Question 1

-Refer to Figure 4.2.The marginal rate of substitution for economics books with CDs is highest at point

Accepted Answer

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

Question 2

Dane consumes both hamburgers and pizza.Suppose the formula for his indifference curves is H = U - 2P where H stands for the number of hamburgers,P stands for the number of pizzas and U represents utility.Which of the following statements is true?

Accepted Answer

A)  Dane prefers a consumption bundle with 5 hamburgers and 4 pizzas to a consumption bundle with 10 hamburgers and 2 pizzas 
B)  Dane prefers a consumption bundle with 8 hamburgers and 3 pizza to a consumption bundle with 14 hamburgers and 1 pizzas 
C)  Dane is indifferent between a consumption bundle with 10 hamburgers and 2 pizzas and a consumption bundle with 8 hamburgers and 3 pizzas 
D)  Dane is indifferent between a consumption bundle with 5 hamburgers and 4 pizzas and a consumption bundle with 8 hamburgers and 3 pizzas 
A)  Dane prefers a consumption bundle with 5 hamburgers and 4 pizzas to a consumption bundle with 10 hamburgers and 2 pizzas 
B)  Dane prefers a consumption bundle with 8 hamburgers and 3 pizza to a consumption bundle with 14 hamburgers and 1 pizzas 
C)  Dane is indifferent between a consumption bundle with 10 hamburgers and 2 pizzas and a consumption bundle with 8 hamburgers and 3 pizzas 
D)  Dane is indifferent between a consumption bundle with 5 hamburgers and 4 pizzas and a consumption bundle with 8 hamburgers and 3 pizzas

Question 3

A utility function is a mathematical formula that assigns to each consumption bundle a numeric value that represents the

Accepted Answer

A)  Opportunity cost of consuming the bundle 
B)  Consumer's relative well-being from consuming the bundle 
C)  Price the consumer would pay for the bundle 
D)  Rates of substitution of the goods in the bundle 
A)  Opportunity cost of consuming the bundle 
B)  Consumer's relative well-being from consuming the bundle 
C)  Price the consumer would pay for the bundle 
D)  Rates of substitution of the goods in the bundle

Question 4

Suppose Joe's MRS for cookies with crackers is 6 crackers per cookie.Also assume that Mary's MRS for cookies with crackers is 3 crackers per cookie.Assuming that these rates of substitution don't depend on the amounts consumed,which of the following trades would make Joe and Mary better off?

Accepted Answer

A)  Joe gives Mary 5 crackers in exchange for a cookie 
B)  Joe gives Mary 2 crackers in exchange for a cookie 
C)  Joe gives Mary 6 crackers in exchange for a cookie 
D)  There is not enough information to answer the question 
A)  Joe gives Mary 5 crackers in exchange for a cookie 
B)  Joe gives Mary 2 crackers in exchange for a cookie 
C)  Joe gives Mary 6 crackers in exchange for a cookie 
D)  There is not enough information to answer the question

Question 5

Assume that if an individual prefers X to Y and prefers Y to Z.Then the consumer must also prefer X to Z.This property is called

Accepted Answer

A)  Transitivity 
B)  Completeness 
C)  The ranking principle 
D)  The choice principle 
A)  Transitivity 
B)  Completeness 
C)  The ranking principle 
D)  The choice principle

Question 6

If Anne receives more satisfaction as she consumes more shoes,then

Accepted Answer

A)  The marginal utility of shoes is positive 
B)  The marginal utility of shoes is negative 
C)  The marginal utility of shoes is constant 
D)  The marginal utility of shoes is zero 
A)  The marginal utility of shoes is positive 
B)  The marginal utility of shoes is negative 
C)  The marginal utility of shoes is constant 
D)  The marginal utility of shoes is zero

Question 7

-Refer to Table 4.1.If Mike starts with 3 CDs and 2 economics books,would he be willing to trade one CD for an economics book?

Accepted Answer

A)  Yes, because the bundle with 2 CDs and 3 economics books is ranked higher than the bundle with 3 CDs and 2 economics books 
B)  No, because the bundle with 2 CDs and 3 economics books is ranked higher than the bundle with 3 CDs and 2 economics books 
C)  Yes, because the bundle with 3 CDs and 2 economics books is ranked higher than the bundle with 2 CDs and 3 economics books 
D)  No, because the bundle with 3 CDs and 2 economics books is ranked higher than the bundle with 2 CDs and 3 economics books 
A)  Yes, because the bundle with 2 CDs and 3 economics books is ranked higher than the bundle with 3 CDs and 2 economics books 
B)  No, because the bundle with 2 CDs and 3 economics books is ranked higher than the bundle with 3 CDs and 2 economics books 
C)  Yes, because the bundle with 3 CDs and 2 economics books is ranked higher than the bundle with 2 CDs and 3 economics books 
D)  No, because the bundle with 3 CDs and 2 economics books is ranked higher than the bundle with 2 CDs and 3 economics books

-Refer to Figure 4.2.The marginal rate of substitution for economics books with CDs is highest at point

Dane consumes both hamburgers and pizza.Suppose the formula for his indifference curves is H = U - 2P where H stands for the number of hamburgers,P stands for the number of pizzas and U represents utility.Which of the following statements is true?

A utility function is a mathematical formula that assigns to each consumption bundle a numeric value that represents the

Suppose Joe's MRS for cookies with crackers is 6 crackers per cookie.Also assume that Mary's MRS for cookies with crackers is 3 crackers per cookie.Assuming that these rates of substitution don't depend on the amounts consumed,which of the following trades would make Joe and Mary better off?

Assume that if an individual prefers X to Y and prefers Y to Z.Then the consumer must also prefer X to Z.This property is called

If Anne receives more satisfaction as she consumes more shoes,then

-Refer to Table 4.1.If Mike starts with 3 CDs and 2 economics books,would he be willing to trade one CD for an economics book?

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

-Refer to Figure 4.2.The marginal rate of substitution for economics books with CDs is highest at point

Dane consumes both hamburgers and pizza.Suppose the formula for his indifference curves is H = U - 2P where H stands for the number of hamburgers,P stands for the number of pizzas and U represents utility.Which of the following statements is true?

A utility function is a mathematical formula that assigns to each consumption bundle a numeric value that represents the

Suppose Joe's MRS for cookies with crackers is 6 crackers per cookie.Also assume that Mary's MRS for cookies with crackers is 3 crackers per cookie.Assuming that these rates of substitution don't depend on the amounts consumed,which of the following trades would make Joe and Mary better off?

Assume that if an individual prefers X to Y and prefers Y to Z.Then the consumer must also prefer X to Z.This property is called

If Anne receives more satisfaction as she consumes more shoes,then

-Refer to Table 4.1.If Mike starts with 3 CDs and 2 economics books,would he be willing to trade one CD for an economics book?

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