Question 1

Which of the following might explain the evidence of an endowment effect in behavioral economics?

Accepted Answer

A) government regulation 
B) knowledge and experience 
C) the federal tax code 
D) class envy 
A) government regulation 
B) knowledge and experience 
C) the federal tax code 
D) class envy

Question 2

Clifford lives by the motto "Eat, drink, and be merry today, for tomorrow doesn't matter." If today's consumption is represented by "x" and tomorrow's consumption is represented by "y," then which of the following best represents Clifford's utility function?

Accepted Answer

A) U = x - y 
B) U = x/y 
C) U = x 
D) U = y 
A) U = x - y 
B) U = x/y 
C) U = x 
D) U = y

Question 3

-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 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

If Fred's marginal rate of substitution of salad for pizza equals 5, then

Accepted Answer

A) he would give up 5 pizzas to get the next salad. 
B) he would give up 5 salads to get the next pizza. 
C) he will eat five times as much pizza as salad. 
D) he will eat five times as much salad as pizza. 
A) he would give up 5 pizzas to get the next salad. 
B) he would give up 5 salads to get the next pizza. 
C) he will eat five times as much pizza as salad. 
D) he will eat five times as much salad as pizza.

Question 6

Joe's income is $500, the price of food (F, y-axis)is $2 per unit, and the price of shelter (S, x-axis)is $100. Which of the following represents his budget constraint?

Accepted Answer

A) 500 = 100F + 2S 
B) 500 = 2F + 100S 
C) S = 500 - 2F 
D) All of the above. 
A) 500 = 100F + 2S 
B) 500 = 2F + 100S 
C) S = 500 - 2F 
D) All of the above.

Question 7

Adrian's total utilities of two consumption bundles are 50 and 100. 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.

Which of the following might explain the evidence of an endowment effect in behavioral economics?

Clifford lives by the motto "Eat, drink, and be merry today, for tomorrow doesn't matter." If today's consumption is represented by "x" and tomorrow's consumption is represented by "y," then which of the following best represents Clifford's utility function?

-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?

An increase in the price of a good causes

If Fred's marginal rate of substitution of salad for pizza equals 5, then

Joe's income is $500, the price of food (F, y-axis)is $2 per unit, and the price of shelter (S, x-axis)is $100. Which of the following represents his budget constraint?

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

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

Which of the following might explain the evidence of an endowment effect in behavioral economics?

Clifford lives by the motto "Eat, drink, and be merry today, for tomorrow doesn't matter." If today's consumption is represented by "x" and tomorrow's consumption is represented by "y," then which of the following best represents Clifford's utility function?

-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?

An increase in the price of a good causes

If Fred's marginal rate of substitution of salad for pizza equals 5, then

Joe's income is $500, the price of food (F, y-axis)is $2 per unit, and the price of shelter (S, x-axis)is $100. Which of the following represents his budget constraint?

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

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