Question 1

If the marginal rate of substitution of X for Y is 2, the price of X is $3, and the price of Y is $1, a utility-maximizing consumer should

Accepted Answer

A)  be indifferent between 1X and 2Y. 
B)  prefer 3Y to 1X. 
C)  choose less X and more Y. 
D)  choose more X and less Y. 
A)  be indifferent between 1X and 2Y. 
B)  prefer 3Y to 1X. 
C)  choose less X and more Y. 
D)  choose more X and less Y.

Question 2

Which of the following assumptions is(are) NOT made in consumer behavior theory?

Accepted Answer

A)  Consumers can rank all bundles of goods. 
B)  Consumers can measure the utility they get from all bundles of goods. 
C)  Consumers have complete information. 
D)  both a and b 
E)  None of the above are assumptions made in consumer behavior theory. 
A)  Consumers can rank all bundles of goods. 
B)  Consumers can measure the utility they get from all bundles of goods. 
C)  Consumers have complete information. 
D)  both a and b 
E)  None of the above are assumptions made in consumer behavior theory.

Question 3

Refer to the following indifference map for a consumer who has an income of $48 to spend on goods X and Y and the market prices of X and Y are both equal to $4:
  
-In order to maximize utility subject to her budget constraint, this consumer should buy how many units of good X?

Accepted Answer

A)  0 
B)  4 
C)  6 
D)  8 
E)  12 
A)  0 
B)  4 
C)  6 
D)  8 
E)  12

Question 4

The price of Y is $10.
-Which of the following are points on the consumer's demand curve for X?

Accepted Answer

A)  $2, 300 units 
B)  $3, 120 units 
C)  $5, 120 units 
D)  both a and b 
E)  both c and d 
A)  $2, 300 units 
B)  $3, 120 units 
C)  $5, 120 units 
D)  both a and b 
E)  both c and d

Question 5

Refer to the following graph:
The price of X is $20 and the price of Y is $40.
  
-If income is $800, how many units of Y will the consumer choose?

Accepted Answer

A)  6 
B)  7 
C)  8 
D)  9 
E)  10 
A)  6 
B)  7 
C)  8 
D)  9 
E)  10

Question 6

The ratio of the prices of two goods measures

Accepted Answer

A)  the rate at which a consumer is willing to substitute one good for another. 
B)  the rate at which a consumer is able to substitute one good for another. 
C)  the marginal rate of substitution of X for Y. 
D)  both a and c 
E)  both b and c 
A)  the rate at which a consumer is willing to substitute one good for another. 
B)  the rate at which a consumer is able to substitute one good for another. 
C)  the marginal rate of substitution of X for Y. 
D)  both a and c 
E)  both b and c

Question 7

Refer to the following graph:
  
-What is the equation for budget line RS?

Accepted Answer

A)  Y = 10 + 18X 
B)  Y = 10 - 1.8X 
C)  Y = 15 + (9/5)X 
D)  Y = 1.8 + (9/5)X 
E)  Y = 18 -(18/10)X 
A)  Y = 10 + 18X 
B)  Y = 10 - 1.8X 
C)  Y = 15 + (9/5)X 
D)  Y = 1.8 + (9/5)X 
E)  Y = 18 -(18/10)X

Question 8

Atypical indifference curve

Accepted Answer

A)  shows all combinations of goods that give a consumer the same level of utility. 
B)  shows that as a consumer has more of a good he is less willing to exchange it for one unit of another good. 
C)  shifts out if income increases. 
D)  both a and b 
E)  all of the above 
A)  shows all combinations of goods that give a consumer the same level of utility. 
B)  shows that as a consumer has more of a good he is less willing to exchange it for one unit of another good. 
C)  shifts out if income increases. 
D)  both a and b 
E)  all of the above

Question 9

Suppose that 2 units of X and 8 units of Y give a consumer the same satisfaction as 4 units of X and 2 units of Y. Then

Accepted Answer

A)  the consumer is willing to give up 3 units of Y to obtain 1 more unit of X. 
B)  the consumer is willing to give up 1 unit of Y to obtain 3 more units of X. 
C)  the marginal rate of substitution of X for Y is 3. 
D)  both a and c 
E)  both b and c 
A)  the consumer is willing to give up 3 units of Y to obtain 1 more unit of X. 
B)  the consumer is willing to give up 1 unit of Y to obtain 3 more units of X. 
C)  the marginal rate of substitution of X for Y is 3. 
D)  both a and c 
E)  both b and c

Question 10

Refer to the following graphs of a consumer's indifference map and budget lines and possible demand curves:

The price of Y is $50.
-If the price of X is $10, what combination of X and Y will a utility-maximizing consumer choose?

Accepted Answer

A)  400X, 100Y 
B)  800X, 130Y 
C)  850X, 130Y 
D)  1,000X, 100Y 
E)  none of the above 
A)  400X, 100Y 
B)  800X, 130Y 
C)  850X, 130Y 
D)  1,000X, 100Y 
E)  none of the above

If the marginal rate of substitution of X for Y is 2, the price of X is $3, and the price of Y is $1, a utility-maximizing consumer should

Which of the following assumptions is(are) NOT made in consumer behavior theory?

Refer to the following indifference map for a consumer who has an income of $48 to spend on goods X and Y and the market prices of X and Y are both equal to $4: -In order to maximize utility subject to her budget constraint, this consumer should buy how many units of good X?

The price of Y is $10. -Which of the following are points on the consumer's demand curve for X?

Refer to the following graph: The price of X is $20 and the price of Y is $40. -If income is $800, how many units of Y will the consumer choose?

The ratio of the prices of two goods measures

Refer to the following graph: -What is the equation for budget line RS?

Atypical indifference curve

Suppose that 2 units of X and 8 units of Y give a consumer the same satisfaction as 4 units of X and 2 units of Y. Then

Refer to the following graphs of a consumer's indifference map and budget lines and possible demand curves: The price of Y is $50. -If the price of X is $10, what combination of X and Y will a utility-maximizing consumer choose?

Managers, Profits, and Markets

Demand, Supply, and Market Equilibrium

Marginal Analysis for Optimal Decisions

Basic Estimation Techniques

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

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Exam 5: Theory of Consumer Behavior

If the marginal rate of substitution of X for Y is 2, the price of X is $3, and the price of Y is $1, a utility-maximizing consumer should

Which of the following assumptions is(are) NOT made in consumer behavior theory?

Refer to the following indifference map for a consumer who has an income of $48 to spend on goods X and Y and the market prices of X and Y are both equal to $4: -In order to maximize utility subject to her budget constraint, this consumer should buy how many units of good X?

The price of Y is $10. -Which of the following are points on the consumer's demand curve for X?

Refer to the following graph: The price of X is $20 and the price of Y is $40. -If income is $800, how many units of Y will the consumer choose?

The ratio of the prices of two goods measures

Refer to the following graph: -What is the equation for budget line RS?

Atypical indifference curve

Suppose that 2 units of X and 8 units of Y give a consumer the same satisfaction as 4 units of X and 2 units of Y. Then

Refer to the following graphs of a consumer's indifference map and budget lines and possible demand curves: The price of Y is $50. -If the price of X is $10, what combination of X and Y will a utility-maximizing consumer choose?

Managers, Profits, and Markets

Demand, Supply, and Market Equilibrium

Marginal Analysis for Optimal Decisions

Basic Estimation Techniques

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters