Question 1

The feature of preferences that "more is better"

Accepted Answer

A) is a logical consequence of transitivity 
B) is shared by most people,most of the time. 
C) implies that 5 apples will always be preferred to 4 oranges 
D) implies that 5 apples will always be preferred to 5 oranges 
E) means that,when dining,people always try to eat as much as they possibly can 
A) is a logical consequence of transitivity 
B) is shared by most people,most of the time. 
C) implies that 5 apples will always be preferred to 4 oranges 
D) implies that 5 apples will always be preferred to 5 oranges 
E) means that,when dining,people always try to eat as much as they possibly can

Question 2

If marginal utility from consuming an extra unit of a good is positive,then the consumer's total utility must increase as more of the good is consumed.

Accepted Answer

A) True 
 B)False

Question 3

In allocating time between studying French and studying economics,

Accepted Answer

A) exam points are inferior goods 
B) we can think of students "buying" exam points with hours spent studying 
C) we can think of students "buying" exam points with money 
D) the demand curve for exam points is upward sloping 
E) we can think of students "buying" study time for cash 
A) exam points are inferior goods 
B) we can think of students "buying" exam points with hours spent studying 
C) we can think of students "buying" exam points with money 
D) the demand curve for exam points is upward sloping 
E) we can think of students "buying" study time for cash

Question 4

For an inferior good,the income effect

Accepted Answer

A) is zero 
B) at least partially offsets the substitution effect 
C) operates to increase the quantity demanded 
D) helps explain why the demand curve slopes upward 
E) does not exist 
A) is zero 
B) at least partially offsets the substitution effect 
C) operates to increase the quantity demanded 
D) helps explain why the demand curve slopes upward 
E) does not exist

Question 5

Suppose there are three buyers in the market for bottled water.At a price of $2 per bottle,Jerry demands 23 bottles,Elaine demands 14 bottles,and Kramer demands 7 bottles.One point on,the market demand curve for bottled water is

Accepted Answer

A) price = $2 and quantity = 23 bottles 
B) price = $88 and quantity = 44 bottles 
C) price = $88 dollars and quantity = 14 bottles 
D) price = $2 and quantity = 44 bottles 
E) impossible to determine from the information given 
A) price = $2 and quantity = 23 bottles 
B) price = $88 and quantity = 44 bottles 
C) price = $88 dollars and quantity = 14 bottles 
D) price = $2 and quantity = 44 bottles 
E) impossible to determine from the information given

Question 6

-Which panel in Figure 6-2 shows the effect of an increase in income,other things constant?

Accepted Answer

A) panel a 
B) panel b 
C) panel c 
D) panel d 
E) panel e 
A) panel a 
B) panel b 
C) panel c 
D) panel d 
E) panel e

Question 7

The income effect of a lower price for good A

Accepted Answer

A) invariably leads a consumer to buy more of good A,because the combination of unchanged money income and lower price raises that consumer's real income or purchasing power 
B) invariably leads a consumer to buy less of good A because the combination of unchanged money income and lower price encourages that consumer to buy more of other goods 
C) may lead to a larger,smaller,or even an unchanged quantity of good A demanded;it all depends on the nature of the good itself 
D) creates a change in the good's relative price and,therefore,causes the consumer to substitute good A in place of other goods 
E) causes a parallel outward shift of the budget line,enabling the consumer to buy more of all goods than before 
A) invariably leads a consumer to buy more of good A,because the combination of unchanged money income and lower price raises that consumer's real income or purchasing power 
B) invariably leads a consumer to buy less of good A because the combination of unchanged money income and lower price encourages that consumer to buy more of other goods 
C) may lead to a larger,smaller,or even an unchanged quantity of good A demanded;it all depends on the nature of the good itself 
D) creates a change in the good's relative price and,therefore,causes the consumer to substitute good A in place of other goods 
E) causes a parallel outward shift of the budget line,enabling the consumer to buy more of all goods than before

Question 8

If diminishing marginal utility holds,and a person consumes less of a good,then all else being equal

Accepted Answer

A) the price of the good will rise 
B) total utility will rise 
C) marginal utility will rise 
D) expenditure on the good will increase 
E) marginal utility will decline 
A) the price of the good will rise 
B) total utility will rise 
C) marginal utility will rise 
D) expenditure on the good will increase 
E) marginal utility will decline

Question 9

-Which panel in Figure 6-2 shows the effect of a decrease in the price of apples,other things constant?

Accepted Answer

A) panel a 
B) panel b 
C) panel c 
D) panel d 
E) panel e 
A) panel a 
B) panel b 
C) panel c 
D) panel d 
E) panel e

Question 10

Among all the combinations of goods attainable by a consumer facing a budget constraint,the one that maximizes total utility is the one that

Accepted Answer

A) maximizes marginal utility per dollar spent on each good 
B) maximizes marginal utility per pound,or other physical quantity,of each good 
C) equates the marginal utilities per dollar spent on each good 
D) equates the marginal utilities per pound,or other physical quantity,of each good 
E) drives the marginal utility of each good to zero 
A) maximizes marginal utility per dollar spent on each good 
B) maximizes marginal utility per pound,or other physical quantity,of each good 
C) equates the marginal utilities per dollar spent on each good 
D) equates the marginal utilities per pound,or other physical quantity,of each good 
E) drives the marginal utility of each good to zero

Question 11

Suppose that the price of a pizza is $10 and that the price of a blouse is $30.At her present level of consumption,Magda's ratio of marginal utility of pizza to marginal utility of blouses is 1/2.To maximize total utility,she should

Accepted Answer

A) buy more pizzas and fewer blouses 
B) buy fewer pizzas and more blouses 
C) continue to buy the same quantities of pizza and blouses 
D) spend more time consuming pizza 
E) spend more time buying blouses 
A) buy more pizzas and fewer blouses 
B) buy fewer pizzas and more blouses 
C) continue to buy the same quantities of pizza and blouses 
D) spend more time consuming pizza 
E) spend more time buying blouses

Question 12

-Which panel in Figure 6-2 shows the combined effects of an increase in the price of oranges and a decrease in the price of apples?

Accepted Answer

A) panel a 
B) panel b 
C) panel c 
D) panel d 
E) none of these 
A) panel a 
B) panel b 
C) panel c 
D) panel d 
E) none of these

Question 13

As Reba consumes four slices of pizza,her total utility rises from 0 to 18,to 24,to 28,and to 30,respectively.What is her marginal utility of the first slice of pizza?

Accepted Answer

A) 18 
B) 24 
C) 2 
D) 7 
E) 8 
A) 18 
B) 24 
C) 2 
D) 7 
E) 8

Question 14

The budget line is useful for illustrating the notion of opportunity cost.

Accepted Answer

A) True 
 B)False

Question 15

An individual's demand curve for a good is derived by

Accepted Answer

A) varying the income level and observing the resulting total utility derived from both goods 
B) varying the price of one good and observing the resulting quantities demanded of the other good 
C) varying the prices of both goods and observing the changes in quantities demanded of both goods 
D) shifting the budget line to the left and calculating the loss in total utility 
E) varying the price of one good and observing the resulting quantities demanded of that good 
A) varying the income level and observing the resulting total utility derived from both goods 
B) varying the price of one good and observing the resulting quantities demanded of the other good 
C) varying the prices of both goods and observing the changes in quantities demanded of both goods 
D) shifting the budget line to the left and calculating the loss in total utility 
E) varying the price of one good and observing the resulting quantities demanded of that good

Question 16

An increase in the price of the good measured on the vertical axis of a budget line diagram will

Accepted Answer

A) cause a parallel outward shift of the budget line 
B) leave the budget line unchanged 
C) cause a parallel inward shift of the budget line 
D) make the budget line flatter 
E) make the budget line steeper 
A) cause a parallel outward shift of the budget line 
B) leave the budget line unchanged 
C) cause a parallel inward shift of the budget line 
D) make the budget line flatter 
E) make the budget line steeper

Question 17

The ratio of the price of the good on the horizontal axis divided by the price of the good on the vertical axis multiplied by -1

Accepted Answer

A) is the slope of the demand curve 
B) measures the price elasticity of demand for a particular good 
C) defines real income for the consumer 
D) is the slope of the budget line 
E) is the slope of the indifference curve 
A) is the slope of the demand curve 
B) measures the price elasticity of demand for a particular good 
C) defines real income for the consumer 
D) is the slope of the budget line 
E) is the slope of the indifference curve

Question 18

If the price of a haircut increases,

Accepted Answer

A) haircuts become more expensive relative to other goods and services 
B) haircuts become less expensive relative to having a friend cut your hair 
C) people will have their hair cut more often 
D) haircuts become less expensive relative to other goods and services 
E) the budget constraint will shift outward 
A) haircuts become more expensive relative to other goods and services 
B) haircuts become less expensive relative to having a friend cut your hair 
C) people will have their hair cut more often 
D) haircuts become less expensive relative to other goods and services 
E) the budget constraint will shift outward

Question 19

If a consumer's budget line between meat and potatoes has a vertical axis intercept at 100 pounds of meat and a horizontal axis intercept at 100 pounds of potatoes

Accepted Answer

A) demand must be inelastic 
B) the consumer's budget must equal $100 
C) both meat and potatoes must be priced at $1 per pound 
D) the price of a pound of meat must equal the price of a pound of potatoes 
E) the opportunity cost of meat in terms of potatoes cannot be determined 
A) demand must be inelastic 
B) the consumer's budget must equal $100 
C) both meat and potatoes must be priced at $1 per pound 
D) the price of a pound of meat must equal the price of a pound of potatoes 
E) the opportunity cost of meat in terms of potatoes cannot be determined

Question 20

If all consumers satisfy economists' assumptions regarding utility,then

Accepted Answer

A) they will each choose a consumption bundle that is inside the budget line 
B) everyone will choose the same consumption bundle 
C) everyone will have the same budget line 
D) all consumers will react in the same way to a price change 
E) each person will choose a consumption bundle on his or her budget line 
A) they will each choose a consumption bundle that is inside the budget line 
B) everyone will choose the same consumption bundle 
C) everyone will have the same budget line 
D) all consumers will react in the same way to a price change 
E) each person will choose a consumption bundle on his or her budget line

The feature of preferences that "more is better"

If marginal utility from consuming an extra unit of a good is positive,then the consumer's total utility must increase as more of the good is consumed.

In allocating time between studying French and studying economics,

For an inferior good,the income effect

Suppose there are three buyers in the market for bottled water.At a price of $2 per bottle,Jerry demands 23 bottles,Elaine demands 14 bottles,and Kramer demands 7 bottles.One point on,the market demand curve for bottled water is

-Which panel in Figure 6-2 shows the effect of an increase in income,other things constant?

The income effect of a lower price for good A

If diminishing marginal utility holds,and a person consumes less of a good,then all else being equal

-Which panel in Figure 6-2 shows the effect of a decrease in the price of apples,other things constant?

Among all the combinations of goods attainable by a consumer facing a budget constraint,the one that maximizes total utility is the one that

Suppose that the price of a pizza is $10 and that the price of a blouse is $30.At her present level of consumption,Magda's ratio of marginal utility of pizza to marginal utility of blouses is 1/2.To maximize total utility,she should

-Which panel in Figure 6-2 shows the combined effects of an increase in the price of oranges and a decrease in the price of apples?

As Reba consumes four slices of pizza,her total utility rises from 0 to 18,to 24,to 28,and to 30,respectively.What is her marginal utility of the first slice of pizza?

The budget line is useful for illustrating the notion of opportunity cost.

An individual's demand curve for a good is derived by

An increase in the price of the good measured on the vertical axis of a budget line diagram will

The ratio of the price of the good on the horizontal axis divided by the price of the good on the vertical axis multiplied by -1

If the price of a haircut increases,

If a consumer's budget line between meat and potatoes has a vertical axis intercept at 100 pounds of meat and a horizontal axis intercept at 100 pounds of potatoes

If all consumers satisfy economists' assumptions regarding utility,then

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 6: Consumer Choice

The feature of preferences that "more is better"

If marginal utility from consuming an extra unit of a good is positive,then the consumer's total utility must increase as more of the good is consumed.

In allocating time between studying French and studying economics,

For an inferior good,the income effect

Suppose there are three buyers in the market for bottled water.At a price of $2 per bottle,Jerry demands 23 bottles,Elaine demands 14 bottles,and Kramer demands 7 bottles.One point on,the market demand curve for bottled water is

-Which panel in Figure 6-2 shows the effect of an increase in income,other things constant?

The income effect of a lower price for good A

If diminishing marginal utility holds,and a person consumes less of a good,then all else being equal

-Which panel in Figure 6-2 shows the effect of a decrease in the price of apples,other things constant?

Among all the combinations of goods attainable by a consumer facing a budget constraint,the one that maximizes total utility is the one that

Suppose that the price of a pizza is $10 and that the price of a blouse is $30.At her present level of consumption,Magda's ratio of marginal utility of pizza to marginal utility of blouses is 1/2.To maximize total utility,she should

-Which panel in Figure 6-2 shows the combined effects of an increase in the price of oranges and a decrease in the price of apples?

As Reba consumes four slices of pizza,her total utility rises from 0 to 18,to 24,to 28,and to 30,respectively.What is her marginal utility of the first slice of pizza?

The budget line is useful for illustrating the notion of opportunity cost.

An individual's demand curve for a good is derived by

An increase in the price of the good measured on the vertical axis of a budget line diagram will

The ratio of the price of the good on the horizontal axis divided by the price of the good on the vertical axis multiplied by -1

If the price of a haircut increases,

If a consumer's budget line between meat and potatoes has a vertical axis intercept at 100 pounds of meat and a horizontal axis intercept at 100 pounds of potatoes

If all consumers satisfy economists' assumptions regarding utility,then

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters