Exam 9: Possibilities, preferences, and Choices

A consumer considers Coke and Pepsi to be perfect substitutes for each other.What would the consumer's indifference curves for these two goods look like?

If the price of the good measured on the vertical axis increases,the budget line

The budget line depends on

If two goods are perfect substitutes,then their

A consumer choosing between apples and oranges is at her best affordable point.Then the price of apples decreases.If both apples and oranges are normal goods,which one of the following statements is true about her new best affordable point?

Use the figure below to answer the following questions. Figure 9.2.1 -Which of the indifference curves in Figure 9.2.1 illustrates perfect complements?

For a normal good,the income effect

Larry consumes only beer (B)and chips (C).The equation of his budget line (with beer measured on the vertical axis)is

Peter's income increases and so does his consumption of both movies and pop,but his consumption of pop increases by less than his consumption of movies increases.Which one of the following statements is true for Peter?

Use the figure below to answer the following questions. Figure 9.1.2 -Refer to Figure 9.1.2.Which budget line shows the greatest real income in terms of carrots?

Jay has an income of $10 to buy peanuts and popcorn.The price of peanuts is $1 a bag and the price of popcorn is $2 a bag.He chooses to consume 5 bags of peanuts and 2 bags of popcorn.What can we say about this consumption choice?

Use the figure below to answer the following question. Figure 9.2.5 -Refer to Figure 9.2.5.The graphs show indifference curves for various goods.Graph ________ best describes the pair of goods baseballs and baseball bats.Graph ________ best describes the pair of goods desktop computers and laptop computers.

Use the figure below to answer the following questions. Figure 9.2.3 -Refer to Figure 9.2.3.When Rashid chooses the consumption point of 2 books and 6 CDs,his marginal rate of substitution is

When Jim is at his best affordable point,the budget line

Karen consumes chocolate and candles.When Karen is at her best affordable point,she is

Use the figure below to answer the following questions. Figure 9.3.3 -Consider an initial budget line labelled RS in Figure 9.3.3.The budget line becomes RT with

Suppose all prices double and income also doubles.Which statement is true?

Use the information below to answer the following questions. Fact 9.3.1 Marc has an income of $20 and spends it on two goods,root beer (measured on the vertical axis)and chips (measured on the horizontal axis).The price of root beer is $1 a can.The price of chips is $0.50 a bag.Initially,Marc chooses to consume 10 cans of root beer and 20 bags of chips.Then the price of root beer rises to $1.50 per can and the price of chips falls to $0.25 a bag. -Refer to Fact 9.3.1.When the price of a bag of chips falls,Marc

Larry consumes only beer (B)and chips (C).If beer is measured on the vertical axis,the relative price of chips in terms of beer is all of the following except

Use the figure below to answer the following questions. Figure 9.1.2 -Refer to Figure 9.1.2.Which budget line shows the greatest real income in terms of music downloads?