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Deck 6: Household Behavior and Consumer Choice
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Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. 
Figure 6.1
Refer to Figure 6.1. Tom's budget constraint is AC. His choice set includes all points
A) to the right of budget constraint AC.
B) bounded by the area OAC.
C) along budget constraint AC.
D) along the vertical and horizontal axes.
Figure 6.1Refer to Figure 6.1. Tom's budget constraint is AC. His choice set includes all points
A) to the right of budget constraint AC.
B) bounded by the area OAC.
C) along budget constraint AC.
D) along the vertical and horizontal axes.
Question
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $2.50. Tom's monthly income is
A) $16.
B) $50.
C) $80.
D) $100.
Figure 6.1Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $2.50. Tom's monthly income is
A) $16.
B) $50.
C) $80.
D) $100.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. He will have leftover income if he purchases the bundle represented by point
A) A.
B) B.
C) E.
D) D.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. He will have leftover income if he purchases the bundle represented by point
A) A.
B) B.
C) E.
D) D.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) 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
A) $20.
B) $60.
C) $80.
D) $100.
Figure 6.1Refer 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
A) $20.
B) $60.
C) $80.
D) $100.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $5.00. Tom's monthly income is
A) $40.
B) $100.
C) $200.
D) $400.
Figure 6.1Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $5.00. Tom's monthly income is
A) $40.
B) $100.
C) $200.
D) $400.
Question
Question
Question
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $8.00. Tom's monthly income is
A) $2.50.
B) $20.
C) $80.
D) $160.
Figure 6.1Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $8.00. Tom's monthly income is
A) $2.50.
B) $20.
C) $80.
D) $160.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hamburger
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.
Figure 6.1Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hamburger
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
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. The slope of budget constraint AC is
A) -5.0.
B) -2.0.
C) -0.5.
D) indeterminate from this information because prices are not given.
Figure 6.1Refer to Figure 6.1. The slope of budget constraint AC is
A) -5.0.
B) -2.0.
C) -0.5.
D) indeterminate from this information because prices are not given.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $2.00. Tom's monthly income is
A) $40.
B) $60.
C) $80.
D) $100.
Figure 6.1Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $2.00. Tom's monthly income is
A) $40.
B) $60.
C) $80.
D) $100.
Question
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hot dogs?
A) A.
B) B.
C) E.
D) D.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hot dogs?
A) A.
B) B.
C) E.
D) D.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. If the price of a hot dog is $3, the price of a hamburger is
A) $1.50.
B) $3.
C) $6.
D) $12.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. If the price of a hot dog is $3, the price of a hamburger is
A) $1.50.
B) $3.
C) $6.
D) $12.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. AC represents Tom's budget constraint. Point D then represents a point that is
A) an available option, as Tom is just spending all of his income.
B) available, but at which he does not spend all his income.
C) not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income.
D) in his opportunity set but not on his budget constraint.
Figure 6.1Refer to Figure 6.1. AC represents Tom's budget constraint. Point D then represents a point that is
A) an available option, as Tom is just spending all of his income.
B) available, but at which he does not spend all his income.
C) not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income.
D) in his opportunity set but not on his budget constraint.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. If the price of a hamburger is $10, the price of a hot dog is
A) $4.
B) $5.
C) $10.
D) $20.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. If the price of a hamburger is $10, the price of a hot dog is
A) $4.
B) $5.
C) $10.
D) $20.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $5.00. Tom's monthly income is
A) $4.
B) $60.
C) $80.
D) $100.
Figure 6.1Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $5.00. Tom's monthly income is
A) $4.
B) $60.
C) $80.
D) $100.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hot dog
A) is 1/4 of a hamburger.
B) is 1/2 of a hamburger.
C) is 2 hamburgers.
D) changes as you move down along the budget constraint.
Figure 6.1Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hot dog
A) is 1/4 of a hamburger.
B) is 1/2 of a hamburger.
C) is 2 hamburgers.
D) changes as you move down along the budget constraint.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. 
Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $2.50, Mr. Lingle's monthly income is
A) $40.
B) $100.
C) $125.
D) $200.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $2.50, Mr. Lingle's monthly income is
A) $40.
B) $100.
C) $125.
D) $200.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingleʹs budget constraint is AC. He will have leftover income if he purchases the bundle represented by point
A) A.
B) B.
C) E.
D) D.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingleʹs budget constraint is AC. He will have leftover income if he purchases the bundle represented by point
A) A.
B) B.
C) E.
D) D.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle's budget is AC. At which point does Mr. Lingle spend exactly his income?
A) A.
B) D.
C) E.
D) The answer cannot be determined with the given information.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle's budget is AC. At which point does Mr. Lingle spend exactly his income?
A) A.
B) D.
C) E.
D) The answer cannot be determined with the given information.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. Given his current monthly income he will not have enough income to purchase the bundle represented by point
A) A.
B) B.
C) E.
D) D.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. Given his current monthly income he will not have enough income to purchase the bundle represented by point
A) A.
B) B.
C) E.
D) D.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. His choice set is all points
A) in the area bounded by OAC.
B) to the right of budget constraint AC.
C) along budget constraint AC.
D) along the vertical and horizontal axes.
Figure 6.2Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. His choice set is all points
A) in the area bounded by OAC.
B) to the right of budget constraint AC.
C) along budget constraint AC.
D) along the vertical and horizontal axes.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one gardenburger is
A) 1/4 of a beer.
B) 1 beer.
C) 2 beers.
D) changing as Mr. Lingle moves down his budget constraint.
Figure 6.2Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one gardenburger is
A) 1/4 of a beer.
B) 1 beer.
C) 2 beers.
D) changing as Mr. Lingle moves down his budget constraint.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. AC represents Tom's budget constraint. Point E then represents a point that is
A) an available option, as Tom is just spending all of his income.
B) available, but at which he does not spend all his income.
C) not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income.
D) outside his opportunity set but not on his budget constraint.
Figure 6.1Refer to Figure 6.1. AC represents Tom's budget constraint. Point E then represents a point that is
A) an available option, as Tom is just spending all of his income.
B) available, but at which he does not spend all his income.
C) not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income.
D) outside his opportunity set but not on his budget constraint.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $4, Mr. Lingleʹs monthly income is
A) $10.
B) $40.
C) $160.
D) $200.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $4, Mr. Lingleʹs monthly income is
A) $10.
B) $40.
C) $160.
D) $200.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $5, Mr. Lingle's monthly income is
A) $40.
B) $80.
C) $100.
D) $200.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $5, Mr. Lingle's monthly income is
A) $40.
B) $80.
C) $100.
D) $200.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point C is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Figure 6.2Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point C is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle's budget constraint is AC. If the price of a beer is $3, the price of a gardenburger is
A) $1.50.
B) 3.00.
C) $6.00.
D) $12.00.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle's budget constraint is AC. If the price of a beer is $3, the price of a gardenburger is
A) $1.50.
B) 3.00.
C) $6.00.
D) $12.00.
Question
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hamburgers?
A) A
B) B
C) C
D) D
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hamburgers?
A) A
B) B
C) C
D) D
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one beer is
A) 1/4 of a gardenburger.
B) 1 gardenburger.
C) 2 gardenburgers.
D) changing as Mr. Lingle moves down his budget constraint.
Figure 6.2Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one beer is
A) 1/4 of a gardenburger.
B) 1 gardenburger.
C) 2 gardenburgers.
D) changing as Mr. Lingle moves down his budget constraint.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) 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 $9, Mr. Lingle's monthly income is
A) $40.
B) $80.
C) $180.
D) $360.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a gardenburger is $9, Mr. Lingle's monthly income is
A) $40.
B) $80.
C) $180.
D) $360.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point E is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Figure 6.2Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point E is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. The slope of budget constraint AC is
A) -1/2.
B) -1.
C) -2.
D) indeterminate from this information because prices are not given.
Figure 6.2Refer to Figure 6.2. The slope of budget constraint AC is
A) -1/2.
B) -1.
C) -2.
D) indeterminate from this information because prices are not given.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingleʹs budget is AC. Given his current monthly income he does not have enough income to purchase the quantities of the two goods at point
A) A.
B) B.
C) E.
D) D.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingleʹs budget is AC. Given his current monthly income he does not have enough income to purchase the quantities of the two goods at point
A) A.
B) B.
C) E.
D) D.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) 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 $5, Mr. Lingleʹs monthly income is
A) $8.
B) $150.
C) $200.
D) $240.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a gardenburger is $5, Mr. Lingleʹs monthly income is
A) $8.
B) $150.
C) $200.
D) $240.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) 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
A) $24.
B) $60.
C) $200.
D) $240.
Figure 6.2Refer 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
A) $24.
B) $60.
C) $200.
D) $240.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle's budget constraint is AC. If the price of a gardenburger is $7.50, the price of a beer is
A) $3.75.
B) $4.00.
C) $7.50.
D) $15.00.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle's budget constraint is AC. If the price of a gardenburger is $7.50, the price of a beer is
A) $3.75.
B) $4.00.
C) $7.50.
D) $15.00.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point A is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Figure 6.2Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point A is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Question
Refer to the information provided in Figure 6.4 below to answer the question(s) 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
A) swivel toward AO.
B) swivel toward AB.
C) remain at AC.
D) swivel toward AD.
Figure 6.4Refer to Figure 6.4. Bill's budget constraint is AC. If the black bean price decreases, Bill's budget constraint will
A) swivel toward AO.
B) swivel toward AB.
C) remain at AC.
D) swivel toward AD.
Question
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. 
Figure 6.3
Refer to Figure 6.3. Molly's budget constraint is AC. It would swivel to AB if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Figure 6.3Refer to Figure 6.3. Molly's budget constraint is AC. It would swivel to AB if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Question
Question
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Mollyʹs budget constraint is AD. It would swivel to AB if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Figure 6.3Refer to Figure 6.3. Mollyʹs budget constraint is AD. It would swivel to AB if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Question
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Molly's budget constraint is AB. It would swivel to AD if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Figure 6.3Refer to Figure 6.3. Molly's budget constraint is AB. It would swivel to AD if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Question
Refer to the information provided in Figure 6.4 below to answer the question(s) that follow. Figure 6.4
Refer to Figure 6.4. Billʹs budget constraint is AC. His budget constraint would shift to AD if the price of
A) black beans increased.
B) black beans decreased.
C) bell peppers increased.
D) bell peppers decreased.
Figure 6.4Refer to Figure 6.4. Billʹs budget constraint is AC. His budget constraint would shift to AD if the price of
A) black beans increased.
B) black beans decreased.
C) bell peppers increased.
D) bell peppers decreased.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point D is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) in Mr. Lingle's opportunity set but is not on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Figure 6.2Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point D is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) in Mr. Lingle's opportunity set but is not on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Question
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Molly's budget constraint is AC. It would swivel to AD if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Figure 6.3Refer to Figure 6.3. Molly's budget constraint is AC. It would swivel to AD if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. 
Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is CD. If her income increases, her new budget constraint is
A) AD.
B) BD.
C) EF.
D) It is not shown on this graph.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is CD. If her income increases, her new budget constraint is
A) AD.
B) BD.
C) EF.
D) It is not shown on this graph.
Question
Refer to the information provided in Figure 6.4 below to answer the question(s) that follow. Figure 6.4
Refer to Figure 6.4. Billʹs budget constraint is AC. If the bell peppers price decreases, Billʹs budget constraint will
A) swivel toward AB.
B) remain at AC.
C) swivel toward AD.
D) The budget constraint is not depicted on the diagram.
Figure 6.4Refer to Figure 6.4. Billʹs budget constraint is AC. If the bell peppers price decreases, Billʹs budget constraint will
A) swivel toward AB.
B) remain at AC.
C) swivel toward AD.
D) The budget constraint is not depicted on the diagram.
Question
Refer to the information provided in Figure 6.4 below to answer the question(s) that follow. Figure 6.4
Refer to Figure 6.4. Billʹs budget constraint is AC. If the black bean price increases, Billʹs budget constraint will
A) swivel toward 0D.
B) swivel toward AB.
C) remain at AC.
D) swivel toward AD.
Figure 6.4Refer to Figure 6.4. Billʹs budget constraint is AC. If the black bean price increases, Billʹs budget constraint will
A) swivel toward 0D.
B) swivel toward AB.
C) remain at AC.
D) swivel toward AD.
Question
Refer to the information provided in Figure 6.4 below to answer the question(s) 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
A) black beans increased.
B) black beans decreased.
C) bell peppers increased.
D) bell peppers decreased.
Figure 6.4Refer to Figure 6.4. Bill's budget constraint is AC. His budget constraint would shift to AB if the price of
A) black beans increased.
B) black beans decreased.
C) bell peppers increased.
D) bell peppers decreased.
Question
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Mollyʹs budget constraint is AB. Molly can purchase
A) none of the points along AD.
B) none of the points along AC.
C) all of the points along AC.
D) none of the above.
Figure 6.3Refer to Figure 6.3. Mollyʹs budget constraint is AB. Molly can purchase
A) none of the points along AD.
B) none of the points along AC.
C) all of the points along AC.
D) none of the above.
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is BD. If the price of CDs increases, her new budget constraint becomes
A) AD.
B) BD.
C) CD.
D) EF.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is BD. If the price of CDs increases, her new budget constraint becomes
A) AD.
B) BD.
C) CD.
D) EF.
Question
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Molly's budget constraint is AC. Molly can purchase
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.
Figure 6.3Refer to Figure 6.3. Molly's budget constraint is AC. Molly can purchase
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
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is BD. If the price of CDs decreases, her new budget constraint becomes
A) AD.
B) AO.
C) CD.
D) EF.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is BD. If the price of CDs decreases, her new budget constraint becomes
A) AD.
B) AO.
C) CD.
D) EF.
Question
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingleʹs budget is AC. At which point does Mr. Lingle spend exactly his income?
A) A.
B) B.
C) C.
D) All of the above are correct.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingleʹs budget is AC. At which point does Mr. Lingle spend exactly his income?
A) A.
B) B.
C) C.
D) All of the above are correct.
Question
Refer to the information provided in Figure 6.4 below to answer the question(s) that follow. Figure 6.4
Refer to Figure 6.4. Bill's budget constraint is AC. If the bell peppers price increases, Bill's budget constraint will
A) swivel toward AB.
B) remain at AC.
C) swivel toward AD.
D) The budget constraint is not depicted on the diagram.
Figure 6.4Refer to Figure 6.4. Bill's budget constraint is AC. If the bell peppers price increases, Bill's budget constraint will
A) swivel toward AB.
B) remain at AC.
C) swivel toward AD.
D) The budget constraint is not depicted on the diagram.
Question
Question
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. 
Figure 6.6
Refer to Figure 6.6. Bill's budget constraint is BD. Bill's income is $600, the price of a bell pepper is $1, and the price of a bag of black beans is $2. At point D Bill is buying ________ bell peppers and ________ bags of black beans.
A) 0; 300
B) 600; 0
C) 300; 150
D) 600; 300
Figure 6.6Refer to Figure 6.6. Bill's budget constraint is BD. Bill's income is $600, the price of a bell pepper is $1, and the price of a bag of black beans is $2. At point D Bill is buying ________ bell peppers and ________ bags of black beans.
A) 0; 300
B) 600; 0
C) 300; 150
D) 600; 300
Question
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is CD, then his income
A) increased.
B) decreased.
C) did not change but the price of black beans decreased.
D) did not change but the price of black beans increased.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is CD, then his income
A) increased.
B) decreased.
C) did not change but the price of black beans decreased.
D) did not change but the price of black beans increased.
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is BD. Molly's income is $375, the price of a DVD is $15 and the price of a CD is $25. At point D she is buying ________ DVDs and ________ CDs.
A) 0; 15
B) 25; 0
C) 25; 15
D) 50; 30
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is BD. Molly's income is $375, the price of a DVD is $15 and the price of a CD is $25. At point D she is buying ________ DVDs and ________ CDs.
A) 0; 15
B) 25; 0
C) 25; 15
D) 50; 30
Question
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint is BD. Bill's income is $800, the price of a bell pepper is $1, and the price of a bag of black beans is $1. At point B Bill is buying ________ bell peppers and ________ bags of black beans.
A) 0; 800
B) 800; 0
C) 400; 400
D) 600; 200
Figure 6.6Refer to Figure 6.6. Bill's budget constraint is BD. Bill's income is $800, the price of a bell pepper is $1, and the price of a bag of black beans is $1. At point B Bill is buying ________ bell peppers and ________ bags of black beans.
A) 0; 800
B) 800; 0
C) 400; 400
D) 600; 200
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is CD. If the price of CDs increases, her new budget constraint becomes
A) AD.
B) AO.
C) BE.
D) EF.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is CD. If the price of CDs increases, her new budget constraint becomes
A) AD.
B) AO.
C) BE.
D) EF.
Question
Question
Question
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint was originally CD. If his new budget constraint is EF, then his income
A) increased.
B) decreased.
C) did not change but the price of black beans decreased.
D) did not change but the price of bell peppers decreased.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint was originally CD. If his new budget constraint is EF, then his income
A) increased.
B) decreased.
C) did not change but the price of black beans decreased.
D) did not change but the price of bell peppers decreased.
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is BD. Molly's income is $400, the price of a DVD is $15 and the price of a CD is $20. At point B she is buying ________ DVDs and ________ CDs.
A) 0; 20
B) 20; 0
C) 20; 15
D) 40; 30
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is BD. Molly's income is $400, the price of a DVD is $15 and the price of a CD is $20. At point B she is buying ________ DVDs and ________ CDs.
A) 0; 20
B) 20; 0
C) 20; 15
D) 40; 30
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $200, the price of a DVD is $7.50 and the price of a CD is $10. At point C, she is buying ________ DVDs and ________ CDs.
A) 0; 20
B) 20; 0
C) 20; 15
D) 40; 30
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $200, the price of a DVD is $7.50 and the price of a CD is $10. At point C, she is buying ________ DVDs and ________ CDs.
A) 0; 20
B) 20; 0
C) 20; 15
D) 40; 30
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $75, the price of a DVD is $3 and the price of a CD is $5. At point D, she is buying ________ DVDs and ________ CDs.
A) 0; 15
B) 25; 0
C) 25; 15
D) 50; 30
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $75, the price of a DVD is $3 and the price of a CD is $5. At point D, she is buying ________ DVDs and ________ CDs.
A) 0; 15
B) 25; 0
C) 25; 15
D) 50; 30
Question
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint is CD. If the price of bell peppers increases, Bill's new budget constraint is
A) AD.
B) AO.
C) BE.
D) EF.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint is CD. If the price of bell peppers increases, Bill's new budget constraint is
A) AD.
B) AO.
C) BE.
D) EF.
Question
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint was originally AD. If his new budget constraint is EF, then his income
A) increased.
B) decreased.
C) increased and the price of black beans price increased.
D) increased and the price of bell peppers decreased.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint was originally AD. If his new budget constraint is EF, then his income
A) increased.
B) decreased.
C) increased and the price of black beans price increased.
D) increased and the price of bell peppers decreased.
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is AD. If the price of CDs decreases, her new budget constraint becomes
A) AE.
B) AO.
C) BD.
D) EF.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is AD. If the price of CDs decreases, her new budget constraint becomes
A) AE.
B) AO.
C) BD.
D) EF.
Question
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is AD, then his income
A) increased.
B) decreased.
C) increased and the price of bell peppers decreased.
D) decreased and the price of bell peppers increased.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is AD, then his income
A) increased.
B) decreased.
C) increased and the price of bell peppers decreased.
D) decreased and the price of bell peppers increased.
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint could be
A) AD.
B) BD.
C) CD.
D) Her new possible budget constraint is not shown on this graph.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint could be
A) AD.
B) BD.
C) CD.
D) Her new possible budget constraint is not shown on this graph.
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is AD. If her income decreases, her new budget constraint is
A) CD.
B) BD.
C) EF.
D) not shown on this graph.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is AD. If her income decreases, her new budget constraint is
A) CD.
B) BD.
C) EF.
D) not shown on this graph.
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) 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
A) CD.
B) BD.
C) AD.
D) Both B and C are correct.
Figure 6.5Refer 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
A) CD.
B) BD.
C) AD.
D) Both B and C are correct.
Question
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint is BD. If the price of bell peppers increases, Bill's new budget constraint is
A) AD.
B) AO.
C) CD.
D) EF.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint is BD. If the price of bell peppers increases, Bill's new budget constraint is
A) AD.
B) AO.
C) CD.
D) EF.
Question
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint is
A) AD.
B) BD.
C) CD.
D) It is not shown on this graph.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint is
A) AD.
B) BD.
C) CD.
D) It is not shown on this graph.
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Deck 6: Household Behavior and Consumer Choice
1
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Tom's budget constraint is AC. His choice set includes all points
A) to the right of budget constraint AC.
B) bounded by the area OAC.
C) along budget constraint AC.
D) along the vertical and horizontal axes.
Figure 6.1Refer to Figure 6.1. Tom's budget constraint is AC. His choice set includes all points
A) to the right of budget constraint AC.
B) bounded by the area OAC.
C) along budget constraint AC.
D) along the vertical and horizontal axes.
bounded by the area OAC.
2
Jane has $500 a week to spend on clothing and food. The price of clothing is $25 and the price of food is $10. What is the equation for Jane's budget constraint?
A) ($25 × Clothing) × ($10 × Food) < $500
B) $25 × Clothing + $10 × Food ≥ $500
C) ($25 × Clothing) / ($10 × Food) = $500
D) $25 × Clothing + $10 × Food = $500
A) ($25 × Clothing) × ($10 × Food) < $500
B) $25 × Clothing + $10 × Food ≥ $500
C) ($25 × Clothing) / ($10 × Food) = $500
D) $25 × Clothing + $10 × Food = $500
$25 × Clothing + $10 × Food = $500
3
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $2.50. Tom's monthly income is
A) $16.
B) $50.
C) $80.
D) $100.
Figure 6.1Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $2.50. Tom's monthly income is
A) $16.
B) $50.
C) $80.
D) $100.
$100.
4
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. He will have leftover income if he purchases the bundle represented by point
A) A.
B) B.
C) E.
D) D.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. He will have leftover income if he purchases the bundle represented by point
A) A.
B) B.
C) E.
D) D.
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5
Refer to the information provided in Figure 6.1 below to answer the question(s) 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
A) $20.
B) $60.
C) $80.
D) $100.
Figure 6.1Refer 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
A) $20.
B) $60.
C) $80.
D) $100.
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6
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $5.00. Tom's monthly income is
A) $40.
B) $100.
C) $200.
D) $400.
Figure 6.1Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $5.00. Tom's monthly income is
A) $40.
B) $100.
C) $200.
D) $400.
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7
Ted has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. What is the equation for Ted's budget constraint, assuming he spends his entire budget?
A) $30 × Clothing + $5 × Food < $600
B) $30 × Clothing + $5 × Food ≤ $600
C) $30 × Clothing + $5 × Food > $600
D) $30 × Clothing + $5 × Food = $600
A) $30 × Clothing + $5 × Food < $600
B) $30 × Clothing + $5 × Food ≤ $600
C) $30 × Clothing + $5 × Food > $600
D) $30 × Clothing + $5 × Food = $600
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8
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.
A) 20; 50
B) 15; 70
C) 10; 60
D) 0; 200
A) 20; 50
B) 15; 70
C) 10; 60
D) 0; 200
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9
Jane has $500 a week to spend on clothing and food. The price of clothing is $25 and the price of food is $10. The clothing and food pairs in Jane's choice set include ________ units of clothing and ________ units of food.
A) 50; 50
B) 20; 50
C) 15; 25
D) 8; 30
A) 50; 50
B) 20; 50
C) 15; 25
D) 8; 30
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10
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $8.00. Tom's monthly income is
A) $2.50.
B) $20.
C) $80.
D) $160.
Figure 6.1Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $8.00. Tom's monthly income is
A) $2.50.
B) $20.
C) $80.
D) $160.
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11
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hamburger
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.
Figure 6.1Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hamburger
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.
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12
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. The slope of budget constraint AC is
A) -5.0.
B) -2.0.
C) -0.5.
D) indeterminate from this information because prices are not given.
Figure 6.1Refer to Figure 6.1. The slope of budget constraint AC is
A) -5.0.
B) -2.0.
C) -0.5.
D) indeterminate from this information because prices are not given.
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13
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $2.00. Tom's monthly income is
A) $40.
B) $60.
C) $80.
D) $100.
Figure 6.1Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hot dog is $2.00. Tom's monthly income is
A) $40.
B) $60.
C) $80.
D) $100.
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14
Jane has $500 a week to spend on clothing and food. The price of clothing is $25 and the price of food is $10. Jane spends her entire income when she purchases ________ units of clothing and ________ units of food.
A) 10; 10
B) 25; 5
C) 12; 20
D) 16; 8
A) 10; 10
B) 25; 5
C) 12; 20
D) 16; 8
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15
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hot dogs?
A) A.
B) B.
C) E.
D) D.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hot dogs?
A) A.
B) B.
C) E.
D) D.
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16
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. If the price of a hot dog is $3, the price of a hamburger is
A) $1.50.
B) $3.
C) $6.
D) $12.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. If the price of a hot dog is $3, the price of a hamburger is
A) $1.50.
B) $3.
C) $6.
D) $12.
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17
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. AC represents Tom's budget constraint. Point D then represents a point that is
A) an available option, as Tom is just spending all of his income.
B) available, but at which he does not spend all his income.
C) not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income.
D) in his opportunity set but not on his budget constraint.
Figure 6.1Refer to Figure 6.1. AC represents Tom's budget constraint. Point D then represents a point that is
A) an available option, as Tom is just spending all of his income.
B) available, but at which he does not spend all his income.
C) not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income.
D) in his opportunity set but not on his budget constraint.
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18
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. If the price of a hamburger is $10, the price of a hot dog is
A) $4.
B) $5.
C) $10.
D) $20.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. If the price of a hamburger is $10, the price of a hot dog is
A) $4.
B) $5.
C) $10.
D) $20.
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19
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $5.00. Tom's monthly income is
A) $4.
B) $60.
C) $80.
D) $100.
Figure 6.1Refer to Figure 6.1. Assume Tom is on budget constraint AC and the price of a hamburger is $5.00. Tom's monthly income is
A) $4.
B) $60.
C) $80.
D) $100.
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20
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hot dog
A) is 1/4 of a hamburger.
B) is 1/2 of a hamburger.
C) is 2 hamburgers.
D) changes as you move down along the budget constraint.
Figure 6.1Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hot dog
A) is 1/4 of a hamburger.
B) is 1/2 of a hamburger.
C) is 2 hamburgers.
D) changes as you move down along the budget constraint.
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21
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $2.50, Mr. Lingle's monthly income is
A) $40.
B) $100.
C) $125.
D) $200.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $2.50, Mr. Lingle's monthly income is
A) $40.
B) $100.
C) $125.
D) $200.
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22
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingleʹs budget constraint is AC. He will have leftover income if he purchases the bundle represented by point
A) A.
B) B.
C) E.
D) D.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingleʹs budget constraint is AC. He will have leftover income if he purchases the bundle represented by point
A) A.
B) B.
C) E.
D) D.
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23
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle's budget is AC. At which point does Mr. Lingle spend exactly his income?
A) A.
B) D.
C) E.
D) The answer cannot be determined with the given information.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle's budget is AC. At which point does Mr. Lingle spend exactly his income?
A) A.
B) D.
C) E.
D) The answer cannot be determined with the given information.
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24
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. Given his current monthly income he will not have enough income to purchase the bundle represented by point
A) A.
B) B.
C) E.
D) D.
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. Given his current monthly income he will not have enough income to purchase the bundle represented by point
A) A.
B) B.
C) E.
D) D.
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25
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. His choice set is all points
A) in the area bounded by OAC.
B) to the right of budget constraint AC.
C) along budget constraint AC.
D) along the vertical and horizontal axes.
Figure 6.2Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. His choice set is all points
A) in the area bounded by OAC.
B) to the right of budget constraint AC.
C) along budget constraint AC.
D) along the vertical and horizontal axes.
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26
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one gardenburger is
A) 1/4 of a beer.
B) 1 beer.
C) 2 beers.
D) changing as Mr. Lingle moves down his budget constraint.
Figure 6.2Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one gardenburger is
A) 1/4 of a beer.
B) 1 beer.
C) 2 beers.
D) changing as Mr. Lingle moves down his budget constraint.
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27
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. AC represents Tom's budget constraint. Point E then represents a point that is
A) an available option, as Tom is just spending all of his income.
B) available, but at which he does not spend all his income.
C) not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income.
D) outside his opportunity set but not on his budget constraint.
Figure 6.1Refer to Figure 6.1. AC represents Tom's budget constraint. Point E then represents a point that is
A) an available option, as Tom is just spending all of his income.
B) available, but at which he does not spend all his income.
C) not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income.
D) outside his opportunity set but not on his budget constraint.
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28
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $4, Mr. Lingleʹs monthly income is
A) $10.
B) $40.
C) $160.
D) $200.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $4, Mr. Lingleʹs monthly income is
A) $10.
B) $40.
C) $160.
D) $200.
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29
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $5, Mr. Lingle's monthly income is
A) $40.
B) $80.
C) $100.
D) $200.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $5, Mr. Lingle's monthly income is
A) $40.
B) $80.
C) $100.
D) $200.
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30
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point C is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Figure 6.2Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point C is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
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31
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle's budget constraint is AC. If the price of a beer is $3, the price of a gardenburger is
A) $1.50.
B) 3.00.
C) $6.00.
D) $12.00.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle's budget constraint is AC. If the price of a beer is $3, the price of a gardenburger is
A) $1.50.
B) 3.00.
C) $6.00.
D) $12.00.
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32
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hamburgers?
A) A
B) B
C) C
D) D
Figure 6.1Refer to Figure 6.1. Assume Tom's budget constraint is AC. At which point does Tom consume only hamburgers?
A) A
B) B
C) C
D) D
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33
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one beer is
A) 1/4 of a gardenburger.
B) 1 gardenburger.
C) 2 gardenburgers.
D) changing as Mr. Lingle moves down his budget constraint.
Figure 6.2Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one beer is
A) 1/4 of a gardenburger.
B) 1 gardenburger.
C) 2 gardenburgers.
D) changing as Mr. Lingle moves down his budget constraint.
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34
Refer to the information provided in Figure 6.2 below to answer the question(s) 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 $9, Mr. Lingle's monthly income is
A) $40.
B) $80.
C) $180.
D) $360.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a gardenburger is $9, Mr. Lingle's monthly income is
A) $40.
B) $80.
C) $180.
D) $360.
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35
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point E is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Figure 6.2Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point E is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
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36
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. The slope of budget constraint AC is
A) -1/2.
B) -1.
C) -2.
D) indeterminate from this information because prices are not given.
Figure 6.2Refer to Figure 6.2. The slope of budget constraint AC is
A) -1/2.
B) -1.
C) -2.
D) indeterminate from this information because prices are not given.
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37
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingleʹs budget is AC. Given his current monthly income he does not have enough income to purchase the quantities of the two goods at point
A) A.
B) B.
C) E.
D) D.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingleʹs budget is AC. Given his current monthly income he does not have enough income to purchase the quantities of the two goods at point
A) A.
B) B.
C) E.
D) D.
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38
Refer to the information provided in Figure 6.2 below to answer the question(s) 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 $5, Mr. Lingleʹs monthly income is
A) $8.
B) $150.
C) $200.
D) $240.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a gardenburger is $5, Mr. Lingleʹs monthly income is
A) $8.
B) $150.
C) $200.
D) $240.
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39
Refer to the information provided in Figure 6.2 below to answer the question(s) 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
A) $24.
B) $60.
C) $200.
D) $240.
Figure 6.2Refer 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
A) $24.
B) $60.
C) $200.
D) $240.
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40
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingle's budget constraint is AC. If the price of a gardenburger is $7.50, the price of a beer is
A) $3.75.
B) $4.00.
C) $7.50.
D) $15.00.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle's budget constraint is AC. If the price of a gardenburger is $7.50, the price of a beer is
A) $3.75.
B) $4.00.
C) $7.50.
D) $15.00.
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41
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point A is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Figure 6.2Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point A is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle's opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
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42
Refer to the information provided in Figure 6.4 below to answer the question(s) 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
A) swivel toward AO.
B) swivel toward AB.
C) remain at AC.
D) swivel toward AD.
Figure 6.4Refer to Figure 6.4. Bill's budget constraint is AC. If the black bean price decreases, Bill's budget constraint will
A) swivel toward AO.
B) swivel toward AB.
C) remain at AC.
D) swivel toward AD.
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43
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Molly's budget constraint is AC. It would swivel to AB if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Figure 6.3Refer to Figure 6.3. Molly's budget constraint is AC. It would swivel to AB if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
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44
If a household's income doubles, its budget constraint will
A) shift out parallel to the old one.
B) pivot at the Y-intercept.
C) shift in parallel to the old one.
D) be unaffected.
A) shift out parallel to the old one.
B) pivot at the Y-intercept.
C) shift in parallel to the old one.
D) be unaffected.
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45
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Mollyʹs budget constraint is AD. It would swivel to AB if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Figure 6.3Refer to Figure 6.3. Mollyʹs budget constraint is AD. It would swivel to AB if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
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46
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Molly's budget constraint is AB. It would swivel to AD if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Figure 6.3Refer to Figure 6.3. Molly's budget constraint is AB. It would swivel to AD if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
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47
Refer to the information provided in Figure 6.4 below to answer the question(s) that follow. Figure 6.4
Refer to Figure 6.4. Billʹs budget constraint is AC. His budget constraint would shift to AD if the price of
A) black beans increased.
B) black beans decreased.
C) bell peppers increased.
D) bell peppers decreased.
Figure 6.4Refer to Figure 6.4. Billʹs budget constraint is AC. His budget constraint would shift to AD if the price of
A) black beans increased.
B) black beans decreased.
C) bell peppers increased.
D) bell peppers decreased.
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48
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point D is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) in Mr. Lingle's opportunity set but is not on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Figure 6.2Refer to Figure 6.2. Mr. Lingleʹs budget constraint is AC. Point D is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) in Mr. Lingle's opportunity set but is not on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
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49
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Molly's budget constraint is AC. It would swivel to AD if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Figure 6.3Refer to Figure 6.3. Molly's budget constraint is AC. It would swivel to AD if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
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50
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is CD. If her income increases, her new budget constraint is
A) AD.
B) BD.
C) EF.
D) It is not shown on this graph.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is CD. If her income increases, her new budget constraint is
A) AD.
B) BD.
C) EF.
D) It is not shown on this graph.
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51
Refer to the information provided in Figure 6.4 below to answer the question(s) that follow. Figure 6.4
Refer to Figure 6.4. Billʹs budget constraint is AC. If the bell peppers price decreases, Billʹs budget constraint will
A) swivel toward AB.
B) remain at AC.
C) swivel toward AD.
D) The budget constraint is not depicted on the diagram.
Figure 6.4Refer to Figure 6.4. Billʹs budget constraint is AC. If the bell peppers price decreases, Billʹs budget constraint will
A) swivel toward AB.
B) remain at AC.
C) swivel toward AD.
D) The budget constraint is not depicted on the diagram.
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52
Refer to the information provided in Figure 6.4 below to answer the question(s) that follow. Figure 6.4
Refer to Figure 6.4. Billʹs budget constraint is AC. If the black bean price increases, Billʹs budget constraint will
A) swivel toward 0D.
B) swivel toward AB.
C) remain at AC.
D) swivel toward AD.
Figure 6.4Refer to Figure 6.4. Billʹs budget constraint is AC. If the black bean price increases, Billʹs budget constraint will
A) swivel toward 0D.
B) swivel toward AB.
C) remain at AC.
D) swivel toward AD.
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53
Refer to the information provided in Figure 6.4 below to answer the question(s) 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
A) black beans increased.
B) black beans decreased.
C) bell peppers increased.
D) bell peppers decreased.
Figure 6.4Refer to Figure 6.4. Bill's budget constraint is AC. His budget constraint would shift to AB if the price of
A) black beans increased.
B) black beans decreased.
C) bell peppers increased.
D) bell peppers decreased.
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54
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Mollyʹs budget constraint is AB. Molly can purchase
A) none of the points along AD.
B) none of the points along AC.
C) all of the points along AC.
D) none of the above.
Figure 6.3Refer to Figure 6.3. Mollyʹs budget constraint is AB. Molly can purchase
A) none of the points along AD.
B) none of the points along AC.
C) all of the points along AC.
D) none of the above.
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55
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is BD. If the price of CDs increases, her new budget constraint becomes
A) AD.
B) BD.
C) CD.
D) EF.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is BD. If the price of CDs increases, her new budget constraint becomes
A) AD.
B) BD.
C) CD.
D) EF.
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56
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow. Figure 6.3
Refer to Figure 6.3. Molly's budget constraint is AC. Molly can purchase
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.
Figure 6.3Refer to Figure 6.3. Molly's budget constraint is AC. Molly can purchase
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.
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57
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is BD. If the price of CDs decreases, her new budget constraint becomes
A) AD.
B) AO.
C) CD.
D) EF.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is BD. If the price of CDs decreases, her new budget constraint becomes
A) AD.
B) AO.
C) CD.
D) EF.
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58
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2
Refer to Figure 6.2. Assume Mr. Lingleʹs budget is AC. At which point does Mr. Lingle spend exactly his income?
A) A.
B) B.
C) C.
D) All of the above are correct.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingleʹs budget is AC. At which point does Mr. Lingle spend exactly his income?
A) A.
B) B.
C) C.
D) All of the above are correct.
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59
Refer to the information provided in Figure 6.4 below to answer the question(s) that follow. Figure 6.4
Refer to Figure 6.4. Bill's budget constraint is AC. If the bell peppers price increases, Bill's budget constraint will
A) swivel toward AB.
B) remain at AC.
C) swivel toward AD.
D) The budget constraint is not depicted on the diagram.
Figure 6.4Refer to Figure 6.4. Bill's budget constraint is AC. If the bell peppers price increases, Bill's budget constraint will
A) swivel toward AB.
B) remain at AC.
C) swivel toward AD.
D) The budget constraint is not depicted on the diagram.
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60
If a household's income falls by 10%, its budget constraint will
A) shift out parallel to the old one.
B) pivot at the Y-intercept.
C) shift in parallel to the old one.
D) be unaffected.
A) shift out parallel to the old one.
B) pivot at the Y-intercept.
C) shift in parallel to the old one.
D) be unaffected.
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61
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint is BD. Bill's income is $600, the price of a bell pepper is $1, and the price of a bag of black beans is $2. At point D Bill is buying ________ bell peppers and ________ bags of black beans.
A) 0; 300
B) 600; 0
C) 300; 150
D) 600; 300
Figure 6.6Refer to Figure 6.6. Bill's budget constraint is BD. Bill's income is $600, the price of a bell pepper is $1, and the price of a bag of black beans is $2. At point D Bill is buying ________ bell peppers and ________ bags of black beans.
A) 0; 300
B) 600; 0
C) 300; 150
D) 600; 300
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62
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is CD, then his income
A) increased.
B) decreased.
C) did not change but the price of black beans decreased.
D) did not change but the price of black beans increased.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is CD, then his income
A) increased.
B) decreased.
C) did not change but the price of black beans decreased.
D) did not change but the price of black beans increased.
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63
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is BD. Molly's income is $375, the price of a DVD is $15 and the price of a CD is $25. At point D she is buying ________ DVDs and ________ CDs.
A) 0; 15
B) 25; 0
C) 25; 15
D) 50; 30
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is BD. Molly's income is $375, the price of a DVD is $15 and the price of a CD is $25. At point D she is buying ________ DVDs and ________ CDs.
A) 0; 15
B) 25; 0
C) 25; 15
D) 50; 30
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64
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint is BD. Bill's income is $800, the price of a bell pepper is $1, and the price of a bag of black beans is $1. At point B Bill is buying ________ bell peppers and ________ bags of black beans.
A) 0; 800
B) 800; 0
C) 400; 400
D) 600; 200
Figure 6.6Refer to Figure 6.6. Bill's budget constraint is BD. Bill's income is $800, the price of a bell pepper is $1, and the price of a bag of black beans is $1. At point B Bill is buying ________ bell peppers and ________ bags of black beans.
A) 0; 800
B) 800; 0
C) 400; 400
D) 600; 200
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65
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is CD. If the price of CDs increases, her new budget constraint becomes
A) AD.
B) AO.
C) BE.
D) EF.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is CD. If the price of CDs increases, her new budget constraint becomes
A) AD.
B) AO.
C) BE.
D) EF.
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66
Michael can buy either pizzas or submarine sandwiches. If the prices of pizzas and submarine sandwiches fall by half and so does Michael's money income, we can conclude that Michael's budget constraint will
A) shift in but remain parallel to the old one.
B) shift out but remain parallel to the old one.
C) swivel in so that the slope of the budget constraint is doubled.
D) remain unchanged.
A) shift in but remain parallel to the old one.
B) shift out but remain parallel to the old one.
C) swivel in so that the slope of the budget constraint is doubled.
D) remain unchanged.
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67
Michael can buy either pizzas or submarine sandwiches. If the prices of pizzas and submarine sandwiches double and Michael's money income triples, we can conclude that Michael's budget constraint will
A) shift in but remain parallel to the old one.
B) shift out but remain parallel to the old one.
C) swivel in so that the slope of the budget constraint is doubled.
D) remain unchanged.
A) shift in but remain parallel to the old one.
B) shift out but remain parallel to the old one.
C) swivel in so that the slope of the budget constraint is doubled.
D) remain unchanged.
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68
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint was originally CD. If his new budget constraint is EF, then his income
A) increased.
B) decreased.
C) did not change but the price of black beans decreased.
D) did not change but the price of bell peppers decreased.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint was originally CD. If his new budget constraint is EF, then his income
A) increased.
B) decreased.
C) did not change but the price of black beans decreased.
D) did not change but the price of bell peppers decreased.
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69
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is BD. Molly's income is $400, the price of a DVD is $15 and the price of a CD is $20. At point B she is buying ________ DVDs and ________ CDs.
A) 0; 20
B) 20; 0
C) 20; 15
D) 40; 30
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is BD. Molly's income is $400, the price of a DVD is $15 and the price of a CD is $20. At point B she is buying ________ DVDs and ________ CDs.
A) 0; 20
B) 20; 0
C) 20; 15
D) 40; 30
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70
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $200, the price of a DVD is $7.50 and the price of a CD is $10. At point C, she is buying ________ DVDs and ________ CDs.
A) 0; 20
B) 20; 0
C) 20; 15
D) 40; 30
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $200, the price of a DVD is $7.50 and the price of a CD is $10. At point C, she is buying ________ DVDs and ________ CDs.
A) 0; 20
B) 20; 0
C) 20; 15
D) 40; 30
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71
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $75, the price of a DVD is $3 and the price of a CD is $5. At point D, she is buying ________ DVDs and ________ CDs.
A) 0; 15
B) 25; 0
C) 25; 15
D) 50; 30
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $75, the price of a DVD is $3 and the price of a CD is $5. At point D, she is buying ________ DVDs and ________ CDs.
A) 0; 15
B) 25; 0
C) 25; 15
D) 50; 30
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72
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint is CD. If the price of bell peppers increases, Bill's new budget constraint is
A) AD.
B) AO.
C) BE.
D) EF.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint is CD. If the price of bell peppers increases, Bill's new budget constraint is
A) AD.
B) AO.
C) BE.
D) EF.
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73
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint was originally AD. If his new budget constraint is EF, then his income
A) increased.
B) decreased.
C) increased and the price of black beans price increased.
D) increased and the price of bell peppers decreased.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint was originally AD. If his new budget constraint is EF, then his income
A) increased.
B) decreased.
C) increased and the price of black beans price increased.
D) increased and the price of bell peppers decreased.
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74
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is AD. If the price of CDs decreases, her new budget constraint becomes
A) AE.
B) AO.
C) BD.
D) EF.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is AD. If the price of CDs decreases, her new budget constraint becomes
A) AE.
B) AO.
C) BD.
D) EF.
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75
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is AD, then his income
A) increased.
B) decreased.
C) increased and the price of bell peppers decreased.
D) decreased and the price of bell peppers increased.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint was originally EF. If his new budget constraint is AD, then his income
A) increased.
B) decreased.
C) increased and the price of bell peppers decreased.
D) decreased and the price of bell peppers increased.
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76
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint could be
A) AD.
B) BD.
C) CD.
D) Her new possible budget constraint is not shown on this graph.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint could be
A) AD.
B) BD.
C) CD.
D) Her new possible budget constraint is not shown on this graph.
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77
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is AD. If her income decreases, her new budget constraint is
A) CD.
B) BD.
C) EF.
D) not shown on this graph.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is AD. If her income decreases, her new budget constraint is
A) CD.
B) BD.
C) EF.
D) not shown on this graph.
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78
Refer to the information provided in Figure 6.5 below to answer the question(s) 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
A) CD.
B) BD.
C) AD.
D) Both B and C are correct.
Figure 6.5Refer 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
A) CD.
B) BD.
C) AD.
D) Both B and C are correct.
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79
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow. Figure 6.6
Refer to Figure 6.6. Bill's budget constraint is BD. If the price of bell peppers increases, Bill's new budget constraint is
A) AD.
B) AO.
C) CD.
D) EF.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint is BD. If the price of bell peppers increases, Bill's new budget constraint is
A) AD.
B) AO.
C) CD.
D) EF.
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80
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint is
A) AD.
B) BD.
C) CD.
D) It is not shown on this graph.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint is
A) AD.
B) BD.
C) CD.
D) It is not shown on this graph.
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Unlock Deck
Unlock for access to all 272 flashcards in this deck.
