Question 1

Which of the following is NOT a characteristic of a typical indifference curve?

Accepted Answer

A) The curve shows all combinations of goods that give the consumer the same level of utility. 
B) As a consumer has less of a good,he is less willing to exchange less of it for one more unit of another good. 
C) The marginal rate of substitution is measured by the slope of the tangent to the curve. 
D) The curve will shift out if income increases. 
A) The curve shows all combinations of goods that give the consumer the same level of utility. 
B) As a consumer has less of a good,he is less willing to exchange less of it for one more unit of another good. 
C) The marginal rate of substitution is measured by the slope of the tangent to the curve. 
D) The curve will shift out if income increases. D

Question 2

The consumer's income is $800.
-According to the above figure,why doesn't the consumer choose the combination at point B?

Accepted Answer

A) The consumer is willing to give up more X for additional units of Y than the rate in the market. 
B) The marginal utility of Y exceeds the marginal utility of X. 
C) The marginal utility per dollar spent on Y exceeds the marginal utility per dollar spent on X. 
D) both a and c 
E) both b and c 
A) The consumer is willing to give up more X for additional units of Y than the rate in the market. 
B) The marginal utility of Y exceeds the marginal utility of X. 
C) The marginal utility per dollar spent on Y exceeds the marginal utility per dollar spent on X. 
D) both a and c 
E) both b and c D

Question 3

If Ferdinand prefers a Big Mac to a Whopper and a Whopper to a hotdog,but is indifferent between a Big Mac and a Quarter Pounder he must

Accepted Answer

A) prefer a Quarter Pounder to a hotdog. 
B) prefer a Whopper to a Quarter Pounder. 
C) be indifferent between a Quarter Pounder and a Whopper. 
D) be indifferent between a Whopper and a hotdog. 
A) prefer a Quarter Pounder to a hotdog. 
B) prefer a Whopper to a Quarter Pounder. 
C) be indifferent between a Quarter Pounder and a Whopper. 
D) be indifferent between a Whopper and a hotdog. A

Question 4

According to the Rolling Stones,"You can't always get what you want." Which does this mean in the context of utility maximization?

Accepted Answer

A) A bundle of goods between the budget line and the origin 
B) Vertical indifference curves 
C) A bundle of goods above the budget line 
D) Horizontal indifference curves 
A) A bundle of goods between the budget line and the origin 
B) Vertical indifference curves 
C) A bundle of goods above the budget line 
D) Horizontal indifference curves

Question 5

Assume James purchases only two goods,steak and chicken,with his weekly income of $60.The price of steak is $10 and the price of chicken is $5.The following table shows the marginal utility James gets from each additional pound of steak and chicken:   Given the above information,if the price of steak falls to $8,what quantities of steak and chicken should James purchase to maximize his utility?

Accepted Answer

A) 6 steak,2 chicken 
B) 5 steak,3 chicken 
C) 4 steak,4 chicken 
D) 5 steak,4 chicken 
E) 3 steak,6 chicken 
A) 6 steak,2 chicken 
B) 5 steak,3 chicken 
C) 4 steak,4 chicken 
D) 5 steak,4 chicken 
E) 3 steak,6 chicken

Question 6

The consumer's income is $800.
-According to the above figure,what are the prices of goods X and Y?

Accepted Answer

A)    = $10,
  = $8 
B)    = $8,
  = $10 
C)    = $100,
  = $80 
D)    = $20,
  = $60 
E)    = $60,
  = $20 
A)    = $10,
  = $8 
B)    = $8,
  = $10 
C)    = $100,
  = $80 
D)    = $20,
  = $60 
E)    = $60,
  = $20

Question 7

According to the following figure,at point A,

Accepted Answer

A) the marginal rate of substitution of X for Y is greater than it is at point B. 
B) the ratio of the price of X to the price of Y is greater than it is at point B. 
C) the consumer's utility is less than it is at point B. 
D) both a and c 
E) all of the above 
A) the marginal rate of substitution of X for Y is greater than it is at point B. 
B) the ratio of the price of X to the price of Y is greater than it is at point B. 
C) the consumer's utility is less than it is at point B. 
D) both a and c 
E) all of the above

Question 8

Lulu consumes only candy and cookies; she is currently buying more cookies than candy with her limited income.The last bag of candy gave Lulu the same additional utility as the last bag of cookies,and the prices of candy and cookies are the same.Lulu

Accepted Answer

A) is maximizing utility given a limited income because the prices of candy and cookies are the same. 
B) is maximizing satisfaction given a limited income because the marginal utility per dollar is the same for candy and cookies. 
C) could get more satisfaction from the same income by buying more candy and less cookies. 
D) could get more satisfaction from the same income by buying more cookies and less candy. 
A) is maximizing utility given a limited income because the prices of candy and cookies are the same. 
B) is maximizing satisfaction given a limited income because the marginal utility per dollar is the same for candy and cookies. 
C) could get more satisfaction from the same income by buying more candy and less cookies. 
D) could get more satisfaction from the same income by buying more cookies and less candy.

Question 9

The price of Y is $10.
-According to the above figure,which of the following are points on the consumer's demand curve for X?

Accepted Answer

A) $2,300 units 
B) $3,120 units 
C) $5,120 units 
D) both a and b 
E) both c and d 
A) $2,300 units 
B) $3,120 units 
C) $5,120 units 
D) both a and b 
E) both c and d

Question 10

The consumer's income is $800.
-According to the above figure,why doesn't the consumer choose the combination of 30X and 56Y at point A?

Accepted Answer

A) MRS is less than   . 
B) MRS is greater than   . 
C)    is greater than
  . 
D)    is less than
  . 
A) MRS is less than   . 
B) MRS is greater than   . 
C)    is greater than
  . 
D)    is less than
  .

Question 11

According to the following graphs,at point B,   The price of Y is $15 per unit.

Accepted Answer

A) the consumer can exchange one unit of X for one unit of Y and keep income unchanged. 
B) the marginal rate of substitution of X for Y is greater than it is at point A. 
C) the consumer's utility is greater than it is at point A. 
D) both a and b 
E) all of the above 
A) the consumer can exchange one unit of X for one unit of Y and keep income unchanged. 
B) the marginal rate of substitution of X for Y is greater than it is at point A. 
C) the consumer's utility is greater than it is at point A. 
D) both a and b 
E) all of the above

Question 12

The price of Y is $10.
-According to the above figure,if the price of X is $5,what combination of X and Y will a utility-maximizing consumer choose?

Accepted Answer

A) 80X,20Y 
B) 120X,620Y 
C) 120X,250Y 
D) 200X,620Y 
E) none of the above 
A) 80X,20Y 
B) 120X,620Y 
C) 120X,250Y 
D) 200X,620Y 
E) none of the above

Question 13

Which of the following assumptions isare)NOT made in consumer behavior theory?

Accepted Answer

A) Consumers can rank all bundles of goods. 
B) Consumers can measure the utility they get from all bundles of goods. 
C) Consumers have complete information. 
D) both a and b 
E) None of the above are assumptions made in consumer behavior theory. 
A) Consumers can rank all bundles of goods. 
B) Consumers can measure the utility they get from all bundles of goods. 
C) Consumers have complete information. 
D) both a and b 
E) None of the above are assumptions made in consumer behavior theory.

Question 14

Suppose that utility-maximizing consumers in San Francisco pay three times as much for apples as for peaches.What is the ratio of the marginal utility of apples to the marginal utility of peaches?

Accepted Answer

A) 1/3 
B) 2/3 
C) 3 
D) none of the above 
E) cannot determine without further information 
A) 1/3 
B) 2/3 
C) 3 
D) none of the above 
E) cannot determine without further information

Question 15

According to the following graph,if U2 is the maximum attainable utility,the price of X is   The price of Y is $50.

Accepted Answer

A) $10. 
B) $15. 
C) $20. 
D) $25. 
E) none of the above 
A) $10. 
B) $15. 
C) $20. 
D) $25. 
E) none of the above

Question 16

Suppose that 2 units of X and 8 units of Y give a consumer the same satisfaction as 4 units of X and 2 units of Y.Then

Accepted Answer

A) the consumer is willing to give up 3 units of Y to obtain 1 more unit of X. 
B) the consumer is willing to give up 1 unit of Y to obtain 3 more units of X. 
C) the marginal rate of substitution of Y for X is 3. 
D) both a and c 
E) both b and c 
A) the consumer is willing to give up 3 units of Y to obtain 1 more unit of X. 
B) the consumer is willing to give up 1 unit of Y to obtain 3 more units of X. 
C) the marginal rate of substitution of Y for X is 3. 
D) both a and c 
E) both b and c

Question 17

Based on the following graph,if the price of X is $7.50 per unit,how many units of X will a utility-maximizing consumer choose?   The consumer's income is $600.

Accepted Answer

A) 25 
B) 30 
C) 35 
D) 50 
E) none of the above 
A) 25 
B) 30 
C) 35 
D) 50 
E) none of the above

Question 18

Based on the following graph,at point C,   The consumer's income is $600.

Accepted Answer

A) MRS is greater than 1.25. 
B) MRS is less than 0.4. 
C) MRS is greater than 2. 
D) MRS is less than 2.5. 
A) MRS is greater than 1.25. 
B) MRS is less than 0.4. 
C) MRS is greater than 2. 
D) MRS is less than 2.5.

Question 19

Suppose a consumer who purchases only two goods is making a utility-maximizing choice and then the price of one of the goods decreases.What will happen?

Accepted Answer

A) The consumer's purchasing power will increase. 
B) The consumer's total utility will increase. 
C) The consumer's money income will increase. 
D) both a and b 
E) all of the above 
A) The consumer's purchasing power will increase. 
B) The consumer's total utility will increase. 
C) The consumer's money income will increase. 
D) both a and b 
E) all of the above

Question 20

If Mary prefers bananas to plums and plums to peaches,but is indifferent between bananas and oranges,she

Accepted Answer

A) prefers oranges to peaches. 
B) prefers plums to oranges. 
C) is indifferent between oranges and plums. 
D) is indifferent between oranges and peaches. 
A) prefers oranges to peaches. 
B) prefers plums to oranges. 
C) is indifferent between oranges and plums. 
D) is indifferent between oranges and peaches.

Which of the following is NOT a characteristic of a typical indifference curve?

The consumer's income is $800. -According to the above figure,why doesn't the consumer choose the combination at point B?

If Ferdinand prefers a Big Mac to a Whopper and a Whopper to a hotdog,but is indifferent between a Big Mac and a Quarter Pounder he must

According to the Rolling Stones,"You can't always get what you want." Which does this mean in the context of utility maximization?

The consumer's income is $800. -According to the above figure,what are the prices of goods X and Y?

According to the following figure,at point A,

Lulu consumes only candy and cookies; she is currently buying more cookies than candy with her limited income.The last bag of candy gave Lulu the same additional utility as the last bag of cookies,and the prices of candy and cookies are the same.Lulu

The price of Y is $10. -According to the above figure,which of the following are points on the consumer's demand curve for X?

The consumer's income is $800. -According to the above figure,why doesn't the consumer choose the combination of 30X and 56Y at point A?

According to the following graphs,at point B, The price of Y is $15 per unit.

The price of Y is $10. -According to the above figure,if the price of X is $5,what combination of X and Y will a utility-maximizing consumer choose?

Which of the following assumptions isare)NOT made in consumer behavior theory?

Suppose that utility-maximizing consumers in San Francisco pay three times as much for apples as for peaches.What is the ratio of the marginal utility of apples to the marginal utility of peaches?

According to the following graph,if U₂ is the maximum attainable utility,the price of X is The price of Y is $50.

Suppose that 2 units of X and 8 units of Y give a consumer the same satisfaction as 4 units of X and 2 units of Y.Then

Based on the following graph,if the price of X is $7.50 per unit,how many units of X will a utility-maximizing consumer choose? The consumer's income is $600.

Based on the following graph,at point C, The consumer's income is $600.

Suppose a consumer who purchases only two goods is making a utility-maximizing choice and then the price of one of the goods decreases.What will happen?

If Mary prefers bananas to plums and plums to peaches,but is indifferent between bananas and oranges,she

Managers, profits, and Markets

Demand, supply, and Market Equilibrium

Marginal Analysis for Optimal Decision Making

Basic Estimation Techniques

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

Exam 5: Theory of Consumer Behavior

Which of the following is NOT a characteristic of a typical indifference curve?

The consumer's income is $800. -According to the above figure,why doesn't the consumer choose the combination at point B?

If Ferdinand prefers a Big Mac to a Whopper and a Whopper to a hotdog,but is indifferent between a Big Mac and a Quarter Pounder he must

According to the Rolling Stones,"You can't always get what you want." Which does this mean in the context of utility maximization?

The consumer's income is $800. -According to the above figure,what are the prices of goods X and Y?

According to the following figure,at point A,

Lulu consumes only candy and cookies; she is currently buying more cookies than candy with her limited income.The last bag of candy gave Lulu the same additional utility as the last bag of cookies,and the prices of candy and cookies are the same.Lulu

The price of Y is $10. -According to the above figure,which of the following are points on the consumer's demand curve for X?

The consumer's income is $800. -According to the above figure,why doesn't the consumer choose the combination of 30X and 56Y at point A?

According to the following graphs,at point B, The price of Y is $15 per unit.

The price of Y is $10. -According to the above figure,if the price of X is $5,what combination of X and Y will a utility-maximizing consumer choose?

Which of the following assumptions isare)NOT made in consumer behavior theory?

Suppose that utility-maximizing consumers in San Francisco pay three times as much for apples as for peaches.What is the ratio of the marginal utility of apples to the marginal utility of peaches?

According to the following graph,if U2 is the maximum attainable utility,the price of X is The price of Y is $50.

Suppose that 2 units of X and 8 units of Y give a consumer the same satisfaction as 4 units of X and 2 units of Y.Then

Based on the following graph,if the price of X is $7.50 per unit,how many units of X will a utility-maximizing consumer choose? The consumer's income is $600.

Based on the following graph,at point C, The consumer's income is $600.

Suppose a consumer who purchases only two goods is making a utility-maximizing choice and then the price of one of the goods decreases.What will happen?

If Mary prefers bananas to plums and plums to peaches,but is indifferent between bananas and oranges,she

Managers, profits, and Markets

Demand, supply, and Market Equilibrium

Marginal Analysis for Optimal Decision Making

Basic Estimation Techniques

Elasticity and Demand

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

According to the following graph,if U₂ is the maximum attainable utility,the price of X is The price of Y is $50.