Question 1

When the price of a good changes, the change in consumption that leaves the consumer indifferent between the two choices is called the

Accepted Answer

A) normal effect. 
B) substitution effect. 
C) income effect. 
D) price effect. 
E) inferior effect. 
A) normal effect. 
B) substitution effect. 
C) income effect. 
D) price effect. 
E) inferior effect.

Question 2

A constant marginal rate of substitution between two goods implies

Accepted Answer

A) the goods are perfect complements. 
B) the goods are imperfect substitutes. 
C) the goods are both inferior. 
D) one good is normal and one good is inferior. 
E) the goods are perfect substitutes. 
A) the goods are perfect complements. 
B) the goods are imperfect substitutes. 
C) the goods are both inferior. 
D) one good is normal and one good is inferior. 
E) the goods are perfect substitutes.

Question 3

When the iPhone5 was introduced, the demand for iPhone5 protective cases increased.This information tells us that the iPhone5 and iPhone5 protective cases are

Accepted Answer

A) substitutes and their indifference curves are close to straight lines. 
B) substitutes and their indifference curves are close to L-shaped. 
C) complements and their indifference curves are close to L-shaped. 
D) complements and their indifference curves have a constant marginal rate of substitution. 
E) substitutes and their indifference curves have a constant marginal rate of substitution. 
A) substitutes and their indifference curves are close to straight lines. 
B) substitutes and their indifference curves are close to L-shaped. 
C) complements and their indifference curves are close to L-shaped. 
D) complements and their indifference curves have a constant marginal rate of substitution. 
E) substitutes and their indifference curves have a constant marginal rate of substitution.

Question 4

Sarah has an income of $100.She purchases 5 pizzas at $10 each and 10 subs at $5 each.Then the government taxes subs, and the price rises to $10 each.Simultaneously, the government gives Sarah a grant of $50 in income to make up for this change.As a result, Sarah's budget line

Accepted Answer

A) becomes steeper. 
B) becomes flatter. 
C) shifts leftward and parallel to the original budget line. 
D) shifts rightward and parallel to the original budget line. 
E) swivels around the original consumption choice. 
A) becomes steeper. 
B) becomes flatter. 
C) shifts leftward and parallel to the original budget line. 
D) shifts rightward and parallel to the original budget line. 
E) swivels around the original consumption choice.

When the price of a good changes, the change in consumption that leaves the consumer indifferent between the two choices is called the

A constant marginal rate of substitution between two goods implies

When the iPhone5 was introduced, the demand for iPhone5 protective cases increased.This information tells us that the iPhone5 and iPhone5 protective cases are

Sarah has an income of $100.She purchases 5 pizzas at $10 each and 10 subs at $5 each.Then the government taxes subs, and the price rises to $10 each.Simultaneously, the government gives Sarah a grant of $50 in income to make up for this change.As a result, Sarah's budget line

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government 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

Filters

Exam 9: Possibilities, Preferences, and Choices

When the price of a good changes, the change in consumption that leaves the consumer indifferent between the two choices is called the

A constant marginal rate of substitution between two goods implies

When the iPhone5 was introduced, the demand for iPhone5 protective cases increased.This information tells us that the iPhone5 and iPhone5 protective cases are

Sarah has an income of $100.She purchases 5 pizzas at $10 each and 10 subs at $5 each.Then the government taxes subs, and the price rises to $10 each.Simultaneously, the government gives Sarah a grant of $50 in income to make up for this change.As a result, Sarah's budget line

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government 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

Filters