Question 1

Indifference curves on the same indifference map can have different shapes.

Accepted Answer

A) True 
 B)False

Question 2

Draw the indifference curves for rock concerts and food for each of the following:
(a)a typical 17-year-old
(b)a typical 75-year-old

Accepted Answer

@#IMG-DLM& See the above figure.These gr

Question 3

-Joe's indifference map for lobster and soda is shown in the above figure along with his budget line.Will Joe choose point a? Explain your answer in terms both of MRS and the level of utility.

Accepted Answer

Joe will not choose point a.Since the sl

Question 4

-Keith is indifferent between canned soup and fresh soup.In the figure above,Keith's indifference curves are represented by I1,I2,I3,and I4 curves.What is Keith's utility maximization choice?

Accepted Answer

A)  4 canned soups and 4 fresh soups 
B)  4 canned soups and 2 fresh soups 
C)  only 4 canned soups 
D)  only 2 fresh soups 
A)  4 canned soups and 4 fresh soups 
B)  4 canned soups and 2 fresh soups 
C)  only 4 canned soups 
D)  only 2 fresh soups

Question 5

Behavioral economists have discovered that

Accepted Answer

A)  transitivity of preferences always holds, even in animals. 
B)  the law of demand does not hold in controlled experiments. 
C)  transitivity of preferences does not always hold, especially for young people. 
D)  reflexivity of preferences is not true. 
A)  transitivity of preferences always holds, even in animals. 
B)  the law of demand does not hold in controlled experiments. 
C)  transitivity of preferences does not always hold, especially for young people. 
D)  reflexivity of preferences is not true.

Question 6

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)  -   /   . 
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)  -   /   . 
D)  All of the above.

Question 7

Lisa consumes only pizzas (P)and burritos (B).Her utility function is U = P0.5 B0.5.The price of per pizza is $10 and the price per burrito is $5.In equilibrium,Lisa consumes 4 pizzas.Using Lisa's utility function,calculate how many burritos she consumes.

Accepted Answer

The marginal utility of pizza equals B^0.5/2

Question 8

If the utility function (U)between food (F)and clothing (C)can be represented as U =   ,the marginal rate of substitution of clothing for food equals

Accepted Answer

A)  -C/F. 
B)  -F/C. 
C)  -   . 
D)  -   . 
A)  -C/F. 
B)  -F/C. 
C)  -   . 
D)  -   .

Question 9

Indifference curves that are thick violate

Accepted Answer

A)  the assumption of transitivity. 
B)  the assumption that more is better. 
C)  the assumption of completeness. 
D)  none of the assumptions. 
A)  the assumption of transitivity. 
B)  the assumption that more is better. 
C)  the assumption of completeness. 
D)  none of the assumptions.

Question 10

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 11

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = x,then it can be concluded that

Accepted Answer

A)  "x" and "y" are perfect complements. 
B)  "y" is a "bad". 
C)  the indifference curves on the x,y graph are upward sloping. 
D)  the indifference curves on the x,y graph are vertical. 
A)  "x" and "y" are perfect complements. 
B)  "y" is a "bad". 
C)  the indifference curves on the x,y graph are upward sloping. 
D)  the indifference curves on the x,y graph are vertical.

Question 12

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.What happens if Max's mother gives him 10 pounds of burger?

Accepted Answer

A)  Max would have preferred receiving the dollar value of the burger. 
B)  Max is indifferent between this gift and the dollar value of the burger. 
C)  Max prefers this gift to the dollar value of the burger. 
D)  None of the above. 
A)  Max would have preferred receiving the dollar value of the burger. 
B)  Max is indifferent between this gift and the dollar value of the burger. 
C)  Max prefers this gift to the dollar value of the burger. 
D)  None of the above.

Question 13

The assumption of completeness means that

Accepted Answer

A)  the consumer can rank all possible consumption bundles. 
B)  more of a good is always better. 
C)  the consumers can rank all affordable consumption bundles. 
D)  all preferences conditions are met. 
A)  the consumer can rank all possible consumption bundles. 
B)  more of a good is always better. 
C)  the consumers can rank all affordable consumption bundles. 
D)  all preferences conditions are met.

Question 14

Utility is the set of numerical values that

Accepted Answer

A)  yields an absolute level of pleasure from a bundle of goods. 
B)  reflects the relative ranking of various bundles of goods. 
C)  describes how much more a consumer prefers one bundle to another. 
D)  yields a cardinal ranking of bundles. 
A)  yields an absolute level of pleasure from a bundle of goods. 
B)  reflects the relative ranking of various bundles of goods. 
C)  describes how much more a consumer prefers one bundle to another. 
D)  yields a cardinal ranking of bundles.

Question 15

Behavioral economics extends traditional economic models by

Accepted Answer

A)  including insights from psychology and human cognition models. 
B)  modeling behavior rather than prices. 
C)  admitting that individuals are irrational. 
D)  admitting that incentives are very important. 
A)  including insights from psychology and human cognition models. 
B)  modeling behavior rather than prices. 
C)  admitting that individuals are irrational. 
D)  admitting that incentives are very important.

Question 16

Those who criticize individuals who choose to drive a relatively inefficient sport utility vehicle (SUV)might mistakenly

Accepted Answer

A)  assume everyone faces the same relative prices. 
B)  assume everyone has the same preference set. 
C)  assume everyone has the same budget constraint. 
D)  All of the above. 
A)  assume everyone faces the same relative prices. 
B)  assume everyone has the same preference set. 
C)  assume everyone has the same budget constraint. 
D)  All of the above.

Question 17

Data shows that United States college students purchase more e-books than German college students.Assuming that all students have identical preferences for e-books and textbooks,what is the likely explanation for this result?

Accepted Answer

A)  Taxes on textbooks are higher in the United States than taxes on textbooks in Germany. 
B)  Taxes on textbooks are lower in the United States than taxes on textbooks in Germany. 
C)  The price of textbooks is cheaper in the United States than textbooks in Germany. 
D)  Both A and C. 
A)  Taxes on textbooks are higher in the United States than taxes on textbooks in Germany. 
B)  Taxes on textbooks are lower in the United States than taxes on textbooks in Germany. 
C)  The price of textbooks is cheaper in the United States than textbooks in Germany. 
D)  Both A and C.

Question 18

If both prices decreases by 50%,

Accepted Answer

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

Question 19

If MRS > MRT,then the consumer is better off than at equilibrium.

Accepted Answer

A) True 
 B)False

Question 20

The intuition behind the budget constraint is that

Accepted Answer

A)  more options are preferred to less. 
B)  money is the root of all happiness. 
C)  information is power. 
D)  scarcity is avoidable with prosperity. 
A)  more options are preferred to less. 
B)  money is the root of all happiness. 
C)  information is power. 
D)  scarcity is avoidable with prosperity.

Indifference curves on the same indifference map can have different shapes.

Draw the indifference curves for rock concerts and food for each of the following: (a)a typical 17-year-old (b)a typical 75-year-old

-Joe's indifference map for lobster and soda is shown in the above figure along with his budget line.Will Joe choose point a? Explain your answer in terms both of MRS and the level of utility.

-Keith is indifferent between canned soup and fresh soup.In the figure above,Keith's indifference curves are represented by I1,I2,I3,and I4 curves.What is Keith's utility maximization choice?

Behavioral economists have discovered that

The marginal rate of transformation of y for x represents

Lisa consumes only pizzas (P)and burritos (B).Her utility function is U = P^0.5 B^0.5.The price of per pizza is $10 and the price per burrito is $5.In equilibrium,Lisa consumes 4 pizzas.Using Lisa's utility function,calculate how many burritos she consumes.

If the utility function (U)between food (F)and clothing (C)can be represented as U = ,the marginal rate of substitution of clothing for food equals

Indifference curves that are thick violate

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

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = x,then it can be concluded that

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.What happens if Max's mother gives him 10 pounds of burger?

The assumption of completeness means that

Utility is the set of numerical values that

Behavioral economics extends traditional economic models by

Those who criticize individuals who choose to drive a relatively inefficient sport utility vehicle (SUV)might mistakenly

Data shows that United States college students purchase more e-books than German college students.Assuming that all students have identical preferences for e-books and textbooks,what is the likely explanation for this result?

If both prices decreases by 50%,

If MRS > MRT,then the consumer is better off than at equilibrium.

The intuition behind the budget constraint is that

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 4: Consumer Choice

Indifference curves on the same indifference map can have different shapes.

Draw the indifference curves for rock concerts and food for each of the following: (a)a typical 17-year-old (b)a typical 75-year-old

-Joe's indifference map for lobster and soda is shown in the above figure along with his budget line.Will Joe choose point a? Explain your answer in terms both of MRS and the level of utility.

-Keith is indifferent between canned soup and fresh soup.In the figure above,Keith's indifference curves are represented by I1,I2,I3,and I4 curves.What is Keith's utility maximization choice?

Behavioral economists have discovered that

The marginal rate of transformation of y for x represents

Lisa consumes only pizzas (P)and burritos (B).Her utility function is U = P0.5 B0.5.The price of per pizza is $10 and the price per burrito is $5.In equilibrium,Lisa consumes 4 pizzas.Using Lisa's utility function,calculate how many burritos she consumes.

If the utility function (U)between food (F)and clothing (C)can be represented as U = ,the marginal rate of substitution of clothing for food equals

Indifference curves that are thick violate

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

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis,if the utility for the two goods "x" and "y" can be measured as U = x,then it can be concluded that

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.What happens if Max's mother gives him 10 pounds of burger?

The assumption of completeness means that

Utility is the set of numerical values that

Behavioral economics extends traditional economic models by

Those who criticize individuals who choose to drive a relatively inefficient sport utility vehicle (SUV)might mistakenly

Data shows that United States college students purchase more e-books than German college students.Assuming that all students have identical preferences for e-books and textbooks,what is the likely explanation for this result?

If both prices decreases by 50%,

If MRS > MRT,then the consumer is better off than at equilibrium.

The intuition behind the budget constraint is that

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Lisa consumes only pizzas (P)and burritos (B).Her utility function is U = P^0.5 B^0.5.The price of per pizza is $10 and the price per burrito is $5.In equilibrium,Lisa consumes 4 pizzas.Using Lisa's utility function,calculate how many burritos she consumes.