Question 1

Betty consumes good x and good y.If the price of x = $3 and the price of y = $4,then

Accepted Answer

A)  an extra unit of x costs 4/3 units of y. 
B)  an extra unit of y costs 4/3 units of x. 
C)  an extra unit of x costs 3/4 units of y. 
D)  Both B and C. 
A)  an extra unit of x costs 4/3 units of y. 
B)  an extra unit of y costs 4/3 units of x. 
C)  an extra unit of x costs 3/4 units of y. 
D)  Both B and C.

Question 2

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 3

The consumer is in equilibrium when

Accepted Answer

A)  MRT = MRS. 
B)  Px/Py. = MUx/MUy. 
C)  the budget line is tangent to the indifference curve at the bundle chosen. 
D)  All of the above. 
A)  MRT = MRS. 
B)  Px/Py. = MUx/MUy. 
C)  the budget line is tangent to the indifference curve at the bundle chosen. 
D)  All of the above.

Question 4

An optimum that occurs as a corner solution

Accepted Answer

A)  includes only one good. 
B)  cannot be an equilibrium. 
C)  cannot exhaust the budget constraint. 
D)  includes the exact same amounts of each good. 
A)  includes only one good. 
B)  cannot be an equilibrium. 
C)  cannot exhaust the budget constraint. 
D)  includes the exact same amounts of each good.

Question 5

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.If the price of burger increases,

Accepted Answer

A)  Max will buy less burger and more chicken. 
B)  Max will buy less burger and the same quantity of chicken. 
C)  Max will buy less of both meats. 
D)  More information is needed to answer the question. 
A)  Max will buy less burger and more chicken. 
B)  Max will buy less burger and the same quantity of chicken. 
C)  Max will buy less of both meats. 
D)  More information is needed to answer the question.

Question 6

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 = y,then it can be concluded that

Accepted Answer

A)  "x" and "y" are perfect complements. 
B)  "x" 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 horizontal. 
A)  "x" and "y" are perfect complements. 
B)  "x" 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 horizontal.

Question 7

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.Which of the following bundles are in Max's opportunity set?

Accepted Answer

A)  a, b, c 
B)  b, d, e 
C)  a, b, d 
D)  None of the above. 
A)  a, b, c 
B)  b, d, e 
C)  a, b, d 
D)  None of the above.

Question 8

Joe's income is $500,the price of food (F)is $2,and the price of shelter (S)is $100.Which of the following bundles is in Joe's opportunity set?

Accepted Answer

A)  50 units of food, 5 units of shelter 
B)  200 units of food, 2 units of shelter 
C)  100 units of food, 1 unit of shelter 
D)  150 units of food, 3 units of shelter 
A)  50 units of food, 5 units of shelter 
B)  200 units of food, 2 units of shelter 
C)  100 units of food, 1 unit of shelter 
D)  150 units of food, 3 units of shelter

Question 9

Explain why most indifference curves are convex.

Accepted Answer

Diminishing marginal rates of substituti

Question 10

If a consumer prefers Apples to Bananas and prefers Bananas to Citrus Fruit,in order to satisfy assumptions about preferences she has to prefer

Accepted Answer

A)  Bananas to Apples. 
B)  Citrus Fruit to Bananas. 
C)  Apples to Citrus Fruit. 
D)  Citrus Fruit to Apples. 
A)  Bananas to Apples. 
B)  Citrus Fruit to Bananas. 
C)  Apples to Citrus Fruit. 
D)  Citrus Fruit to Apples.

Question 11

Indifference curves cannot intersect.

Accepted Answer

@#IMG-DLM& True.As seen in the above figure,points

Question 12

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

Accepted Answer

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

Question 13

The statement "There is no accounting for taste" implies

Accepted Answer

A)  individuals all have the same preferences. 
B)  individuals all have different cardinal preferences but the same ordinal preferences. 
C)  individuals all have different ordinal preferences but the same cardinal preferences. 
D)  individuals all have different ordinal and cardinal preferences. 
A)  individuals all have the same preferences. 
B)  individuals all have different cardinal preferences but the same ordinal preferences. 
C)  individuals all have different ordinal preferences but the same cardinal preferences. 
D)  individuals all have different ordinal and cardinal preferences.

Question 14

Joe's income is $500,the price of food (F)is $2 per unit,and the price of shelter (S)is $100.Which of the following represents his marginal rate of transformation of food for shelter?

Accepted Answer

A)  -5 
B)  -50 
C)  -.02 
D)  None of the above. 
A)  -5 
B)  -50 
C)  -.02 
D)  None of the above.

Question 15

Some people view cosmetic surgery (c)and facials (f)as perfect substitutes as measured by the utility function U(c,f)= 5c + 10f.What is the marginal utility of cosmetic surgery?

Accepted Answer

A)  MU = 5. 
B)  MU = 10. 
C)  MU = 15. 
D)  None of the above. 
A)  MU = 5. 
B)  MU = 10. 
C)  MU = 15. 
D)  None of the above.

Question 16

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.Which of the following best describes Max's preferences?

Accepted Answer

A)  d > b > e 
B)  d = b = e 
C)  a = b > c 
D)  a = b > e 
A)  d > b > e 
B)  d = b = e 
C)  a = b > c 
D)  a = b > e

Question 17

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

Accepted Answer

A)  the consumer prefers the first bundle. 
B)  the consumer prefers the second bundle. 
C)  the consumer likes the second bundle twice as much. 
D)  the consumer likes the first bundle twice as much. 
A)  the consumer prefers the first bundle. 
B)  the consumer prefers the second bundle. 
C)  the consumer likes the second bundle twice as much. 
D)  the consumer likes the first bundle twice as much.

Question 18

The indifference curves for left shoes and right shoes would most likely be

Accepted Answer

A)  upward sloping and concave to the origin. 
B)  downward sloping and convex to the origin. 
C)  downward sloping and straight lines. 
D)  L-shaped. 
A)  upward sloping and concave to the origin. 
B)  downward sloping and convex to the origin. 
C)  downward sloping and straight lines. 
D)  L-shaped.

Question 19

Suppose Joe's utility for lobster (L)and soda (S)can be represented as U = L0.5 S0.5.Draw the indifference curve that yields a utility level of 9.Calculate the MUL,MUS,and MRS of L for S on that indifference curve when S = 3.

Accepted Answer

@#IMG-DLM& See the above figure.Along that indiffe

Question 20

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

Betty consumes good x and good y.If the price of x = $3 and the price of y = $4,then

The assumption of completeness means that

The consumer is in equilibrium when

An optimum that occurs as a corner solution

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.If the price of burger increases,

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 = y,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.Which of the following bundles are in Max's opportunity set?

Joe's income is $500,the price of food (F)is $2,and the price of shelter (S)is $100.Which of the following bundles is in Joe's opportunity set?

Explain why most indifference curves are convex.

If a consumer prefers Apples to Bananas and prefers Bananas to Citrus Fruit,in order to satisfy assumptions about preferences she has to prefer

Indifference curves cannot intersect.

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

The statement "There is no accounting for taste" implies

Joe's income is $500,the price of food (F)is $2 per unit,and the price of shelter (S)is $100.Which of the following represents his marginal rate of transformation of food for shelter?

Some people view cosmetic surgery (c)and facials (f)as perfect substitutes as measured by the utility function U(c,f)= 5c + 10f.What is the marginal utility of cosmetic surgery?

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.Which of the following best describes Max's preferences?

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

The indifference curves for left shoes and right shoes would most likely be

Suppose Joe's utility for lobster (L)and soda (S)can be represented as U = L^0.5 S^0.5.Draw the indifference curve that yields a utility level of 9.Calculate the MUL,MUS,and MRS of L for S on that indifference curve when S = 3.

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

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

Betty consumes good x and good y.If the price of x = $3 and the price of y = $4,then

The assumption of completeness means that

The consumer is in equilibrium when

An optimum that occurs as a corner solution

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.If the price of burger increases,

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 = y,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.Which of the following bundles are in Max's opportunity set?

Joe's income is $500,the price of food (F)is $2,and the price of shelter (S)is $100.Which of the following bundles is in Joe's opportunity set?

Explain why most indifference curves are convex.

If a consumer prefers Apples to Bananas and prefers Bananas to Citrus Fruit,in order to satisfy assumptions about preferences she has to prefer

Indifference curves cannot intersect.

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

The statement "There is no accounting for taste" implies

Joe's income is $500,the price of food (F)is $2 per unit,and the price of shelter (S)is $100.Which of the following represents his marginal rate of transformation of food for shelter?

Some people view cosmetic surgery (c)and facials (f)as perfect substitutes as measured by the utility function U(c,f)= 5c + 10f.What is the marginal utility of cosmetic surgery?

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.Which of the following best describes Max's preferences?

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

The indifference curves for left shoes and right shoes would most likely be

Suppose Joe's utility for lobster (L)and soda (S)can be represented as U = L0.5 S0.5.Draw the indifference curve that yields a utility level of 9.Calculate the MUL,MUS,and MRS of L for S on that indifference curve when S = 3.

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

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

Suppose Joe's utility for lobster (L)and soda (S)can be represented as U = L^0.5 S^0.5.Draw the indifference curve that yields a utility level of 9.Calculate the MUL,MUS,and MRS of L for S on that indifference curve when S = 3.