Question 1

Figure 5-13  
-In Figure 5-13, the slope of the budget line (dropping all minus signs) equals

Accepted Answer

A) price of good X/price of good Y. 
B) price of good Y/price of good X. 
C) the minimum number of units of good Y the consumer would have to receive to make him willing to give up one unit of good X. 
D) the minimum number of units of good X the consumer would have to receive to make him willing to give up one unit of good Y. 
A) price of good X/price of good Y. 
B) price of good Y/price of good X. 
C) the minimum number of units of good Y the consumer would have to receive to make him willing to give up one unit of good X. 
D) the minimum number of units of good X the consumer would have to receive to make him willing to give up one unit of good Y.

Question 2

The market demand curve represents the total quantity demanded at each price.

Accepted Answer

A) True 
 B)False

Question 3

A consumer cannot gain consumer's surplus if she purchases more than one unit of a good.

Accepted Answer

A) True 
 B)False

Question 4

Any point on the lowest indifference curve is preferable to a point on a higher indifference curve.

Accepted Answer

A) True 
 B)False

Question 5

An optimal consumption bundle will always be on the highest attainable indifference curve for the consumer.

Accepted Answer

A) True 
 B)False

Question 6

Modern economists measure how much utility Fred gets from a hot dog by

Accepted Answer

A) asking Fred how many utils he gets from its consumption. 
B) examining the price of the hamburger Fred chose not to buy. 
C) asking Fred how much of some other good he would give up to get the hot dog.The "other good" can be any good except money. 
D) asking Fred how much of some other good he would give up to get the hot dog.The "other good" can be any good, including money. 
A) asking Fred how many utils he gets from its consumption. 
B) examining the price of the hamburger Fred chose not to buy. 
C) asking Fred how much of some other good he would give up to get the hot dog.The "other good" can be any good except money. 
D) asking Fred how much of some other good he would give up to get the hot dog.The "other good" can be any good, including money.

Question 7

The market demand curve is the horizontal summation of all individual demand curves.

Accepted Answer

A) True 
 B)False

Question 8

The budget line and the indifference curve are geometric devices used to provide a closer look at consumer choice.

Accepted Answer

A) True 
 B)False

Question 9

An increase in a consumer's income will always increase the demand for a good.

Accepted Answer

A) True 
 B)False

Question 10

The theory of consumer choice is based on the hypothesis that each consumer wants to

Accepted Answer

A) maximize her total utility. 
B) maximize her marginal utility. 
C) minimize the rate at which her marginal utility diminishes. 
D) minimize the percentage of her consumption diverted to inferior goods. 
A) maximize her total utility. 
B) maximize her marginal utility. 
C) minimize the rate at which her marginal utility diminishes. 
D) minimize the percentage of her consumption diverted to inferior goods.

Question 11

If the marginal net utility of beer is negative, the consumer should buy more beer in order to increase the total utility.

Accepted Answer

A) True 
 B)False

Question 12

By changing the amount of income a consumer has to spend, a change in the price of one good may affect the quantity demanded of another good.

Accepted Answer

A) True 
 B)False

Question 13

The law of diminishing marginal utility holds that at some point consumption of additional units of a commodity adds less to total utility.

Accepted Answer

A) True 
 B)False

Exam 5: Consumer Choice: Individual and Market Demand

Figure 5-13 -In Figure 5-13, the slope of the budget line (dropping all minus signs) equals

The market demand curve represents the total quantity demanded at each price.

A consumer cannot gain consumer's surplus if she purchases more than one unit of a good.

Any point on the lowest indifference curve is preferable to a point on a higher indifference curve.

An optimal consumption bundle will always be on the highest attainable indifference curve for the consumer.

Modern economists measure how much utility Fred gets from a hot dog by

The market demand curve is the horizontal summation of all individual demand curves.

The budget line and the indifference curve are geometric devices used to provide a closer look at consumer choice.

An increase in a consumer's income will always increase the demand for a good.

The theory of consumer choice is based on the hypothesis that each consumer wants to

If the marginal net utility of beer is negative, the consumer should buy more beer in order to increase the total utility.

By changing the amount of income a consumer has to spend, a change in the price of one good may affect the quantity demanded of another good.

The law of diminishing marginal utility holds that at some point consumption of additional units of a commodity adds less to total utility.

What Is Economics

The Economony: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Useconomy

Filters