Question 1

A marginal rate of substitution formula tells us

Accepted Answer

A)  The rate at which the consumer is willing to exchange one good for another, given the level of utility 
B)  The rate at which the consumer is willing to exchange one good for another, given the amounts consumed 
C)  The rate at which the consumer is willing to exchange one good for another, given the consumer's income 
D)  The rate at which the consumer is willing to exchange one good for another, given the prices of the goods 
A)  The rate at which the consumer is willing to exchange one good for another, given the level of utility 
B)  The rate at which the consumer is willing to exchange one good for another, given the amounts consumed 
C)  The rate at which the consumer is willing to exchange one good for another, given the consumer's income 
D)  The rate at which the consumer is willing to exchange one good for another, given the prices of the goods

Question 2

Consider two activities: Attending economics class and reading an economics textbook.Zack thinks he can learn economics by either attending class or reading the textbook.Zoe knows she learns best by both attending class and reading the textbook.Use indifference curves to illustrate each person's preferences for attending class and reading the text.

Accepted Answer

The answer of Consider two activities: Attending economics class and...

Question 3

From the modern "ordinalist" perspective,the scale used to measure utility

Accepted Answer

A)  Provides an absolute measure of human well-being 
B)  Is completely arbitrary 
C)  Summarizes information about the intensity of preferences 
D)  Is the same for each consumer 
A)  Provides an absolute measure of human well-being 
B)  Is completely arbitrary 
C)  Summarizes information about the intensity of preferences 
D)  Is the same for each consumer

Question 4

-Refer to Figure 4.4.Which diagram most likely represents the indifference map for left shoes and right shoes?

Accepted Answer

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

Question 5

Using a carefully-labeled graph,explain the concept of declining marginal rate of substitution.Why would we expect indifference curves to exhibit this characteristic?

Accepted Answer

@#IMG-DLM& When a consumer has a relatively small

Question 6

Homer and Marge both enjoy lasagna and wine.Homer's utility function is given by U(L.W)= 12L + 4W.Marge's utility function is given by U(L,W)= 2L + 2W.In each function,L stands for plates of lasagna and W stands for glasses of wine.Would Homer and Marge agree to a trade in which Homer gives Marge a plate of lasagna in exchange for two glasses of wine?

Accepted Answer

For Homer,MU_L = 12 and MU_W = 4,therefore t

Question 7

According to the more-is-better principle,

Accepted Answer

A)  A consumer will always select the bundle that is ranked highest among all alternative bundles 
B)  A consumer will prefer a bundle that has the largest amount of the good they prefer most 
C)  Consumers always try to achieve the highest possible level of well-being 
D)  When comparing two consumption bundles, a consumer prefers the bundle that has more of every good 
A)  A consumer will always select the bundle that is ranked highest among all alternative bundles 
B)  A consumer will prefer a bundle that has the largest amount of the good they prefer most 
C)  Consumers always try to achieve the highest possible level of well-being 
D)  When comparing two consumption bundles, a consumer prefers the bundle that has more of every good

Question 8

Two products are perfect substitutes if

Accepted Answer

A)  A consumer is willing to swap one for another at a fixed rate 
B)  They are valuable only when used together in fixed proportions 
C)  Their indifference curves are "L-shaped" 
D)  An increase in the price of one good causes a decrease in the demand for the other good 
A)  A consumer is willing to swap one for another at a fixed rate 
B)  They are valuable only when used together in fixed proportions 
C)  Their indifference curves are "L-shaped" 
D)  An increase in the price of one good causes a decrease in the demand for the other good

Question 9

Rates of substitution are determined by

Accepted Answer

A)  The consumer's income 
B)  The consumer's preferences 
C)  The number of available consumption bundles 
D)  The prices of different goods 
A)  The consumer's income 
B)  The consumer's preferences 
C)  The number of available consumption bundles 
D)  The prices of different goods

Question 10

Which of the following statements regarding preferences and indifference curves is true?

Accepted Answer

A)  When choosing between two consumption bundles, a consumer will always prefer the consumption bundle on the lower indifference curve 
B)  A consumer is indifferent between two consumption bundles that are on the same indifference curve 
C)  When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the right on an indifference curve 
D)  When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the left on an indifference curve 
A)  When choosing between two consumption bundles, a consumer will always prefer the consumption bundle on the lower indifference curve 
B)  A consumer is indifferent between two consumption bundles that are on the same indifference curve 
C)  When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the right on an indifference curve 
D)  When choosing between two consumption bundles, a consumer will always prefer the consumption bundle that is farthest to the left on an indifference curve

Question 11

Suppose Bart's MRS for sodas with chips is 6 bags of chips per soda.Also assume that Lisa's MRS for sodas with chips is 8 bags of chips per soda.Assuming that these rates of substitution don't depend on the amounts consumed,which of the following trades would make Bart and Lisa better off?

Accepted Answer

A)  Bart gives Lisa 9 bags of chips in exchange for a soda 
B)  Bart gives Lisa 7 bags of chips in exchange for a soda 
C)  Bart gives Lisa 6 bags of chips in exchange for a soda 
D)  No mutually beneficial trade can occur here 
A)  Bart gives Lisa 9 bags of chips in exchange for a soda 
B)  Bart gives Lisa 7 bags of chips in exchange for a soda 
C)  Bart gives Lisa 6 bags of chips in exchange for a soda 
D)  No mutually beneficial trade can occur here

Question 12

Which of the following correctly expresses the relationship between the marginal utilities of two goods and marginal rate of substitution between the goods?

Accepted Answer

A)  MRSXY = (MUY/MUX) 
B)  MRSXY = (MUX/MUY) 
C)  MRSXY = (U/∆X) 
D)  MRSXY = (U/∆Y) 
A)  MRSXY = (MUY/MUX) 
B)  MRSXY = (MUX/MUY) 
C)  MRSXY = (U/∆X) 
D)  MRSXY = (U/∆Y)

Question 13

When faced with all available alternatives,the consumer will select the one that is ranked the highest.This principle is called

Accepted Answer

A)  The choice principle 
B)  The ranking principle 
C)  The consumption principle 
D)  The more-is-better principle 
A)  The choice principle 
B)  The ranking principle 
C)  The consumption principle 
D)  The more-is-better principle

Question 14

When there is a low degree of complimentarily between two products,then their indifference curves will

Accepted Answer

A)  Be reasonably close to straight lines 
B)  Be perfectly straight lines 
C)  Bend sharply 
D)  Be positively sloped 
A)  Be reasonably close to straight lines 
B)  Be perfectly straight lines 
C)  Bend sharply 
D)  Be positively sloped

Question 15

Ultimately,the opportunity for mutually beneficial trade between two individuals is based on

Accepted Answer

A)  The marginal utilities each consumer derives from each good 
B)  The price each consumer is will to pay for each good 
C)  The degree of substitutability of each good 
D)  A comparison of the individuals' utility function 
A)  The marginal utilities each consumer derives from each good 
B)  The price each consumer is will to pay for each good 
C)  The degree of substitutability of each good 
D)  A comparison of the individuals' utility function

Question 16

According to influential moral philosopher Jeremy Bentham,

Accepted Answer

A)  Utility functions should provide cardinal information about preferences 
B)  The aim of public policy should maximize an individual's utility 
C)  Utility functions should provide ordinal information about preferences 
D)  Public policy decisions should be based on ordinal utility 
A)  Utility functions should provide cardinal information about preferences 
B)  The aim of public policy should maximize an individual's utility 
C)  Utility functions should provide ordinal information about preferences 
D)  Public policy decisions should be based on ordinal utility

Question 17

If two consumption bundles lie on the same indifference curve,then

Accepted Answer

A)  The consumer prefers the bundle that is farthest from the origin 
B)  The consumer does not prefer one bundle over the other 
C)  The consumer prefers the bundle that is farthest to the right on the indifference curve 
D)  The consumer prefers the bundle that is farthest to the left on the indifference curve 
A)  The consumer prefers the bundle that is farthest from the origin 
B)  The consumer does not prefer one bundle over the other 
C)  The consumer prefers the bundle that is farthest to the right on the indifference curve 
D)  The consumer prefers the bundle that is farthest to the left on the indifference curve

Question 18

Which of the following is NOT a property of indifference curves?

Accepted Answer

A)  Indifference curves are thin 
B)  Indifference curves may slope upward or downward 
C)  Indifference curves from the same family never cross 
D)  A consumer prefers to be on the indifference curve that is farthest from the origin 
A)  Indifference curves are thin 
B)  Indifference curves may slope upward or downward 
C)  Indifference curves from the same family never cross 
D)  A consumer prefers to be on the indifference curve that is farthest from the origin

Question 19

As we move down and to the right along an indifference curve,the marginal rate of substitution

Accepted Answer

A)  Increases 
B)  Decreases 
C)  Remains constant 
D)  Increases, then decreases 
A)  Increases 
B)  Decreases 
C)  Remains constant 
D)  Increases, then decreases

Question 20

Intuitively,the marginal rate of substitution for X with Y does not tell us

Accepted Answer

A)  How much Y a consumer needs to compensate them for a little less X 
B)  How much X must be taken away from a consumer to compensate them for an increase in Y 
C)  How much X a consumer needs to compensate them for a little less Y 
D)  How much more Y the consumer will buy if the price of Y increases 
A)  How much Y a consumer needs to compensate them for a little less X 
B)  How much X must be taken away from a consumer to compensate them for an increase in Y 
C)  How much X a consumer needs to compensate them for a little less Y 
D)  How much more Y the consumer will buy if the price of Y increases

A marginal rate of substitution formula tells us

From the modern "ordinalist" perspective,the scale used to measure utility

-Refer to Figure 4.4.Which diagram most likely represents the indifference map for left shoes and right shoes?

Using a carefully-labeled graph,explain the concept of declining marginal rate of substitution.Why would we expect indifference curves to exhibit this characteristic?

According to the more-is-better principle,

Two products are perfect substitutes if

Rates of substitution are determined by

Which of the following statements regarding preferences and indifference curves is true?

Suppose Bart's MRS for sodas with chips is 6 bags of chips per soda.Also assume that Lisa's MRS for sodas with chips is 8 bags of chips per soda.Assuming that these rates of substitution don't depend on the amounts consumed,which of the following trades would make Bart and Lisa better off?

Which of the following correctly expresses the relationship between the marginal utilities of two goods and marginal rate of substitution between the goods?

When faced with all available alternatives,the consumer will select the one that is ranked the highest.This principle is called

When there is a low degree of complimentarily between two products,then their indifference curves will

Ultimately,the opportunity for mutually beneficial trade between two individuals is based on

According to influential moral philosopher Jeremy Bentham,

If two consumption bundles lie on the same indifference curve,then

Which of the following is NOT a property of indifference curves?

As we move down and to the right along an indifference curve,the marginal rate of substitution

Intuitively,the marginal rate of substitution for X with Y does not tell us

Introduction

Supply and Demand3

Balancing Benefits and Costs

Constraints, Choices, and Demand

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 4: Principles and Preferences

A marginal rate of substitution formula tells us

From the modern "ordinalist" perspective,the scale used to measure utility

-Refer to Figure 4.4.Which diagram most likely represents the indifference map for left shoes and right shoes?

Using a carefully-labeled graph,explain the concept of declining marginal rate of substitution.Why would we expect indifference curves to exhibit this characteristic?

According to the more-is-better principle,

Two products are perfect substitutes if

Rates of substitution are determined by

Which of the following statements regarding preferences and indifference curves is true?

Suppose Bart's MRS for sodas with chips is 6 bags of chips per soda.Also assume that Lisa's MRS for sodas with chips is 8 bags of chips per soda.Assuming that these rates of substitution don't depend on the amounts consumed,which of the following trades would make Bart and Lisa better off?

Which of the following correctly expresses the relationship between the marginal utilities of two goods and marginal rate of substitution between the goods?

When faced with all available alternatives,the consumer will select the one that is ranked the highest.This principle is called

When there is a low degree of complimentarily between two products,then their indifference curves will

Ultimately,the opportunity for mutually beneficial trade between two individuals is based on

According to influential moral philosopher Jeremy Bentham,

If two consumption bundles lie on the same indifference curve,then

Which of the following is NOT a property of indifference curves?

As we move down and to the right along an indifference curve,the marginal rate of substitution

Intuitively,the marginal rate of substitution for X with Y does not tell us

Introduction

Supply and Demand3

Balancing Benefits and Costs

Constraints, Choices, and Demand

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