Question 1

Which of the following statements is true?

Accepted Answer

A)  Corner solutions always satisfy the tangency condition 
B)  Interior solutions may or may not satisfy the tangency condition 
C)  Interior solutions always satisfy the tangency condition 
D)  Whenever the consumer purchases good X but not good Y, then MRSXY X/PY at the chosen bundle 
A)  Corner solutions always satisfy the tangency condition 
B)  Interior solutions may or may not satisfy the tangency condition 
C)  Interior solutions always satisfy the tangency condition 
D)  Whenever the consumer purchases good X but not good Y, then MRSXY X/PY at the chosen bundle

Question 2

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

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 3

When the government provides food stamps to low-income households,

Accepted Answer

A)  The household definitely purchases more food 
B)  The household purchases less food 
C)  Purchases of food may increase or decrease 
D)  The household's utility is greater than if they received cash aid 
A)  The household definitely purchases more food 
B)  The household purchases less food 
C)  Purchases of food may increase or decrease 
D)  The household's utility is greater than if they received cash aid

Question 4

Suppose a consumer buys pizza (P)and soft drinks (S).The price of pizza is $10,the price of soft drinks is $2 and the consumer's income is $100.If pizza is measured on the vertical axis and soft drinks are measured on the horizontal axis,then the consumer's budget constraint is given by

Accepted Answer

A)  P = 10 - (1/5)S 
B)  S = 10 - (1/5)P 
C)  P = 100 - 5S 
D)  P = 10 - 5S 
A)  P = 10 - (1/5)S 
B)  S = 10 - (1/5)P 
C)  P = 100 - 5S 
D)  P = 10 - 5S

Question 5

Suppose that books are measured on the horizontal axis and CD's 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 path that traces a path

Accepted Answer

A)  To the left 
B)  To the right 
C)  Upward 
D)  Downward 
A)  To the left 
B)  To the right 
C)  Upward 
D)  Downward

Question 6

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

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 7

-Refer to Figure 5.4.Which consumption bundle would maximize the consumer's utility?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 8

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

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Which of the following statements is true?

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

When the government provides food stamps to low-income households,

Suppose a consumer buys pizza (P)and soft drinks (S).The price of pizza is $10,the price of soft drinks is $2 and the consumer's income is $100.If pizza is measured on the vertical axis and soft drinks are measured on the horizontal axis,then the consumer's budget constraint is given by

Suppose that books are measured on the horizontal axis and CD's 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 path that traces a path

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

-Refer to Figure 5.4.Which consumption bundle would maximize the consumer's utility?

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

Introduction

Supply and Demand3

Balancing Benefits and Costs

Principles and Preferences

Rom Demand to Welfare

Technology and Production

Cost

Rofit 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

Filters

Exam 5: Constraints, Choices, and Demand

Which of the following statements is true?

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

When the government provides food stamps to low-income households,

Suppose a consumer buys pizza (P)and soft drinks (S).The price of pizza is $10,the price of soft drinks is $2 and the consumer's income is $100.If pizza is measured on the vertical axis and soft drinks are measured on the horizontal axis,then the consumer's budget constraint is given by

Suppose that books are measured on the horizontal axis and CD's 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 path that traces a path

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

-Refer to Figure 5.4.Which consumption bundle would maximize the consumer's utility?

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

Introduction

Supply and Demand3

Balancing Benefits and Costs

Principles and Preferences

Rom Demand to Welfare

Technology and Production

Cost

Rofit 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

Filters