Exam 5: Constraints, Choices, and Demand

When the price elasticity of demand is small in magnitude,a ___ increase in the price leads to a _ reduction in the amount purchased and the demand curve is relatively __.

(Multiple Choice)

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Question 21

If the income-consumption path slopes down,then:

(Multiple Choice)

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Question 22

If two goods are substitutes,then an increase in the price of one will cause:

(Multiple Choice)

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Question 23

Refer to Figure 5.6.Which diagram shows an increase in income with both bread and soup being normal goods?

(Multiple Choice)

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Question 24

Suppose that steak is a normal good and vegetables are inferior goods.Using a carefully-labeled diagram,illustrate the income-consumption curve that would result from an increase in a consumer's income.

(Essay)

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Question 25

When the price elasticity of demand is large in magnitude,a ___ increase in the price leads to a _ reduction in the amount purchased and the demand curve is relatively __.

(Multiple Choice)

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Question 26

If a change in the price of one good does not cause a shift in the demand curve of another good,then the two goods are:

(Multiple Choice)

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Question 27

An increase in the price of the good measured along the vertical axis will cause the budget line to

(Multiple Choice)

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Question 28

At a boundary choice:

(Multiple Choice)

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Question 29

Suppose that soup is measured on the horizontal axis and bread is measured on the vertical axis.At an interior solution:

(Multiple Choice)

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Question 30

Refer to Figure 5.7.Which diagram best represents an Engle curve where soup is a normal good?

(Multiple Choice)

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Question 31

The curve that shows how the best affordable consumption bundle changes as the price of a good changes (holding the consumer's income,preferences and all other prices fixed)is called:

(Multiple Choice)

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Question 32

If everyone in an economy buys and sells goods at market-wide prices:

(Multiple Choice)

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Question 33

Suppose a consumer buy books and DVDs.The price of a book is $10,the price of a DVD is $20 and the consumer's income is $400.If books are measured on the vertical axis and DVDs are measured on the horizontal axis,then the slope of the budget line is:

(Multiple Choice)

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Question 34

Whenever a consumer purchases good X but not good Y,then:

(Multiple Choice)

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Question 35

When a good is normal:

(Multiple Choice)

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Question 36

If the price of the good measured on the horizontal axis is subject to volume penalties,then:

(Multiple Choice)

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Question 37

Consumption bundles that lie above the boundary established by the budget line:

(Multiple Choice)

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Question 38

If an increase in the price of one good causes the demand curve for another good to shift to the left,then the two goods are:

(Multiple Choice)

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Question 39

Suppose that books are measured on the horizontal axis and CDs are measured on the vertical axis.As long as the law of demand holds for books,than an increase in the price of books will generate a price-consumption curve that traces a path:

(Multiple Choice)

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Question 40

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Exam 5: Constraints, Choices, and Demand

When the price elasticity of demand is small in magnitude,a _____ increase in the price leads to a _____ reduction in the amount purchased and the demand curve is relatively ____.

If the income-consumption path slopes down,then:

If two goods are substitutes,then an increase in the price of one will cause:

Refer to Figure 5.6.Which diagram shows an increase in income with both bread and soup being normal goods?

Suppose that steak is a normal good and vegetables are inferior goods.Using a carefully-labeled diagram,illustrate the income-consumption curve that would result from an increase in a consumer's income.

When the price elasticity of demand is large in magnitude,a _____ increase in the price leads to a _____ reduction in the amount purchased and the demand curve is relatively ____.

If a change in the price of one good does not cause a shift in the demand curve of another good,then the two goods are:

An increase in the price of the good measured along the vertical axis will cause the budget line to

At a boundary choice:

Suppose that soup is measured on the horizontal axis and bread is measured on the vertical axis.At an interior solution:

Refer to Figure 5.7.Which diagram best represents an Engle curve where soup is a normal good?

The curve that shows how the best affordable consumption bundle changes as the price of a good changes (holding the consumer's income,preferences and all other prices fixed)is called:

If everyone in an economy buys and sells goods at market-wide prices:

Suppose a consumer buy books and DVDs.The price of a book is $10,the price of a DVD is $20 and the consumer's income is $400.If books are measured on the vertical axis and DVDs are measured on the horizontal axis,then the slope of the budget line is:

Whenever a consumer purchases good X but not good Y,then:

When a good is normal:

If the price of the good measured on the horizontal axis is subject to volume penalties,then:

Consumption bundles that lie above the boundary established by the budget line:

If an increase in the price of one good causes the demand curve for another good to shift to the left,then the two goods are:

Suppose that books are measured on the horizontal axis and CDs are measured on the vertical axis.As long as the law of demand holds for books,than an increase in the price of books will generate a price-consumption curve that traces a path:

Introduction

Supply and Demand

Balancing Benefits and Costs

Consumer Preferences

Demand and Welfare

Technology and Production

Cost

Profit Maximization

Choices Involving Time

Choices Involving Risk

Choices Involving Strategy

Behavioral Economics

Equilibrium and Efficiency

Market Intervention

General Equilibrium, Efficiency, and Equity

Monopoly

Pricing Policies

Oligopoly

Externalities and Public Goods

Asymmetric Information

Filters

When the price elasticity of demand is small in magnitude,a ___ increase in the price leads to a _ reduction in the amount purchased and the demand curve is relatively __.

When the price elasticity of demand is large in magnitude,a ___ increase in the price leads to a _ reduction in the amount purchased and the demand curve is relatively __.