Question 1

A budget constraint illustrates the

Accepted Answer

A) prices that a consumer chooses to pay for products he consumes. 
B) purchases made by consumers. 
C) consumption bundles that a consumer can afford. 
D) consumption bundles that give a consumer equal satisfaction. 
A) prices that a consumer chooses to pay for products he consumes. 
B) purchases made by consumers. 
C) consumption bundles that a consumer can afford. 
D) consumption bundles that give a consumer equal satisfaction.

Question 2

Figure 21-18  
-Refer to Figure 21-18. It would be possible for the consumer to reach I2 if

Accepted Answer

A) the price of Y decreases. 
B) the price of X decreases. 
C) income increases. 
D) All of the above would be correct. 
A) the price of Y decreases. 
B) the price of X decreases. 
C) income increases. 
D) All of the above would be correct.

Question 3

Figure 21-7  
-Refer to Figure 21-7. Suppose a consumer has $500 in income, the price of a book is $10, and the value of B is 50. What is the price of a DVD?

Accepted Answer

A) $5 
B) $10 
C) $50 
D) $100 
A) $5 
B) $10 
C) $50 
D) $100

Question 4

Suppose a consumer is currently spending all of her available income on two goods: music CDs and DVDs. If the price of a CD is $9, the price of a DVD is $18, and she is currently consuming 10 CDs and 5 DVDs, what is the consumer's income?

Accepted Answer

A) $90 
B) $180 
C) $270 
D) $360 
A) $90 
B) $180 
C) $270 
D) $360

Question 5

The goal of the consumer is to

Accepted Answer

A) maximize utility. 
B) minimize expenses. 
C) spend more income in the current time period than in the future. 
D) All of the above are the goals of the consumer. 
A) maximize utility. 
B) minimize expenses. 
C) spend more income in the current time period than in the future. 
D) All of the above are the goals of the consumer.

Question 6

​Suppose Alyssa likes oranges twice as much as apples, no matter how many apples or oranges she has. Her indifference curves for oranges and apples

Accepted Answer

A) ​are right angles. 
B) ​are straight lines. 
C) ​slope upward. 
D) ​cross one another at certain points. 
A) ​are right angles. 
B) ​are straight lines. 
C) ​slope upward. 
D) ​cross one another at certain points.

Question 7

Pepsi and pizza are normal goods. When the price of pizza falls, the substitution effect by itself will cause a

Accepted Answer

A) shift to a lower indifference curve so that the consumer buys less Pepsi. 
B) shift to a higher indifference curve so that the consumer buys more Pepsi. 
C) movement along the indifference curve so that the consumer buys more Pepsi. 
D) movement along the indifference curve so that the consumer buys less Pepsi. 
A) shift to a lower indifference curve so that the consumer buys less Pepsi. 
B) shift to a higher indifference curve so that the consumer buys more Pepsi. 
C) movement along the indifference curve so that the consumer buys more Pepsi. 
D) movement along the indifference curve so that the consumer buys less Pepsi.

Question 8

Giffen goods have positively-sloped demand curves because they are

Accepted Answer

A) inferior goods with no substitution effect. 
B) normal goods with no substitution effect. 
C) inferior goods for which the substitution effect outweighs the income effect. 
D) inferior goods for which the income effect outweighs the substitution effect. 
A) inferior goods with no substitution effect. 
B) normal goods with no substitution effect. 
C) inferior goods for which the substitution effect outweighs the income effect. 
D) inferior goods for which the income effect outweighs the substitution effect.

A budget constraint illustrates the

Figure 21-18 -Refer to Figure 21-18. It would be possible for the consumer to reach I₂ if

Figure 21-7 -Refer to Figure 21-7. Suppose a consumer has $500 in income, the price of a book is $10, and the value of B is 50. What is the price of a DVD?

Suppose a consumer is currently spending all of her available income on two goods: music CDs and DVDs. If the price of a CD is $9, the price of a DVD is $18, and she is currently consuming 10 CDs and 5 DVDs, what is the consumer's income?

The goal of the consumer is to

Suppose Alyssa likes oranges twice as much as apples, no matter how many apples or oranges she has. Her indifference curves for oranges and apples

Pepsi and pizza are normal goods. When the price of pizza falls, the substitution effect by itself will cause a

Giffen goods have positively-sloped demand curves because they are

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

A budget constraint illustrates the

Figure 21-18 -Refer to Figure 21-18. It would be possible for the consumer to reach I2 if

Figure 21-7 -Refer to Figure 21-7. Suppose a consumer has $500 in income, the price of a book is $10, and the value of B is 50. What is the price of a DVD?

Suppose a consumer is currently spending all of her available income on two goods: music CDs and DVDs. If the price of a CD is $9, the price of a DVD is $18, and she is currently consuming 10 CDs and 5 DVDs, what is the consumer's income?

The goal of the consumer is to

​Suppose Alyssa likes oranges twice as much as apples, no matter how many apples or oranges she has. Her indifference curves for oranges and apples

Pepsi and pizza are normal goods. When the price of pizza falls, the substitution effect by itself will cause a

Giffen goods have positively-sloped demand curves because they are

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

Figure 21-18 -Refer to Figure 21-18. It would be possible for the consumer to reach I₂ if

Suppose Alyssa likes oranges twice as much as apples, no matter how many apples or oranges she has. Her indifference curves for oranges and apples