3.2 -Which one of the following statements about Figure 9.3.2 is true?

Which one of the following statements is false?

If the price of the good measured on the horizontal axis increases,the budget line

The substitution effect

A consumer always has a cup of coffee with a tablespoon of sugar.What would the consumer's indifference curves for these two goods look like?

Which one of the following statements is true about the indifference curves for two goods that are perfect substitutes?