Question 1

If two indifference curves were to intersect at a point, this would violate the assumption of

Accepted Answer

A) transitivity. 
B) completeness. 
C) Both A and B above. 
D) None of the above. 
A) transitivity. 
B) completeness. 
C) Both A and B above. 
D) None of the above. A

Question 2

A consumer's willingness to trade one good for another can be expressed by the consumer's

Accepted Answer

A) indifference curve. 
B) marginal rate of substitution. 
C) Both A and B above. 
D) None of the above. 
A) indifference curve. 
B) marginal rate of substitution. 
C) Both A and B above. 
D) None of the above. C

Question 3

In behavioral economics, salience is best exemplified by

Accepted Answer

A) consumers responding differently when posted prices increase rather than when prices increase because of sales tax increases. 
B) consumers responding the same regardless of how prices change. 
C) the end of a controlled experiment. 
D) consumers responding differently when income increases permanently rather than temporarily. 
A) consumers responding differently when posted prices increase rather than when prices increase because of sales tax increases. 
B) consumers responding the same regardless of how prices change. 
C) the end of a controlled experiment. 
D) consumers responding differently when income increases permanently rather than temporarily. A

Question 4

An increase in the price of a good causes

Accepted Answer

A) a change in the slope of the budget line. 
B) an increase in the consumption of that good. 
C) a rightward shift of the demand curve for that good. 
D) a parallel rightward shift of the budget line. 
A) a change in the slope of the budget line. 
B) an increase in the consumption of that good. 
C) a rightward shift of the demand curve for that good. 
D) a parallel rightward shift of the budget line.

Question 5

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks assuming he has $20 to spend on these goods. Which of the following points are on Bobby's demand curve for snacks?

Accepted Answer

A) p = 2, q = 10 
B) p = 2, q = 13 
C) p = 2, q = 5 
D) p = 1, q = 20 
A) p = 2, q = 10 
B) p = 2, q = 13 
C) p = 2, q = 5 
D) p = 1, q = 20

Question 6

Betty consumes good x and good y. If the price of x = $3 and the price of y = $4, then

Accepted Answer

A) an extra unit of x costs 4/3 units of y. 
B) an extra unit of y costs 4/3 units of x. 
C) an extra unit of x costs 3/4 units of y. 
D) Both B and C. 
A) an extra unit of x costs 4/3 units of y. 
B) an extra unit of y costs 4/3 units of x. 
C) an extra unit of x costs 3/4 units of y. 
D) Both B and C.

Question 7

There is an indifference curve through every bundle because of the assumption of

Accepted Answer

A) transitivity. 
B) completeness. 
C) rationality. 
D) nonsatiation. 
A) transitivity. 
B) completeness. 
C) rationality. 
D) nonsatiation.

Question 8

If more is better, how can you explain that more pollution doesn't violate this principle?

Accepted Answer

When dealing with a "bad," we recast it

Question 9

Adrian's utilities of two consumption bundles are 50 and 100 respectively. This implies that

Accepted Answer

A) Adrian prefers the first bundle. 
B) Adrian prefers the second bundle. 
C) Adrian likes the second bundle twice as much. 
D) Adrian likes the first bundle twice as much. 
A) Adrian prefers the first bundle. 
B) Adrian prefers the second bundle. 
C) Adrian likes the second bundle twice as much. 
D) Adrian likes the first bundle twice as much.

Question 10

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. Bobby's demand for snacks is

Accepted Answer

A) unit elastic. 
B) elastic. 
C) inelastic. 
D) perfectly elastic. 
A) unit elastic. 
B) elastic. 
C) inelastic. 
D) perfectly elastic.

Question 11

Indifference curves close to the origin are ________ those farther from the origin because of ________.

Accepted Answer

A) better than; transitivity 
B) worse than; nonsatiation 
C) better than; completeness 
D) worse than; transitivity 
A) better than; transitivity 
B) worse than; nonsatiation 
C) better than; completeness 
D) worse than; transitivity

Question 12

The marginal rate of transformation of y for x represents

Accepted Answer

A) the slope of the budget constraint. 
B) the rate at which the consumer must give up y to get one more x. 
C) -Px/Py. 
D) All of the above. 
A) the slope of the budget constraint. 
B) the rate at which the consumer must give up y to get one more x. 
C) -Px/Py. 
D) All of the above.

Question 13

If the consumer's income increases while the prices of both goods remain unchanged, what will happen to the budget line?

Accepted Answer

A) The budget line rotates inward from the intercept on the horizontal axis. 
B) The budget line rotates outward from the intercept on the vertical axis. 
C) The budget line shifts inward without a change in slope. 
D) The budget line shifts outward without a change in slope. 
A) The budget line rotates inward from the intercept on the horizontal axis. 
B) The budget line rotates outward from the intercept on the vertical axis. 
C) The budget line shifts inward without a change in slope. 
D) The budget line shifts outward without a change in slope.

Question 14

If Isabella buys two goods and the prices of both goods decrease by 50%,

Accepted Answer

A) the budget constraint will be unchanged. 
B) the slope of the budget constraint will increase. 
C) the slope of the budget constraint will decrease. 
D) the budget constraint will shift outward in a parallel fashion. 
A) the budget constraint will be unchanged. 
B) the slope of the budget constraint will increase. 
C) the slope of the budget constraint will decrease. 
D) the budget constraint will shift outward in a parallel fashion.

Question 15

An indifference curve represents bundles of goods that a consumer

Accepted Answer

A) views as equally desirable. 
B) ranks from most preferred to least preferred. 
C) prefers to any other bundle of goods. 
D) All of the above. 
A) views as equally desirable. 
B) ranks from most preferred to least preferred. 
C) prefers to any other bundle of goods. 
D) All of the above.

Question 16

If a consumer prefers apples to bananas and prefers bananas to citrus fruit, in order to satisfy assumptions about preferences she has to prefer

Accepted Answer

A) bananas to apples. 
B) citrus fruit to bananas. 
C) apples to citrus fruit. 
D) citrus fruit to apples. 
A) bananas to apples. 
B) citrus fruit to bananas. 
C) apples to citrus fruit. 
D) citrus fruit to apples.

Question 17

Consumers allocate their budgets among bundles because

Accepted Answer

A) more is not always better. 
B) bundles are the most efficient way to package goods and services. 
C) consumers face choices and trade-offs. 
D) they want to minimize trips to the store. 
A) more is not always better. 
B) bundles are the most efficient way to package goods and services. 
C) consumers face choices and trade-offs. 
D) they want to minimize trips to the store.

Question 18

If a consumer weakly prefers pizza to hot dogs, and weakly prefers hot dogs to chicken, then he ________ pizza ________ chicken.

Accepted Answer

A) likes; less than 
B) likes; at least as much as 
C) dislikes; more than 
D) dislikes; and is indifferent about 
A) likes; less than 
B) likes; at least as much as 
C) dislikes; more than 
D) dislikes; and is indifferent about

Question 19

By selecting a bundle where MRS = MRT, the consumer is saying

Accepted Answer

A) "I value my last unit of each good equally." 
B) "I am willing to trade one good for the other at the same rate that I am required to do so." 
C) "I will equate the amounts spent on all goods consumed." 
D) All of the above. 
A) "I value my last unit of each good equally." 
B) "I am willing to trade one good for the other at the same rate that I am required to do so." 
C) "I will equate the amounts spent on all goods consumed." 
D) All of the above.

Question 20

Convexity of indifference curves implies that consumers are willing to

Accepted Answer

A) give up more "y" to get an extra "x" the more "x" they have. 
B) give up more "y" to get an extra "x" the less "x" they have. 
C) settle for less of both "x" and "y." 
D) acquire more "x" only if they do not have to give up any "y." 
A) give up more "y" to get an extra "x" the more "x" they have. 
B) give up more "y" to get an extra "x" the less "x" they have. 
C) settle for less of both "x" and "y." 
D) acquire more "x" only if they do not have to give up any "y."

If two indifference curves were to intersect at a point, this would violate the assumption of

A consumer's willingness to trade one good for another can be expressed by the consumer's

In behavioral economics, salience is best exemplified by

An increase in the price of a good causes

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks assuming he has $20 to spend on these goods. Which of the following points are on Bobby's demand curve for snacks?

Betty consumes good x and good y. If the price of x = $3 and the price of y = $4, then

There is an indifference curve through every bundle because of the assumption of

If more is better, how can you explain that more pollution doesn't violate this principle?

Adrian's utilities of two consumption bundles are 50 and 100 respectively. This implies that

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. Bobby's demand for snacks is

Indifference curves close to the origin are those farther from the origin because of .

The marginal rate of transformation of y for x represents

If the consumer's income increases while the prices of both goods remain unchanged, what will happen to the budget line?

If Isabella buys two goods and the prices of both goods decrease by 50%,

An indifference curve represents bundles of goods that a consumer

If a consumer prefers apples to bananas and prefers bananas to citrus fruit, in order to satisfy assumptions about preferences she has to prefer

Consumers allocate their budgets among bundles because

If a consumer weakly prefers pizza to hot dogs, and weakly prefers hot dogs to chicken, then he pizza chicken.

By selecting a bundle where MRS = MRT, the consumer is saying

Convexity of indifference curves implies that consumers are willing to

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 4: Consumer Choice

If two indifference curves were to intersect at a point, this would violate the assumption of

A consumer's willingness to trade one good for another can be expressed by the consumer's

In behavioral economics, salience is best exemplified by

An increase in the price of a good causes

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks assuming he has $20 to spend on these goods. Which of the following points are on Bobby's demand curve for snacks?

Betty consumes good x and good y. If the price of x = $3 and the price of y = $4, then

There is an indifference curve through every bundle because of the assumption of

If more is better, how can you explain that more pollution doesn't violate this principle?

Adrian's utilities of two consumption bundles are 50 and 100 respectively. This implies that

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. Bobby's demand for snacks is

Indifference curves close to the origin are ________ those farther from the origin because of ________.

The marginal rate of transformation of y for x represents

If the consumer's income increases while the prices of both goods remain unchanged, what will happen to the budget line?

If Isabella buys two goods and the prices of both goods decrease by 50%,

An indifference curve represents bundles of goods that a consumer

If a consumer prefers apples to bananas and prefers bananas to citrus fruit, in order to satisfy assumptions about preferences she has to prefer

Consumers allocate their budgets among bundles because

If a consumer weakly prefers pizza to hot dogs, and weakly prefers hot dogs to chicken, then he ________ pizza ________ chicken.

By selecting a bundle where MRS = MRT, the consumer is saying

Convexity of indifference curves implies that consumers are willing to

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Indifference curves close to the origin are those farther from the origin because of .

If a consumer weakly prefers pizza to hot dogs, and weakly prefers hot dogs to chicken, then he pizza chicken.