Question 1

Ambrose has an indifference curve with equation x2 = 20 - 4x1/21.When Ambrose is consuming the bundle (4, 16), his marginal rate of substitution is 25/4.

Accepted Answer

A) True 
 B)False

Question 2

Professor Stern's colleague, Dr.Schmertz, gives one midterm exam and a final exam.He weights the final twice as heavily as the midterm to determine the course grade.No grades can be dropped.If the midterm score is represented on the horizontal axis and the final score on the vertical axis, and if a student in Dr.Schmertz's class cares only about her course grade, her indifference curve is

Accepted Answer

A) a line with slope 22. 
B) a line with slope 21. 
C) a line with slope 20.5. 
D) L-shaped with the kink at (x, 2x). 
E) L-shaped with the kink at (2x, x). 
A) a line with slope 22. 
B) a line with slope 21. 
C) a line with slope 20.5. 
D) L-shaped with the kink at (x, 2x). 
E) L-shaped with the kink at (2x, x).

Question 3

Coach Steroid likes his players to be big, fast, and obedient.If player A is better than player B in two of these three characteristics, Steroid will prefer A to B.Three players try out for quarterback.Wilbur Westinghouse weighs 320 pounds, runs very slowly, and is quite obedient.Harold Hotpoint weighs 240 pounds, runs extremely fast, and is extremely disobedient.Jerry Jacuzzi weighs 150 pounds, runs at average speed, and is extremely obedient.Does Coach Steroid have transitive preferences? Explain your answer.

Accepted Answer

No.Steroid prefers W to H because W is h

Question 4

Josephine buys 3 quarts of milk and 2 pounds of butter when milk sells for $2 a quart and butter sells for $1 a pound.Wilma buys 2 quarts of milk and 3 pounds of butter at the same prices.Josephine's marginal rate of substitution between milk and butter is greater than Wilma's.

Accepted Answer

A) True 
 B)False

Question 5

Steven's indifference curves are circles, all of which are centered at (15, 13).Of any two indifference circles, he would rather be on the inner one than the outer one.

Accepted Answer

A) Steven prefers (19, 22)to (13, 7). 
B) Steven prefers (13, 22)to (13, 7). 
C) Steven prefers (12, 10)to (22, 18). 
D) Steven's preferences are not complete. 
E) More than one of the above statements are true. 
A) Steven prefers (19, 22)to (13, 7). 
B) Steven prefers (13, 22)to (13, 7). 
C) Steven prefers (12, 10)to (22, 18). 
D) Steven's preferences are not complete. 
E) More than one of the above statements are true.

Question 6

A person with reflexive preferences is someone who does not shop carefully.

Accepted Answer

A) True 
 B)False

Question 7

In Professor Meanscore's class, the first midterm exam and the second midterm exam are weighted equally toward the final grade.With the first midterm's score on the horizontal axis, and the second midterm's score on the vertical axis, indifference curves between the two exam scores are

Accepted Answer

A) L-shaped with lines extending upward and to the right. 
B) L-shaped with lines extending downward and to the left. 
C) parabola shaped. 
D) straight lines with slope 21. 
E) straight lines with slope 2. 
A) L-shaped with lines extending upward and to the right. 
B) L-shaped with lines extending downward and to the left. 
C) parabola shaped. 
D) straight lines with slope 21. 
E) straight lines with slope 2.

Question 8

If preferences are convex, then for any commodity bundle x, the set of commodity bundles that are worse than x is a convex set.

Accepted Answer

A) True 
 B)False

Question 9

If two goods are perfect complements,

Accepted Answer

A) there is a bliss point and the indifference curves surround this point. 
B) consumers will only buy the cheaper of the two goods. 
C) indifference curves have a positive slope. 
D) None of the above. 
A) there is a bliss point and the indifference curves surround this point. 
B) consumers will only buy the cheaper of the two goods. 
C) indifference curves have a positive slope. 
D) None of the above.

Exam 2: Preferences-Part A

Ambrose has an indifference curve with equation x2 = 20 - 4x1/21.When Ambrose is consuming the bundle (4, 16), his marginal rate of substitution is 25/4.

Josephine buys 3 quarts of milk and 2 pounds of butter when milk sells for $2 a quart and butter sells for $1 a pound.Wilma buys 2 quarts of milk and 3 pounds of butter at the same prices.Josephine's marginal rate of substitution between milk and butter is greater than Wilma's.

Steven's indifference curves are circles, all of which are centered at (15, 13).Of any two indifference circles, he would rather be on the inner one than the outer one.

A person with reflexive preferences is someone who does not shop carefully.

In Professor Meanscore's class, the first midterm exam and the second midterm exam are weighted equally toward the final grade.With the first midterm's score on the horizontal axis, and the second midterm's score on the vertical axis, indifference curves between the two exam scores are

If preferences are convex, then for any commodity bundle x, the set of commodity bundles that are worse than x is a convex set.

If two goods are perfect complements,

Budget Constraint-Part A

Budget Constraint-Part B

Preferences-Part B

Utility-Part A

Utility-Part B

Choice-Part A

Choice-Part B

Demand-Part A

Demand-Part B

Revealed Preference-Part A

Revealed Preference-Part B

Slutsky Equation-Part A

Slutsky Equation-Part B

Buying and Selling-Part A

Buying and Selling-Part B

Intertemporal Choice-Part A

Intertemporal Choice-Part B

Asset Markets-Part A

Asset Markets-Part B

Uncertainty-Part A

Uncertainty-Part B

Risky Assets-Part A

Risky Assets-Part B

Consumers Surplus-Part A

Consumers Surplus-Part B

Market Demand-Part A

Market Demand-Part B

Equilibrium-Part A

Equilibrium-Part B

Auctions-Part A

Auctions-Part B

Technology-Part A

Technology-Part B

Profit Maximization-Part A

Profit Maximization-Part B

Cost Minimization-Part A

Cost Minimization-Part B

Cost Curves-Part A

Cost Curves-Part B

Firm Supply-Part A

Firm Supply-Part B

Industry Supply-Part A

Industry Supply-Part B

Monopoly-Part A

Monopoly-Part B

Monopoly Behavior-Part A

Monopoly Behavior-Part B

Factor Markets-Part A

Factor Markets-Part B

Oligopoly-Part A

Oligopoly-Part B

Game Theory-Part A

Game Theory-Part B

Game Applications-Part A

Game Applications-Part B

Behavioral Economics

Exchange-Part A

Exchange-Part B

Production-Part A

Production-Part B

Welfare-Part A

Welfare-Part B

Externalities-Part A

Externalities-Part B

Information Technology-Part A

Information Technology-Part B

Public Goods-Part A

Public Goods-Part B

Asymmetric Information-Part A

Asymmetric Information-Part B

Filters

Ambrose has an indifference curve with equation x₂ = 20 - 4x^1/2₁.When Ambrose is consuming the bundle (4, 16), his marginal rate of substitution is 25/4.