Question 1

The ratio of the marginal utility of coffee to the marginal utility of donuts is four for an individual maximizing utility. This implies that

Accepted Answer

A)  a donut is four times more valuable than a cup of coffee. 
B)  the coffee to donuts price ratio is one to four. 
C)  the coffee to donuts price ratio is four to one. 
D)  this person always eats donuts with coffee. 
A)  a donut is four times more valuable than a cup of coffee. 
B)  the coffee to donuts price ratio is one to four. 
C)  the coffee to donuts price ratio is four to one. 
D)  this person always eats donuts with coffee. C

Question 2

A car's real cost is its opportunity cost. Opportunity cost is determined by

Accepted Answer

A)  the price of the car. 
B)  relative prices. 
C)  wealth. 
D)  the prices of the goods that are compliments to a car. 
A)  the price of the car. 
B)  relative prices. 
C)  wealth. 
D)  the prices of the goods that are compliments to a car. B

Question 3

Refer to the information provided in Figure 6.2 below to answer the questions that follow.   Figure 6.2
-Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a gardenburger is $6, Mr. Lingle's monthly income is

Accepted Answer

A)  $24. 
B)  $60. 
C)  $200. 
D)  $240. 
A)  $24. 
B)  $60. 
C)  $200. 
D)  $240. D

Question 4

Refer to the information provided in Figure 6.4 below to answer the questions that follow.   Figure 6.4
-Refer to Figure 6.4. Bill's budget constraint is AC. If the black bean price decreases, Bill's budget constraint will be

Accepted Answer

A)  AO. 
B)  AB. 
C)  AC. 
D)  AD. 
A)  AO. 
B)  AB. 
C)  AC. 
D)  AD.

Question 5

Refer to the information provided in Figure 6.11 below to answer the question that follows.   Figure 6.11
-Refer to Figure 6.11. Gordon's opportunity cost of one hour of leisure is

Accepted Answer

A)  $10. 
B)  $24. 
C)  $240. 
D)  indeterminate from this information. 
A)  $10. 
B)  $24. 
C)  $240. 
D)  indeterminate from this information.

Question 6

Refer to the information provided in Table 6.1 below to answer the questions that follow.
Table 6.1
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Number of } \
\text { Hamburgers per } \
\text { Day }
\end{array} & \text { Total Utility } & \text { Marginal Utility } \
\hline 1 & 30 & \
2 & 52 & \
3 & 67 & \
4 & 76 &  \
5 & & 4\
\hline \text { Number of } & \text { Total Utility } & \text { Marginal Utility } \
\text { Sodas per Day } &  & \
\hline 1 & 20 & \
2 & 35 & \
3 & 47 &  \
4 & 57& \
5 & &7\
\hline
\end{array}$$
-Refer to Table 6.1. If the price of a soda is $2, the price of a hamburger is $6, and George has $14 of income, George's utility maximizing combination of sodas and hamburgers per day is

Accepted Answer

A)  1 soda and 2 hamburgers. 
B)  4 sodas and 1 hamburger. 
C)  3 sodas and 1.5 hamburgers. 
D)  indeterminate from this information. 
A)  1 soda and 2 hamburgers. 
B)  4 sodas and 1 hamburger. 
C)  3 sodas and 1.5 hamburgers. 
D)  indeterminate from this information.

Question 7

Refer to the information provided in Figure 6.1 below to answer the questions that follow.   Figure 6.1
-Refer to Figure 6.1. The slope of budget constraint AC is

Accepted Answer

A)  -5.0. 
B)  -2.0. 
C)  -0.5. 
D)  indeterminate from this information because prices are not given. 
A)  -5.0. 
B)  -2.0. 
C)  -0.5. 
D)  indeterminate from this information because prices are not given.

Question 8

If the substitution effect of a wage change outweighs the income effect of a wage change, the labor-supply curve is

Accepted Answer

A)  upward sloping. 
B)  horizontal. 
C)  vertical. 
D)  backward bending. 
A)  upward sloping. 
B)  horizontal. 
C)  vertical. 
D)  backward bending.

Question 9

Refer to the information provided in Figure 6.3 below to answer the questions that follow.   Figure 6.3
-Refer to Figure 6.3. Molly's budget constraint is AC. Molly can purchase

Accepted Answer

A)  none of the points along AD. 
B)  all of the points along AB. 
C)  all of the points along BD. 
D)  none of the points along AC. 
A)  none of the points along AD. 
B)  all of the points along AB. 
C)  all of the points along BD. 
D)  none of the points along AC.

Question 10

We derive the demand curve for X from indifference curves and a budget constraint by changing the

Accepted Answer

A)  level of income. 
B)  price of X. 
C)  price of Y. 
D)  consumersʹ preferences. 
A)  level of income. 
B)  price of X. 
C)  price of Y. 
D)  consumersʹ preferences.

Question 11

Jim has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. The clothing and food pairs in Jim's choice set include ________ units of clothing and ________ units of food.

Accepted Answer

A)  20; 50 
B)  15; 70 
C)  10; 60 
D)  0; 200 
A)  20; 50 
B)  15; 70 
C)  10; 60 
D)  0; 200

Question 12

Refer to the information provided in Figure 6.2 below to answer the questions that follow.   Figure 6.2
-Refer to Figure 6.2. The slope of budget constraint AC is

Accepted Answer

A)  -1/2. 
B)  -1. 
C)  -2. 
D)  indeterminate from this information because prices are not given. 
A)  -1/2. 
B)  -1. 
C)  -2. 
D)  indeterminate from this information because prices are not given.

Question 13

Refer to the information provided in Figure 6.1 below to answer the questions that follow.   Figure 6.1
-Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $4.00. Tom's monthly income is

Accepted Answer

A)  $20. 
B)  $60. 
C)  $80. 
D)  $100. 
A)  $20. 
B)  $60. 
C)  $80. 
D)  $100.

Question 14

Refer to the information provided in Figure 6.8 below to answer the questions that follow.   Figure 6.8
-Refer to Figure 6.8. The marginal utility of the fourth movie rental is

Accepted Answer

A)  0. 
B)  3. 
C)  25. 
D)  28. 
A)  0. 
B)  3. 
C)  25. 
D)  28.

Question 15

Refer to the information provided in Figure 6.4 below to answer the questions that follow.   Figure 6.4
-Refer to Figure 6.4. Bill's budget constraint is AC. His budget constraint would shift to AB if the price of

Accepted Answer

A)  black beans increased. 
B)  black beans decreased. 
C)  bell peppers increased. 
D)  bell peppers decreased. 
A)  black beans increased. 
B)  black beans decreased. 
C)  bell peppers increased. 
D)  bell peppers decreased.

Question 16

Price increases cause a decrease in a household's choice set.

Accepted Answer

A) True 
 B)False

Question 17

Refer to the information provided in Figure 6.1 below to answer the questions that follow.   Figure 6.1
-Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hamburger

Accepted Answer

A)  is 1/4 of a hot dog. 
B)  is 1/2 of a hot dog. 
C)  is 2 hot dogs. 
D)  changes as you move down along the budget constraint. 
A)  is 1/4 of a hot dog. 
B)  is 1/2 of a hot dog. 
C)  is 2 hot dogs. 
D)  changes as you move down along the budget constraint.

Question 18

Refer to the information provided in Figure 6.14 below to answer the questions that follow.     Figure 6.14
-Refer to Figure 6.14. Assume Ellen has two products available, pizza and hamburgers. Ellen must be compensated with more pizzas as she gives up more burgers. The curve in Panel ________ represents her indifference curve.

Accepted Answer

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

Question 19

Kathleen likes avocado and crab dip. After eating avocado and crab dip with four crackers, she switches to cheese with crackers. We can conclude that

Accepted Answer

A)  the avocado and crab dip cannot have tasted that good. 
B)  the avocado and crab dip with crackers now has a marginal utility of zero. 
C)  at this point cheese and crackers have a higher marginal utility per dollar spent than that of avocado and crab dip with crackers. 
D)  Kathleen is no longer maximizing her utility. 
A)  the avocado and crab dip cannot have tasted that good. 
B)  the avocado and crab dip with crackers now has a marginal utility of zero. 
C)  at this point cheese and crackers have a higher marginal utility per dollar spent than that of avocado and crab dip with crackers. 
D)  Kathleen is no longer maximizing her utility.

Question 20

Refer to the information provided in Figure 6.5 below to answer the questions that follow.   Figure 6.5
-Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases and the price of CDs increases, her new budget constraint could be

Accepted Answer

A)  CD. 
B)  BD. 
C)  AD. 
D)  Both B or C are correct. 
A)  CD. 
B)  BD. 
C)  AD. 
D)  Both B or C are correct.

The ratio of the marginal utility of coffee to the marginal utility of donuts is four for an individual maximizing utility. This implies that

A car's real cost is its opportunity cost. Opportunity cost is determined by

Refer to the information provided in Figure 6.2 below to answer the questions that follow. Figure 6.2 -Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a gardenburger is $6, Mr. Lingle's monthly income is

Refer to the information provided in Figure 6.4 below to answer the questions that follow. Figure 6.4 -Refer to Figure 6.4. Bill's budget constraint is AC. If the black bean price decreases, Bill's budget constraint will be

Refer to the information provided in Figure 6.11 below to answer the question that follows. Figure 6.11 -Refer to Figure 6.11. Gordon's opportunity cost of one hour of leisure is

Refer to the information provided in Figure 6.1 below to answer the questions that follow. Figure 6.1 -Refer to Figure 6.1. The slope of budget constraint AC is

If the substitution effect of a wage change outweighs the income effect of a wage change, the labor-supply curve is

Refer to the information provided in Figure 6.3 below to answer the questions that follow. Figure 6.3 -Refer to Figure 6.3. Molly's budget constraint is AC. Molly can purchase

We derive the demand curve for X from indifference curves and a budget constraint by changing the

Jim has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. The clothing and food pairs in Jim's choice set include units of clothing and units of food.

Refer to the information provided in Figure 6.2 below to answer the questions that follow. Figure 6.2 -Refer to Figure 6.2. The slope of budget constraint AC is

Refer to the information provided in Figure 6.1 below to answer the questions that follow. Figure 6.1 -Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $4.00. Tom's monthly income is

Refer to the information provided in Figure 6.8 below to answer the questions that follow. Figure 6.8 -Refer to Figure 6.8. The marginal utility of the fourth movie rental is

Refer to the information provided in Figure 6.4 below to answer the questions that follow. Figure 6.4 -Refer to Figure 6.4. Bill's budget constraint is AC. His budget constraint would shift to AB if the price of

Price increases cause a decrease in a household's choice set.

Refer to the information provided in Figure 6.1 below to answer the questions that follow. Figure 6.1 -Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hamburger

Kathleen likes avocado and crab dip. After eating avocado and crab dip with four crackers, she switches to cheese with crackers. We can conclude that

Refer to the information provided in Figure 6.5 below to answer the questions that follow. Figure 6.5 -Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases and the price of CDs increases, her new budget constraint could be

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Social Choice

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: The Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing and Transitional Economies

Filters

Exam 6: Household Behavior and Consumer Choice

The ratio of the marginal utility of coffee to the marginal utility of donuts is four for an individual maximizing utility. This implies that

A car's real cost is its opportunity cost. Opportunity cost is determined by

Refer to the information provided in Figure 6.2 below to answer the questions that follow. Figure 6.2 -Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a gardenburger is $6, Mr. Lingle's monthly income is

Refer to the information provided in Figure 6.4 below to answer the questions that follow. Figure 6.4 -Refer to Figure 6.4. Bill's budget constraint is AC. If the black bean price decreases, Bill's budget constraint will be

Refer to the information provided in Figure 6.11 below to answer the question that follows. Figure 6.11 -Refer to Figure 6.11. Gordon's opportunity cost of one hour of leisure is

Refer to the information provided in Figure 6.1 below to answer the questions that follow. Figure 6.1 -Refer to Figure 6.1. The slope of budget constraint AC is

If the substitution effect of a wage change outweighs the income effect of a wage change, the labor-supply curve is

Refer to the information provided in Figure 6.3 below to answer the questions that follow. Figure 6.3 -Refer to Figure 6.3. Molly's budget constraint is AC. Molly can purchase

We derive the demand curve for X from indifference curves and a budget constraint by changing the

Jim has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. The clothing and food pairs in Jim's choice set include ________ units of clothing and ________ units of food.

Refer to the information provided in Figure 6.2 below to answer the questions that follow. Figure 6.2 -Refer to Figure 6.2. The slope of budget constraint AC is

Refer to the information provided in Figure 6.1 below to answer the questions that follow. Figure 6.1 -Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $4.00. Tom's monthly income is

Refer to the information provided in Figure 6.8 below to answer the questions that follow. Figure 6.8 -Refer to Figure 6.8. The marginal utility of the fourth movie rental is

Refer to the information provided in Figure 6.4 below to answer the questions that follow. Figure 6.4 -Refer to Figure 6.4. Bill's budget constraint is AC. His budget constraint would shift to AB if the price of

Price increases cause a decrease in a household's choice set.

Refer to the information provided in Figure 6.1 below to answer the questions that follow. Figure 6.1 -Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hamburger

Kathleen likes avocado and crab dip. After eating avocado and crab dip with four crackers, she switches to cheese with crackers. We can conclude that

Refer to the information provided in Figure 6.5 below to answer the questions that follow. Figure 6.5 -Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases and the price of CDs increases, her new budget constraint could be

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Social Choice

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: The Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing and Transitional Economies

Filters

Jim has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. The clothing and food pairs in Jim's choice set include units of clothing and units of food.