Question 1

What is an individual's marginal rate of substitution between nickels and dollar bills? Assume the individual only cares about the monetary value of each bundle.​

Accepted Answer

A) ​5 
B) ​10 
C) ​20 
D) ​100 
A) ​5 
B) ​10 
C) ​20 
D) ​100

Question 2

Figure 21-18  
-Refer to Figure 21-18. Bundle B represents a point where

Accepted Answer

A) MRSxy > Py/Px. 
B) MRSxy = Px/Py. 
C) MRSxy x/Py. 
D) MRSxy > Px/Py. 
A) MRSxy > Py/Px. 
B) MRSxy = Px/Py. 
C) MRSxy x/Py. 
D) MRSxy > Px/Py.

Question 3

Figure 21-7  
-Refer to Figure 21-7. Suppose a consumer has $200 in income, the price of a book is $5, and the price of a DVD is $10. What is the value of B?

Accepted Answer

A) 40 
B) 20 
C) 10 
D) 2 
A) 40 
B) 20 
C) 10 
D) 2

Question 4

Bundle L contains 10 units of good X and 20 units of good Y. Bundle M contains 8 units of good X and 21 units of good Y. The consumer is indifferent between bundle L and bundle M. Assume that the consumer's preferences satisfy the four properties of indifference curves. Which of the following correctly expresses the marginal rate of substitution of good X for good Y between these two points?

Accepted Answer

A) The consumer will give up 1 unit of good X to gain 2 units of good Y. 
B) The consumer will give up 2 units of good X to gain 1 unit of good Y. 
C) The price of good X is twice as large as the price of good Y. 
D) The price of good X is half as large as the price of good Y. 
A) The consumer will give up 1 unit of good X to gain 2 units of good Y. 
B) The consumer will give up 2 units of good X to gain 1 unit of good Y. 
C) The price of good X is twice as large as the price of good Y. 
D) The price of good X is half as large as the price of good Y.

Question 5

A good is an inferior good if the consumer buys more of it when

Accepted Answer

A) his income rises. 
B) the price of the good falls. 
C) the price of a substitute good rises. 
D) his income falls. 
A) his income rises. 
B) the price of the good falls. 
C) the price of a substitute good rises. 
D) his income falls.

Question 6

Figure 21-32 The figure shows three indifference curves and a budget constraint for a consumer named Hannah. When young, Hannah works and earns income. When old, she is retired and earns no income.  
-Refer to Figure 21-32. At two of the four labeled points, Hannah is equally happy. Identify those two points.

Accepted Answer

Hannah is

Question 7

Figure 21-14      
-Refer to Figure 21-14. Which of the graphs shown represent indifference curves for perfect complements?

Accepted Answer

A) graph a 
B) graph b 
C) graph c 
D) All of the above are correct. 
A) graph a 
B) graph b 
C) graph c 
D) All of the above are correct.

Question 8

If we observe that Jamie's budget constraint has moved outward, then we know for certain that

Accepted Answer

A) her income must have increased. 
B) she will be indifferent between goods X and Y. 
C) the price of one or both of the goods must have decreased. 
D) she can reach a higher indifference curve. 
A) her income must have increased. 
B) she will be indifferent between goods X and Y. 
C) the price of one or both of the goods must have decreased. 
D) she can reach a higher indifference curve.

Question 9

Higher indifference curves are preferred to lower ones as long as the

Accepted Answer

A) marginal rate of substitution is diminishing. 
B) products in the bundle are "bads" and not "goods." 
C) products in the bundle are "goods" and not "bads." 
D) budget constraint does not shift. 
A) marginal rate of substitution is diminishing. 
B) products in the bundle are "bads" and not "goods." 
C) products in the bundle are "goods" and not "bads." 
D) budget constraint does not shift.

Question 10

The bowed shape of the indifference curve reflects the consumer's

Accepted Answer

A) unwillingness to give up a good that he already has in large quantity. 
B) unwillingness to purchase a good that he already has in large quantity. 
C) greater willingness to give up a good that he already has in large quantity. 
D) greater willingness to purchase a good that he already has in large quantity. 
A) unwillingness to give up a good that he already has in large quantity. 
B) unwillingness to purchase a good that he already has in large quantity. 
C) greater willingness to give up a good that he already has in large quantity. 
D) greater willingness to purchase a good that he already has in large quantity.

Question 11

Figure 21-22  
-Refer to Figure 21-22. If the consumer is currently at point A in the figure, a movement to point B as a result of a decrease in the price of potato chips represents the

Accepted Answer

A) substitution effect. 
B) income effect. 
C) budget effect. 
D) price effect. 
A) substitution effect. 
B) income effect. 
C) budget effect. 
D) price effect.

Question 12

"Left" gloves and "right" gloves provide a good example of

Accepted Answer

A) perfect substitutes. 
B) perfect complements. 
C) negatively sloped indifference curves. 
D) positively sloped indifference curves. 
A) perfect substitutes. 
B) perfect complements. 
C) negatively sloped indifference curves. 
D) positively sloped indifference curves.

Question 13

Suppose the price of good X falls and the consumption of good X increases. From this we can infer that X is a(n) (i)
Normal good.(ii)
Inferior good.(iii)
Giffen good.

Accepted Answer

A) (i) only 
B) (i) or (ii) only 
C) (iii) only 
D) (ii) or (iii) only 
A) (i) only 
B) (i) or (ii) only 
C) (iii) only 
D) (ii) or (iii) only

Question 14

Figure 21-2 The downward-sloping line on the figure represents a consumer's budget
constraint.  
-Refer to Figure 21-2. If the consumer's income is $100, then what is the price of an apple?

Accepted Answer

A) $0.50 
B) $0.75 
C) $1.00 
D) $1.25 
A) $0.50 
B) $0.75 
C) $1.00 
D) $1.25

Question 15

If income decreases and prices are unchanged, the consumer's budget constraint

Accepted Answer

A) remains the same. 
B) shifts outward. 
C) shifts inward. 
D) rotates outward along the horizontal axis. 
A) remains the same. 
B) shifts outward. 
C) shifts inward. 
D) rotates outward along the horizontal axis.

Question 16

Consumers face tradeoffs except at the point where the indifference curve is tangent to the budget line.

Accepted Answer

A) True 
 B)False

Question 17

A consumer's indifference curves are right angles when, for the consumer, the goods in question are __________.

Accepted Answer

The answer of A consumer's indifference curves are right angles...

Question 18

Consider two goods: peanuts and crackers. The slope of the consumer's budget constraint is measured by the

Accepted Answer

A) consumer's income divided by the price of crackers. 
B) relative price of peanuts and crackers. 
C) consumer's marginal rate of substitution. 
D) number of peanuts purchased divided by the number of crackers purchased. 
A) consumer's income divided by the price of crackers. 
B) relative price of peanuts and crackers. 
C) consumer's marginal rate of substitution. 
D) number of peanuts purchased divided by the number of crackers purchased.

Question 19

Figure 21-3
In each case, the budget constraint moves from BC-1 to BC-2.        
-Refer to Figure 21-3. Which of the graphs in the figure reflects an increase in the price of good Y only?

Accepted Answer

A) graph a 
B) graph b 
C) graph c 
D) graph d 
A) graph a 
B) graph b 
C) graph c 
D) graph d

Question 20

Thomas faces prices of $6 for a unit of good X and $30 for a unit of good Y. At his optimum, Thomas is willing to give up 1 unit of good Y for __________ units of good X.

Accepted Answer

The answer of Thomas faces prices of $6 for a...

What is an individual's marginal rate of substitution between nickels and dollar bills? Assume the individual only cares about the monetary value of each bundle.

Figure 21-18 -Refer to Figure 21-18. Bundle B represents a point where

Figure 21-7 -Refer to Figure 21-7. Suppose a consumer has $200 in income, the price of a book is $5, and the price of a DVD is $10. What is the value of B?

A good is an inferior good if the consumer buys more of it when

Figure 21-14 -Refer to Figure 21-14. Which of the graphs shown represent indifference curves for perfect complements?

If we observe that Jamie's budget constraint has moved outward, then we know for certain that

Higher indifference curves are preferred to lower ones as long as the

The bowed shape of the indifference curve reflects the consumer's

Figure 21-22 -Refer to Figure 21-22. If the consumer is currently at point A in the figure, a movement to point B as a result of a decrease in the price of potato chips represents the

"Left" gloves and "right" gloves provide a good example of

Suppose the price of good X falls and the consumption of good X increases. From this we can infer that X is a(n) (i) Normal good.(ii) Inferior good.(iii) Giffen good.

Figure 21-2 The downward-sloping line on the figure represents a consumer's budget constraint. -Refer to Figure 21-2. If the consumer's income is $100, then what is the price of an apple?

If income decreases and prices are unchanged, the consumer's budget constraint

Consumers face tradeoffs except at the point where the indifference curve is tangent to the budget line.

A consumer's indifference curves are right angles when, for the consumer, the goods in question are __________.

Consider two goods: peanuts and crackers. The slope of the consumer's budget constraint is measured by the

Figure 21-3 In each case, the budget constraint moves from BC-1 to BC-2. -Refer to Figure 21-3. Which of the graphs in the figure reflects an increase in the price of good Y only?

Thomas faces prices of $6 for a unit of good X and $30 for a unit of good Y. At his optimum, Thomas is willing to give up 1 unit of good Y for __________ units of good X.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

Frontiers in Microeconomics

Filters

Exam 21: The Theory of Consumer Choice

What is an individual's marginal rate of substitution between nickels and dollar bills? Assume the individual only cares about the monetary value of each bundle.​

Figure 21-18 -Refer to Figure 21-18. Bundle B represents a point where

Figure 21-7 -Refer to Figure 21-7. Suppose a consumer has $200 in income, the price of a book is $5, and the price of a DVD is $10. What is the value of B?

A good is an inferior good if the consumer buys more of it when

Figure 21-14 -Refer to Figure 21-14. Which of the graphs shown represent indifference curves for perfect complements?

If we observe that Jamie's budget constraint has moved outward, then we know for certain that

Higher indifference curves are preferred to lower ones as long as the

The bowed shape of the indifference curve reflects the consumer's

Figure 21-22 -Refer to Figure 21-22. If the consumer is currently at point A in the figure, a movement to point B as a result of a decrease in the price of potato chips represents the

"Left" gloves and "right" gloves provide a good example of

Suppose the price of good X falls and the consumption of good X increases. From this we can infer that X is a(n) (i) Normal good.(ii) Inferior good.(iii) Giffen good.

Figure 21-2 The downward-sloping line on the figure represents a consumer's budget constraint. -Refer to Figure 21-2. If the consumer's income is $100, then what is the price of an apple?

If income decreases and prices are unchanged, the consumer's budget constraint

Consumers face tradeoffs except at the point where the indifference curve is tangent to the budget line.

A consumer's indifference curves are right angles when, for the consumer, the goods in question are __________.

Consider two goods: peanuts and crackers. The slope of the consumer's budget constraint is measured by the

Figure 21-3 In each case, the budget constraint moves from BC-1 to BC-2. -Refer to Figure 21-3. Which of the graphs in the figure reflects an increase in the price of good Y only?

Thomas faces prices of $6 for a unit of good X and $30 for a unit of good Y. At his optimum, Thomas is willing to give up 1 unit of good Y for __________ units of good X.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

Frontiers in Microeconomics

Filters

What is an individual's marginal rate of substitution between nickels and dollar bills? Assume the individual only cares about the monetary value of each bundle.