Question 1

For most goods, as we move down an indifference curve:

Accepted Answer

A)  the slope gets flatter. 
B)  the slope gets steeper. 
C)  the slope stays the same. 
D)  total utility decreases. 
A)  the slope gets flatter. 
B)  the slope gets steeper. 
C)  the slope stays the same. 
D)  total utility decreases.

Question 2

Higher indifference curves represent:

Accepted Answer

A)  less utility than lower indifference curves. 
B)  more utility than lower indifference curves. 
C)  the same level of utility as lower indifference curves. 
D)  unknown levels of utility compared to lower indifference curves. 
A)  less utility than lower indifference curves. 
B)  more utility than lower indifference curves. 
C)  the same level of utility as lower indifference curves. 
D)  unknown levels of utility compared to lower indifference curves.

Question 3

When Laurie asks Matt if he wants a large popcorn and small soda or a large soda and small popcorn, Matt says, "Oh, I'm indifferent." This means Matt:

Accepted Answer

A)  doesn't want popcorn and soda. 
B)  thinks both bundles give him the same utility. 
C)  thinks neither bundle gives him utility. 
D)  thinks the utility he gained from popcorn and soda exactly equals their cost. 
A)  doesn't want popcorn and soda. 
B)  thinks both bundles give him the same utility. 
C)  thinks neither bundle gives him utility. 
D)  thinks the utility he gained from popcorn and soda exactly equals their cost.

Question 4

LaToya sees honey and sugar as perfect substitutes. She is always willing to substitute 1 teaspoon of honey for 2 teaspoons of sugar. If honey is twice as expensive as sugar, LaToya will:

Accepted Answer

A)  use only honey. 
B)  use only sugar. 
C)  use a lot of honey and a little sugar. 
D)  be willing to purchase either sugar or honey. 
A)  use only honey. 
B)  use only sugar. 
C)  use a lot of honey and a little sugar. 
D)  be willing to purchase either sugar or honey.

Question 5

Use the following to answer questions 
Figure: Indifference Curve Map I  
-(Figure: Indifference Curve Map I) Look at the figure Indifference Curve Map I. It shows that:

Accepted Answer

A)  bundles B and D provide the same level of utility. 
B)  bundle A is preferred to bundle B. 
C)  bundle D is preferred to bundle C, which is preferred to bundles A and B. 
D)  bundle C provides the highest level of utility. 
A)  bundles B and D provide the same level of utility. 
B)  bundle A is preferred to bundle B. 
C)  bundle D is preferred to bundle C, which is preferred to bundles A and B. 
D)  bundle C provides the highest level of utility.

Question 6

Which of the following is NOT TRUE of indifference curves for ordinary goods?

Accepted Answer

A)  They never cross. 
B)  They slope downward. 
C)  They are convex from the origin. 
D)  Indifference curves farther from the origin have lower levels of utility. 
A)  They never cross. 
B)  They slope downward. 
C)  They are convex from the origin. 
D)  Indifference curves farther from the origin have lower levels of utility.

Question 7

Use the following to answer questions :  
-(Table: Bundles of X and Y) Look at the table Bundles of X and Y. According to the table:

Accepted Answer

A)  bundle D is preferred to bundles A and B. 
B)  the consumer is indifferent among bundles A, B, and C. 
C)  bundles C and D are both preferred to bundles A and B. 
D)  bundle C is preferred to all other bundles. 
A)  bundle D is preferred to bundles A and B. 
B)  the consumer is indifferent among bundles A, B, and C. 
C)  bundles C and D are both preferred to bundles A and B. 
D)  bundle C is preferred to all other bundles.

Question 8

Use the following to answer questions 
Figure: The Indifference Curve Map II  
-(Figure: The Indifference Curve Map II) Look at the figure The Indifference Curve Map II. Sara enjoys attending Chicago Cubs baseball games and eating baby back rib dinners. The figure shows two of her indifference curves for Cubs tickets and baby back rib dinners. If she consumes 20 baby back rib dinners and 4 tickets to Cubs games, she would be equally happy to give up 8 dinners for _____ more ticket(s) to Cubs games.

Accepted Answer

A)  1 
B)  0.5 
C)  2 
D)  4 
A)  1 
B)  0.5 
C)  2 
D)  4

Question 9

Use the following to answer questions 
Figure: Consumer Equilibrium I
The figure shows three of Owen's indifference curves for pizza and soda per week. Owen has $180 per month to spend on the two goods. The price of a pizza is $20, and the price of a soda is $1.50.  
-(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. What is Owen's optimal consumption bundle?

Accepted Answer

A)  4 pizzas and 150 sodas 
B)  8 pizzas and 40 sodas 
C)  6 pizzas and 40 sodas 
D)  14 pizzas and 20 sodas 
A)  4 pizzas and 150 sodas 
B)  8 pizzas and 40 sodas 
C)  6 pizzas and 40 sodas 
D)  14 pizzas and 20 sodas

Question 10

Use the following to answer questions 
Figure: Consumer Equilibrium I
The figure shows three of Owen's indifference curves for pizza and soda per week. Owen has $180 per month to spend on the two goods. The price of a pizza is $20, and the price of a soda is $1.50.  
-(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. What is Owen's marginal rate of substitution of pizza for soda when he is consuming his optimal consumption bundle?

Accepted Answer

A)  0.75 
B)  1.5 
C)  13.3 
D)  20 
A)  0.75 
B)  1.5 
C)  13.3 
D)  20

Question 11

Use the following to answer question 
Figure: The Optimal Choice of CDs and Movies  
-(Figure: The Optimal Choice of CDs and Movies) Look at the figure The Optimal Choice of CDs and Movies. Nina likes to spend her income on new CDs (CD) and tickets to see movies (M). The graph shows Nina's budget line and the optimal consumption bundle E. What is the price of movies in terms of CDs at point E?

Accepted Answer

A)  0.33 
B)  1.33 
C)  MUCD / MUM 
D)  PCD / PM 
A)  0.33 
B)  1.33 
C)  MUCD / MUM 
D)  PCD / PM

Question 12

Mario sees popcorn and pretzels as perfect substitutes. He is always willing to substitute 3 cups of popcorn for 1 cup of pretzels. His indifference curves for popcorn and pretzels are _____, and at the optimal consumption bundle his marginal rate of substitution of popcorn for pretzels is _____.

Accepted Answer

A)  right angles; 3 
B)  right angles; 0.33 
C)  straight lines; 3 
D)  straight lines; 0.33 
A)  right angles; 3 
B)  right angles; 0.33 
C)  straight lines; 3 
D)  straight lines; 0.33

Question 13

Use the following to answer questions :  
-(Table: Bundles of X and Y) Look at the table Bundles of X and Y. Bundle(s):

Accepted Answer

A)  A and B are on the same indifference curve. 
B)  A and C are on the same indifference curve. 
C)  D is on the highest indifference curve. 
D)  C is on the highest indifference curve, and bundles A and B are on the lowest indifference curve. 
A)  A and B are on the same indifference curve. 
B)  A and C are on the same indifference curve. 
C)  D is on the highest indifference curve. 
D)  C is on the highest indifference curve, and bundles A and B are on the lowest indifference curve.

Question 14

Use the following to answer questions 
Figure: The Indifference Curve Map II  
-(Figure: The Indifference Curve Map II) Look at the figure The Indifference Curve Map II. Sara enjoys attending Chicago Cubs baseball games and eating baby back rib dinners. The figure shows two of her indifference curves for Cubs tickets and baby back rib dinners. If she consumes 20 baby back rib dinners and 6 tickets to Cubs games, she would be equally happy to give up 8 dinners for _____ more ticket(s) to Cubs games.

Accepted Answer

A)  1 
B)  0.5 
C)  3 
D)  4 
A)  1 
B)  0.5 
C)  3 
D)  4

Question 15

Jake considers fries and onion rings perfect substitutes. The indifference curve between fries and onion rings must be:

Accepted Answer

A)  a right angle. 
B)  concave. 
C)  perfectly vertical. 
D)  a straight line. 
A)  a right angle. 
B)  concave. 
C)  perfectly vertical. 
D)  a straight line.

Question 16

LaToya sees honey and sugar as perfect substitutes. She is always willing to substitute 1 teaspoon of honey for 2 teaspoons of sugar. If honey is three times as expensive as sugar, LaToya will use:

Accepted Answer

A)  only honey. 
B)  only sugar. 
C)  some honey and some sugar. 
D)  a lot of sugar and a little honey. 
A)  only honey. 
B)  only sugar. 
C)  some honey and some sugar. 
D)  a lot of sugar and a little honey.

Question 17

Use the following to answer questions 
Figure: Consumer Equilibrium I
The figure shows three of Owen's indifference curves for pizza and soda per week. Owen has $180 per month to spend on the two goods. The price of a pizza is $20, and the price of a soda is $1.50.  
-(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. If Owen consumes 1.5 pizzas and 100 sodas, he:

Accepted Answer

A)  is maximizing his total utility. 
B)  should consume more pizza and less soda to maximize his total utility. 
C)  should consume less pizza and more soda to maximize his total utility. 
D)  should consume more pizza and more soda to maximize his total utility. 
A)  is maximizing his total utility. 
B)  should consume more pizza and less soda to maximize his total utility. 
C)  should consume less pizza and more soda to maximize his total utility. 
D)  should consume more pizza and more soda to maximize his total utility.

Question 18

If Coke and Pepsi are perfect substitutes for Lynn, her indifference curves are:

Accepted Answer

A)  right angles. 
B)  concave from the origin. 
C)  downward-sloping straight lines. 
D)  vertical lines. 
A)  right angles. 
B)  concave from the origin. 
C)  downward-sloping straight lines. 
D)  vertical lines.

Question 19

Use the following to answer question 
Figure: A Budget Constraint for CDs and Movies  
-(Figure: A Budget Constraint for CDs and Movies) Look at the figure A Budget Constraint for CDs and Movies. Chantal likes to spend her weekly income on new CDs and tickets to see movies. The price of a CD is $12 and the movie ticket price is $10. The graph shows Chantal's budget line. What is her weekly income?

Accepted Answer

A)  $240 
B)  $100 
C)  $120 
D)  $22 
A)  $240 
B)  $100 
C)  $120 
D)  $22

Question 20

Max consumes only yogurt and almonds, and he is on his highest possible indifference curve. Bundle A (4 yogurts and 2 almonds) and bundle B (3 yogurts and 3 almonds) are on this indifference curve. Between points A and B, what is Max's marginal rate of substitution of yogurt for almonds?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  1.33 
A)  1 
B)  2 
C)  3 
D)  1.33

Exam 34: Consumer Preferences and Consumer Choice

For most goods, as we move down an indifference curve:

Higher indifference curves represent:

When Laurie asks Matt if he wants a large popcorn and small soda or a large soda and small popcorn, Matt says, "Oh, I'm indifferent." This means Matt:

LaToya sees honey and sugar as perfect substitutes. She is always willing to substitute 1 teaspoon of honey for 2 teaspoons of sugar. If honey is twice as expensive as sugar, LaToya will:

Use the following to answer questions Figure: Indifference Curve Map I -(Figure: Indifference Curve Map I) Look at the figure Indifference Curve Map I. It shows that:

Which of the following is NOT TRUE of indifference curves for ordinary goods?

Use the following to answer questions : -(Table: Bundles of X and Y) Look at the table Bundles of X and Y. According to the table:

Mario sees popcorn and pretzels as perfect substitutes. He is always willing to substitute 3 cups of popcorn for 1 cup of pretzels. His indifference curves for popcorn and pretzels are _____, and at the optimal consumption bundle his marginal rate of substitution of popcorn for pretzels is _____.

Use the following to answer questions : -(Table: Bundles of X and Y) Look at the table Bundles of X and Y. Bundle(s):

Jake considers fries and onion rings perfect substitutes. The indifference curve between fries and onion rings must be:

LaToya sees honey and sugar as perfect substitutes. She is always willing to substitute 1 teaspoon of honey for 2 teaspoons of sugar. If honey is three times as expensive as sugar, LaToya will use:

If Coke and Pepsi are perfect substitutes for Lynn, her indifference curves are:

Max consumes only yogurt and almonds, and he is on his highest possible indifference curve. Bundle A (4 yogurts and 2 almonds) and bundle B (3 yogurts and 3 almonds) are on this indifference curve. Between points A and B, what is Max's marginal rate of substitution of yogurt for almonds?

First Principles

Economic Models- Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas- Meddling With Markets

Elasticity

Taxes

The Rational Consumer

International Trade

Decision Making by Individuals and Firms

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Macroeconomics- the Big Picture

Gdp and the Consumer Price Index

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Macroeconomics- Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

Toward a Fuller Understanding

Indifference Curve Analysis of Labor Supply

Filters

Mario sees popcorn and pretzels as perfect substitutes. He is always willing to substitute 3 cups of popcorn for 1 cup of pretzels. His indifference curves for popcorn and pretzels are _, and at the optimal consumption bundle his marginal rate of substitution of popcorn for pretzels is _.