Question 1

When the price of one good changes,while the prices of all others stay the same:

Accepted Answer

A)  the change in relative prices is reflected in a change in the slope of the budget constraint. 
B)  the change in relative prices can be thought of as a change in the opportunity costs of each good. 
C)  the change in relative prices is reflected in a change in the marginal utility per dollar spent on each good. 
D)  All of these statements are true. 
A)  the change in relative prices is reflected in a change in the slope of the budget constraint. 
B)  the change in relative prices can be thought of as a change in the opportunity costs of each good. 
C)  the change in relative prices is reflected in a change in the marginal utility per dollar spent on each good. 
D)  All of these statements are true.

Question 2

A budget constraint:

Accepted Answer

A)  shows different bundles of goods that all yield the same total utility. 
B)  shows different bundles of goods that all cost the same amount. 
C)  shows different bundles of goods that all maximize an individual's utility. 
D)  shows how much income is needed to maximize total utility. 
A)  shows different bundles of goods that all yield the same total utility. 
B)  shows different bundles of goods that all cost the same amount. 
C)  shows different bundles of goods that all maximize an individual's utility. 
D)  shows how much income is needed to maximize total utility.

Question 3

Reciprocity means:

Accepted Answer

A)  responding to another's actions with a similar action. 
B)  deriving utility from an action that will cause another's utility to increase. 
C)  doing good things for people and asking nothing in return. 
D)  deriving utility from the action of a stranger. 
A)  responding to another's actions with a similar action. 
B)  deriving utility from an action that will cause another's utility to increase. 
C)  doing good things for people and asking nothing in return. 
D)  deriving utility from the action of a stranger.

Question 4

Which of the following statements is true about individuals and utility?

Accepted Answer

A)  Individuals seek to maximize utility. 
B)  Individuals seek to maximize their income, not utility. 
C)  Individuals will either minimize or maximize utility depending on the situation. 
D)  Individuals rarely try to maximize their utility. 
A)  Individuals seek to maximize utility. 
B)  Individuals seek to maximize their income, not utility. 
C)  Individuals will either minimize or maximize utility depending on the situation. 
D)  Individuals rarely try to maximize their utility.

Question 5

Kimberly decides to go back to college full time at the age of 30,and finds herself with a much lower income than she was earning before.Now that she has less income,she finds herself eating less steak and more pasta than ever before.We can conclude:

Accepted Answer

A)  steak and pasta are both normal goods, because they are both food she eats regardless of her income. 
B)  steak and pasta are both inferior goods, because they are both food she eats regardless of her income. 
C)  pasta is an inferior good because her demand increased when her income went down. 
D)  steak and pasta are both inferior goods, because they are both food she eats regardless of her income; also, pasta is an inferior good because her demand increased when her income went down. 
A)  steak and pasta are both normal goods, because they are both food she eats regardless of her income. 
B)  steak and pasta are both inferior goods, because they are both food she eats regardless of her income. 
C)  pasta is an inferior good because her demand increased when her income went down. 
D)  steak and pasta are both inferior goods, because they are both food she eats regardless of her income; also, pasta is an inferior good because her demand increased when her income went down.

Question 6

After browsing several pairs of shoes,Bob buys a pair of Nike running shoes.Economists would say that:

Accepted Answer

A)  Bob is revealing his strong distaste for New Balance running shoes. 
B)  Bob is revealing he will always choose Nike over any other shoe brand. 
C)  Bob will get more utility per dollar from the Nike running shoes than any other in the store. 
D)  Bob made a poor choice, if he really prefers Adidas. 
A)  Bob is revealing his strong distaste for New Balance running shoes. 
B)  Bob is revealing he will always choose Nike over any other shoe brand. 
C)  Bob will get more utility per dollar from the Nike running shoes than any other in the store. 
D)  Bob made a poor choice, if he really prefers Adidas.

Question 7

Assume Roger's income to spend on books and movie tickets is $48,and his budget constraint is represented by line

Accepted Answer

A) Roger gets a raise at work. 
B) Roger gets unlimited coupons for $2 off the price of a movie ticket. 
C) The price of movie tickets increases to $8. 
D) None of these changes would cause Roger's budget constraint to move from B to A. 
A) Roger gets a raise at work. 
B) Roger gets unlimited coupons for $2 off the price of a movie ticket. 
C) The price of movie tickets increases to $8. 
D) None of these changes would cause Roger's budget constraint to move from B to A.

Question 8

This graph shows three different budget constraints: A,B,and C.  
If Don has budget constraint C in the graph shown,what is the trade-off he faces in terms of the two goods?

Accepted Answer

A) Two cases of soda for every three gallons of milk 
B) One case of soda for every one and a half gallons of milk 
C) Three cases of soda for every four and a half gallons of milk 
D) All of these accurately reflect Don's tradeoff. 
A) Two cases of soda for every three gallons of milk 
B) One case of soda for every one and a half gallons of milk 
C) Three cases of soda for every four and a half gallons of milk 
D) All of these accurately reflect Don's tradeoff.

Question 9

A bundle:

Accepted Answer

A)  is a specific combination of goods and services an individual could consume. 
B)  describes the amount of people that choose a particular combination of goods. 
C)  is a curve describing different combinations of goods and services an individual could choose to consume. 
D)  is when a store sells goods at a discounted price. 
A)  is a specific combination of goods and services an individual could consume. 
B)  describes the amount of people that choose a particular combination of goods. 
C)  is a curve describing different combinations of goods and services an individual could choose to consume. 
D)  is when a store sells goods at a discounted price.

Question 10

If the graph shown represents Tina's budget constraint,which of the following consumption bundles can Tina not afford?

Accepted Answer

A)  Three pairs of earrings and four hairbands 
B)  Two pairs of earrings and four hairbands 
C)  No earrings and six hairbands 
D)  Cannot answer this question without knowing Tina's income and the prices of the two goods 
A)  Three pairs of earrings and four hairbands 
B)  Two pairs of earrings and four hairbands 
C)  No earrings and six hairbands 
D)  Cannot answer this question without knowing Tina's income and the prices of the two goods

When the price of one good changes,while the prices of all others stay the same:

A budget constraint:

Reciprocity means:

Which of the following statements is true about individuals and utility?

Kimberly decides to go back to college full time at the age of 30,and finds herself with a much lower income than she was earning before.Now that she has less income,she finds herself eating less steak and more pasta than ever before.We can conclude:

After browsing several pairs of shoes,Bob buys a pair of Nike running shoes.Economists would say that:

Assume Roger's income to spend on books and movie tickets is $48,and his budget constraint is represented by line

This graph shows three different budget constraints: A,B,and C. If Don has budget constraint C in the graph shown,what is the trade-off he faces in terms of the two goods?

A bundle:

If the graph shown represents Tina's budget constraint,which of the following consumption bundles can Tina not afford?

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Exam 7: Consumer Behavior

When the price of one good changes,while the prices of all others stay the same:

A budget constraint:

Reciprocity means:

Which of the following statements is true about individuals and utility?

Kimberly decides to go back to college full time at the age of 30,and finds herself with a much lower income than she was earning before.Now that she has less income,she finds herself eating less steak and more pasta than ever before.We can conclude:

After browsing several pairs of shoes,Bob buys a pair of Nike running shoes.Economists would say that:

Assume Roger's income to spend on books and movie tickets is $48,and his budget constraint is represented by line

This graph shows three different budget constraints: A,B,and C. If Don has budget constraint C in the graph shown,what is the trade-off he faces in terms of the two goods?

A bundle:

If the graph shown represents Tina's budget constraint,which of the following consumption bundles can Tina not afford?

Economics and Life

Specialization and Exchange

Markets

Elasticity

Efficiency

Government Intervention Microeconomics

Behavioral Economics: A Closer Look at Decision Making

Game Theory and Strategic Thinking

Information

Time and Uncertainty

The Costs of Production

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

The Factors of Production

International Trade

Externalities

Public Goods and Common Resources

Taxation and the Public Budget

Poverty, Inequality, and Discrimination

Political Choices

Public Policy and Choice Architecture

Filters