Question 1

If a person's indifference curves can be represented as a straight line,the person views the goods as

Accepted Answer

A)  perfect substitutes 
B)  perfect complements 
C)  complements (but not perfect) 
D)  substitutes (but not perfect) 
A)  perfect substitutes 
B)  perfect complements 
C)  complements (but not perfect) 
D)  substitutes (but not perfect) A

Question 2

As an individual moves northwest along his or her indifference curve substituting more and more Y for X,his or her MRS of X for Y

Accepted Answer

A)  increases. 
B)  decreases. 
C)  stays the same. 
D)  changes in a way that cannot be determined. 
A)  increases. 
B)  decreases. 
C)  stays the same. 
D)  changes in a way that cannot be determined. A

Question 3

If an individual has a constant MRS of shoes for sneakers of 3/4 (that is,he or she is always willing to give up 3 pairs of sneakers to get 4 pairs of shoes)then,if sneakers and shoes are equally costly,he or she will

Accepted Answer

A)  buy only sneakers. 
B)  buy only shoes. 
C)  spend his or her income equally on sneakers and shoes. 
D)  wear sneakers only 3/4 of the time. 
A)  buy only sneakers. 
B)  buy only shoes. 
C)  spend his or her income equally on sneakers and shoes. 
D)  wear sneakers only 3/4 of the time. A

Question 4

The X-intercept of the budget constraint represents

Accepted Answer

A)  how much of good Y can be purchased if no good X is purchased and all income is spent. 
B)  how much of good X can be purchased if no good Y is purchased and all income is spent. 
C)  total income divided by the price of X. 
D)  a and c. 
A)  how much of good Y can be purchased if no good X is purchased and all income is spent. 
B)  how much of good X can be purchased if no good Y is purchased and all income is spent. 
C)  total income divided by the price of X. 
D)  a and c.

Question 5

If the government imposes a law requiring you to save when you otherwise would not have,they are

Accepted Answer

A)  truncating a budget line 
B)  shifting a budget line 
C)  changing preferences toward saving 
D)  changing preferences toward consumption 
A)  truncating a budget line 
B)  shifting a budget line 
C)  changing preferences toward saving 
D)  changing preferences toward consumption

Question 6

Suppose that at current consumption levels an individual's marginal utility of consuming an extra hot dog is 10 whereas the marginal utility of consuming an extra soft drink is 2.Then the MRS (of soft drinks for hot dogs)-that is,the number of hot dogs the individual is willing to give up to get one more soft drink is

Accepted Answer

A)  5 
B)  2 
C)  1/2 
D)  1/5 
A)  5 
B)  2 
C)  1/2 
D)  1/5

Question 7

If people like their goods in fixed proportions,the two goods are

Accepted Answer

A)  perfect substitutes 
B)  perfect complements 
C)  complements (but not perfect) 
D)  substitutes (but not perfect) 
A)  perfect substitutes 
B)  perfect complements 
C)  complements (but not perfect) 
D)  substitutes (but not perfect)

Question 8

Suppose a little girl likes peanut butter and jelly sandwiches with exactly 2T of jelly and 1T of peanut butter.Suppose further that her mom agrees to make sandwiches to those exact specifications and the price of peanut butter is $.25/T and the price of jelly is $.10/T.If she has $1.8 to spend on peanut butter and jelly ingredients (ignore the bread)in a week,how many sandwiches will she make?

Accepted Answer

A)  1 
B)  2 
C)  4 
D)  8 
A)  1 
B)  2 
C)  4 
D)  8

Question 9

If bundles of goods A and B lie on the same indifference curve,one can assume the individual

Accepted Answer

A)  prefers bundle A to bundle B. 
B)  prefers bundle B to bundle A. 
C)  enjoys bundle A and B equally. 
D)  bundle A contains the same goods as bundle B. 
A)  prefers bundle A to bundle B. 
B)  prefers bundle B to bundle A. 
C)  enjoys bundle A and B equally. 
D)  bundle A contains the same goods as bundle B.

Question 10

Suppose a teenager likes both rap music (R)and country music (C)with a set of preferences so that U = C1/2R1/2.Which point (C,R)makes the teen the happiest?

Accepted Answer

A)  4, 16 
B)  25, 1 
C)  9, 9 
D)  16, 4 
A)  4, 16 
B)  25, 1 
C)  9, 9 
D)  16, 4

Question 11

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C1/2R1/2.Suppose that the iTunes price of a rap music song is   and the price of a country music song is   .What level of utility is unaffordable?

Accepted Answer

A)  6 
B)  7 
C)    
D)  8 
A)  6 
B)  7 
C)    
D)  8

Question 12

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C1/2R1/2.Suppose that the iTunes price of a rap music song is   and the price of a country music song is   .What is the greatest level of affordable utility?

Accepted Answer

A)  7 
B)    
C)  8 
D)  9 
A)  7 
B)    
C)  8 
D)  9

Question 13

The point of tangency between a consumer's budget constraint and his or her indifference curve represents

Accepted Answer

A)  complete satisfaction for the consumer. 
B)  the equivalence of prices the consumer pays. 
C)  constrained utility maximization for the consumer. 
D)  the least he or she can spend. 
A)  complete satisfaction for the consumer. 
B)  the equivalence of prices the consumer pays. 
C)  constrained utility maximization for the consumer. 
D)  the least he or she can spend.

Question 14

The slope of the budget constraint line is

Accepted Answer

A)  the ratio of the prices (Px/Py). 
B)  the negative of the ratio of the prices (Px/Py). 
C)  the ratio of income divided by price of Y (I/Py). 
D)  none of these. 
A)  the ratio of the prices (Px/Py). 
B)  the negative of the ratio of the prices (Px/Py). 
C)  the ratio of income divided by price of Y (I/Py). 
D)  none of these.

Question 15

For an individual who consumes only two goods,X and Y,the opportunity cost of consuming one unit of X in terms of how much Y must be given up is reflected in

Accepted Answer

A)  the individual's marginal rate of consumption. 
B)  the slope of the individual's budget constraint. 
C)  the slope of the individual's indifference curve. 
D)  None of these. 
A)  the individual's marginal rate of consumption. 
B)  the slope of the individual's budget constraint. 
C)  the slope of the individual's indifference curve. 
D)  None of these.

Question 16

Suppose a cup of coffee at the campus coffee shop is $2.50 and a cup of hot tea is $1.25.Suppose a student's beverage budget is $20 per week.What is the most cups of tea the student could buy?

Accepted Answer

A)  20 
B)  16 
C)  10 
D)  8 
A)  20 
B)  16 
C)  10 
D)  8

Question 17

"If an individual is to maximize the utility received from consumption,he or she should spend all available income...." This statement assumes

Accepted Answer

A)  that saving is impossible. 
B)  that the individual is not satiated in all goods. 
C)  that no goods are "inferior." 
D)  Both a and b. 
A)  that saving is impossible. 
B)  that the individual is not satiated in all goods. 
C)  that no goods are "inferior." 
D)  Both a and b.

Question 18

Suppose a teenager likes both rap music (R)and country music (C)with a set of preferences so that U = C1/2R1/2.Which point (C,R)makes the teen the happiest?

Accepted Answer

A)  9, 16 
B)  36, 1 
C)  49, 4 
D)  100, 0 
A)  9, 16 
B)  36, 1 
C)  49, 4 
D)  100, 0

Question 19

If bundle A lies on an indifference curve and bundle B lies to the right of the curve,the individual

Accepted Answer

A)  prefers bundle A to bundle B. 
B)  prefers bundle B to bundle A. 
C)  enjoys bundle A and B equally. 
D)  must receive more of both-with bundle B. 
A)  prefers bundle A to bundle B. 
B)  prefers bundle B to bundle A. 
C)  enjoys bundle A and B equally. 
D)  must receive more of both-with bundle B.

Question 20

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C1/2R1/2.Suppose that the iTunes price of a rap music song is   and the price of a country music song is   .Which level of utility is affordable?

Accepted Answer

A)    
B)  9 
C)  16 
D)  25 
A)    
B)  9 
C)  16 
D)  25

If a person's indifference curves can be represented as a straight line,the person views the goods as

As an individual moves northwest along his or her indifference curve substituting more and more Y for X,his or her MRS of X for Y

If an individual has a constant MRS of shoes for sneakers of 3/4 (that is,he or she is always willing to give up 3 pairs of sneakers to get 4 pairs of shoes)then,if sneakers and shoes are equally costly,he or she will

The X-intercept of the budget constraint represents

If the government imposes a law requiring you to save when you otherwise would not have,they are

If people like their goods in fixed proportions,the two goods are

If bundles of goods A and B lie on the same indifference curve,one can assume the individual

Suppose a teenager likes both rap music (R)and country music (C)with a set of preferences so that U = C^1/2R^1/2.Which point (C,R)makes the teen the happiest?

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C^1/2R^1/2.Suppose that the iTunes price of a rap music song is and the price of a country music song is .What level of utility is unaffordable?

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C^1/2R^1/2.Suppose that the iTunes price of a rap music song is and the price of a country music song is .What is the greatest level of affordable utility?

The point of tangency between a consumer's budget constraint and his or her indifference curve represents

The slope of the budget constraint line is

For an individual who consumes only two goods,X and Y,the opportunity cost of consuming one unit of X in terms of how much Y must be given up is reflected in

Suppose a cup of coffee at the campus coffee shop is $2.50 and a cup of hot tea is $1.25.Suppose a student's beverage budget is $20 per week.What is the most cups of tea the student could buy?

"If an individual is to maximize the utility received from consumption,he or she should spend all available income...." This statement assumes

Suppose a teenager likes both rap music (R)and country music (C)with a set of preferences so that U = C^1/2R^1/2.Which point (C,R)makes the teen the happiest?

If bundle A lies on an indifference curve and bundle B lies to the right of the curve,the individual

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C^1/2R^1/2.Suppose that the iTunes price of a rap music song is and the price of a country music song is .Which level of utility is affordable?

Economic Models

Individual Demand Curves

Uncertainty

Game Theory

Production

Costs

Profit Maximization and Supply

Perfect Competition in a Single Market

General Equilibrium and Welfare

Monopoly

Imperfect Competition

Pricing in Input Markets

Capital and Time

Asymmetric Information

Externalities and Public Goods

Behavioral Economics

Filters

Exam 2: Utility and Choice

If a person's indifference curves can be represented as a straight line,the person views the goods as

As an individual moves northwest along his or her indifference curve substituting more and more Y for X,his or her MRS of X for Y

If an individual has a constant MRS of shoes for sneakers of 3/4 (that is,he or she is always willing to give up 3 pairs of sneakers to get 4 pairs of shoes)then,if sneakers and shoes are equally costly,he or she will

The X-intercept of the budget constraint represents

If the government imposes a law requiring you to save when you otherwise would not have,they are

If people like their goods in fixed proportions,the two goods are

If bundles of goods A and B lie on the same indifference curve,one can assume the individual

Suppose a teenager likes both rap music (R)and country music (C)with a set of preferences so that U = C1/2R1/2.Which point (C,R)makes the teen the happiest?

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C1/2R1/2.Suppose that the iTunes price of a rap music song is and the price of a country music song is .What level of utility is unaffordable?

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C1/2R1/2.Suppose that the iTunes price of a rap music song is and the price of a country music song is .What is the greatest level of affordable utility?

The point of tangency between a consumer's budget constraint and his or her indifference curve represents

The slope of the budget constraint line is

For an individual who consumes only two goods,X and Y,the opportunity cost of consuming one unit of X in terms of how much Y must be given up is reflected in

Suppose a cup of coffee at the campus coffee shop is $2.50 and a cup of hot tea is $1.25.Suppose a student's beverage budget is $20 per week.What is the most cups of tea the student could buy?

"If an individual is to maximize the utility received from consumption,he or she should spend all available income...." This statement assumes

Suppose a teenager likes both rap music (R)and country music (C)with a set of preferences so that U = C1/2R1/2.Which point (C,R)makes the teen the happiest?

If bundle A lies on an indifference curve and bundle B lies to the right of the curve,the individual

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C1/2R1/2.Suppose that the iTunes price of a rap music song is and the price of a country music song is .Which level of utility is affordable?

Economic Models

Individual Demand Curves

Uncertainty

Game Theory

Production

Costs

Profit Maximization and Supply

Perfect Competition in a Single Market

General Equilibrium and Welfare

Monopoly

Imperfect Competition

Pricing in Input Markets

Capital and Time

Asymmetric Information

Externalities and Public Goods

Behavioral Economics

Filters

Suppose a teenager likes both rap music (R)and country music (C)with a set of preferences so that U = C^1/2R^1/2.Which point (C,R)makes the teen the happiest?

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C^1/2R^1/2.Suppose that the iTunes price of a rap music song is and the price of a country music song is .What level of utility is unaffordable?

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C^1/2R^1/2.Suppose that the iTunes price of a rap music song is and the price of a country music song is .What is the greatest level of affordable utility?

Suppose a teenager likes both rap music (R)and country music (C)with a set of preferences so that U = C^1/2R^1/2.Which point (C,R)makes the teen the happiest?

Suppose a teenager has $20 and likes both rap music (R)and country music (C)with a set of preferences so that U = C^1/2R^1/2.Suppose that the iTunes price of a rap music song is and the price of a country music song is .Which level of utility is affordable?