Question 1

A decrease in the price of a good causes

Accepted Answer

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

Question 2

-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 price-consumption curve?

Accepted Answer

A) 10 snacks and 20 juices 
B) 10 snacks and 0 juices 
C) 10 snacks and 5 juices 
D) 10 snacks and 15 juices 
A) 10 snacks and 20 juices 
B) 10 snacks and 0 juices 
C) 10 snacks and 5 juices 
D) 10 snacks and 15 juices

Question 3

If two goods are perfect substitutes, then the indifference curves for those two goods would be

Accepted Answer

A) upward sloping and concave to the origin. 
B) downward sloping and convex to the origin. 
C) downward sloping and straight. 
D) L-shaped. 
A) upward sloping and concave to the origin. 
B) downward sloping and convex to the origin. 
C) downward sloping and straight. 
D) L-shaped.

Question 4

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. As the price of snacks rises, Bobby's utility

Accepted Answer

A) stays the same. 
B) increases. 
C) decreases. 
D) might change, but there is not enough information to determine. 
A) stays the same. 
B) increases. 
C) decreases. 
D) might change, but there is not enough information to determine.

Question 5

The consumer is in equilibrium when

Accepted Answer

A) MRT = MRS. 
B) Px/Py = MUx/MUy. 
C) the budget line is tangent to the indifference curve at the bundle chosen. 
D) All of the above. 
A) MRT = MRS. 
B) Px/Py = MUx/MUy. 
C) the budget line is tangent to the indifference curve at the bundle chosen. 
D) All of the above.

Question 6

Assume the price of beer is $4, the price of pizza is $10 and the consumer's income is $250. Which consumption bundle will NOT be the consumers choice?

Accepted Answer

A) 5 beers, 5 pizzas 
B) 0 beers, 25 pizzas 
C) 25 beers, 15 pizzas 
D) None of the bundles will be chosen. 
A) 5 beers, 5 pizzas 
B) 0 beers, 25 pizzas 
C) 25 beers, 15 pizzas 
D) None of the bundles will be chosen.

Question 7

The rate at which a consumer must give up y to get one more x is equal to

Accepted Answer

A) -Px/Py. 
B) -Py/Px. 
C) -MUx/MUY 
D) MUy/MUx. 
A) -Px/Py. 
B) -Py/Px. 
C) -MUx/MUY 
D) MUy/MUx.

Question 8

Indifference curves are downward sloping because of the assumption of

Accepted Answer

A) completeness. 
B) transitivity. 
C) more is better. 
D) All of the above. 
A) completeness. 
B) transitivity. 
C) more is better. 
D) All of the above.

Question 9

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

Question 10

An individual's demand curve for a good can be derived by measuring the quantities selected as

Accepted Answer

A) the price of the good changes. 
B) the prices of substitute goods change. 
C) income changes. 
D) All of the above. 
A) the price of the good changes. 
B) the prices of substitute goods change. 
C) income changes. 
D) All of the above.

Question 11

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. As the price of snacks rises, the price for juice

Accepted Answer

A) stays the same. 
B) increases. 
C) decreases 
D) might change, but there is not enough information to determine. 
A) stays the same. 
B) increases. 
C) decreases 
D) might change, but there is not enough information to determine.

A decrease 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 price-consumption curve?

If two goods are perfect substitutes, then the indifference curves for those two goods would be

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. As the price of snacks rises, Bobby's utility

The consumer is in equilibrium when

Assume the price of beer is $4, the price of pizza is $10 and the consumer's income is $250. Which consumption bundle will NOT be the consumers choice?

The rate at which a consumer must give up y to get one more x is equal to

Indifference curves are downward sloping because of the assumption of

The marginal rate of transformation of y for x represents

An individual's demand curve for a good can be derived by measuring the quantities selected as

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. As the price of snacks rises, the price for juice

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

A decrease 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 price-consumption curve?

If two goods are perfect substitutes, then the indifference curves for those two goods would be

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. As the price of snacks rises, Bobby's utility

The consumer is in equilibrium when

Assume the price of beer is $4, the price of pizza is $10 and the consumer's income is $250. Which consumption bundle will NOT be the consumers choice?

The rate at which a consumer must give up y to get one more x is equal to

Indifference curves are downward sloping because of the assumption of

The marginal rate of transformation of y for x represents

An individual's demand curve for a good can be derived by measuring the quantities selected as

-The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. As the price of snacks rises, the price for juice

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