Question 1

A change in the price of a good has

Accepted Answer

A) an income effect only. 
B) a substitution effect only. 
C) a substitution effect and an income effect. 
D) an income effect that exceeds the substitution effect. 
E) a substitution effect that exceeds the income effect. 
A) an income effect only. 
B) a substitution effect only. 
C) a substitution effect and an income effect. 
D) an income effect that exceeds the substitution effect. 
E) a substitution effect that exceeds the income effect.

Question 2

Which one of the following statements is true about the indifference curves for two goods that are perfect substitutes?

Accepted Answer

A) The indifference curves are negatively-sloped straight lines. 
B) The indifference curves are L-shaped. 
C) The marginal rate of substitution is zero. 
D) The indifference curves are positively-sloped straight lines. 
E) The marginal rate of substitution is infinity. 
A) The indifference curves are negatively-sloped straight lines. 
B) The indifference curves are L-shaped. 
C) The marginal rate of substitution is zero. 
D) The indifference curves are positively-sloped straight lines. 
E) The marginal rate of substitution is infinity.

Question 3

As a consumer moves rightward along an indifference curve,

Accepted Answer

A) the relative price of the good measured on the x-axis falls. 
B) the relative price of the good measured on the y-axis falls. 
C) the income required to buy the combinations of the goods increases. 
D) the consumer remains indifferent among the different combinations of goods. 
E) the consumer prefers the combinations of goods that are farther rightward along the indifference curve. 
A) the relative price of the good measured on the x-axis falls. 
B) the relative price of the good measured on the y-axis falls. 
C) the income required to buy the combinations of the goods increases. 
D) the consumer remains indifferent among the different combinations of goods. 
E) the consumer prefers the combinations of goods that are farther rightward along the indifference curve.

Question 4

A consumer choosing between apples and oranges is at her best affordable point. Then the price of apples decreases. If both apples and oranges are normal goods, which one of the following statements is true about her new best affordable point?

Accepted Answer

A) She will consume more apples and more oranges. 
B) She will consume more apples and fewer oranges. 
C) She will consume fewer apples and more oranges. 
D) She will consume fewer apples and fewer oranges. 
E) She will consume more apples, and we do not know whether she will consume more or less oranges. 
A) She will consume more apples and more oranges. 
B) She will consume more apples and fewer oranges. 
C) She will consume fewer apples and more oranges. 
D) She will consume fewer apples and fewer oranges. 
E) She will consume more apples, and we do not know whether she will consume more or less oranges.

A change in the price of a good has

Which one of the following statements is true about the indifference curves for two goods that are perfect substitutes?

As a consumer moves rightward along an indifference curve,

A consumer choosing between apples and oranges is at her best affordable point. Then the price of apples decreases. If both apples and oranges are normal goods, which one of the following statements is true about her new best affordable point?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Governments Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Macro Only: International Trade Policy

Filters

Exam 9: Possibilities, Preferences, and Choices

A change in the price of a good has

Which one of the following statements is true about the indifference curves for two goods that are perfect substitutes?

As a consumer moves rightward along an indifference curve,

A consumer choosing between apples and oranges is at her best affordable point. Then the price of apples decreases. If both apples and oranges are normal goods, which one of the following statements is true about her new best affordable point?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Governments Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Macro Only: International Trade Policy

Filters