Question 1

If a consumer's budget increases, the budget line

Accepted Answer

A) rotates outward and its slope changes. 
B) rotates inward and its slope changes. 
C) shifts outward and its slope does not change. 
D) shifts inward and its slope does not change. 
E) does not change. 
A) rotates outward and its slope changes. 
B) rotates inward and its slope changes. 
C) shifts outward and its slope does not change. 
D) shifts inward and its slope does not change. 
E) does not change.

Question 2

A budget line shows the

Accepted Answer

A) quantities of goods a buyer can purchase with given income and prices. 
B) relationship between price and quantity demanded. 
C) total utility a consumer realizes from consuming different quantities of a good. 
D) quantities of consumption that maximizes marginal utility. 
E) the prices of the two goods a buyer can purchase. 
A) quantities of goods a buyer can purchase with given income and prices. 
B) relationship between price and quantity demanded. 
C) total utility a consumer realizes from consuming different quantities of a good. 
D) quantities of consumption that maximizes marginal utility. 
E) the prices of the two goods a buyer can purchase.

Question 3

When the price of one good changes while another good's price does not change, then there has been a change in the

Accepted Answer

A) relative price. 
B) marginal utility price. 
C) absolute price. 
D) marginal price. 
E) utility price. 
A) relative price. 
B) marginal utility price. 
C) absolute price. 
D) marginal price. 
E) utility price.

Question 4

Moving down along an indifference curve,

Accepted Answer

A) the price of the good measured on the vertical axis decreases. 
B) total utility decreases. 
C) the marginal rate of substitution for the good on the horizontal axis decreases. 
D) the slope of the budget line decreases. 
E) the consumer increasingly prefers the new consumption points to the old consumption points. 
A) the price of the good measured on the vertical axis decreases. 
B) total utility decreases. 
C) the marginal rate of substitution for the good on the horizontal axis decreases. 
D) the slope of the budget line decreases. 
E) the consumer increasingly prefers the new consumption points to the old consumption points.

Question 5

"As Mike consumes more dates over the course of a day, it is likely that his marginal rate of substitution of dates for other goods will rise." Is the previous statement correct or incorrect?

Accepted Answer

The statement is incorrect.The principle

Question 6

Sushi costs $3 per piece.Cynthia's total utility after eating one piece is 30 and her total utility after eating 2 pieces is 51, so her marginal utility from the second piece is

Accepted Answer

A) 17. 
B) 10. 
C) 51. 
D) 7. 
E) 21. 
A) 17. 
B) 10. 
C) 51. 
D) 7. 
E) 21.

Question 7

-Which of the following are true?
I∙Points C and G are equally preferred because they lie on the same indifference curve.
Ii∙Points C and J are equally preferred because on them the consumption of chewing gum is equal.
Iii∙Points G and J are equally preferred because on them the consumption of water is equal.

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) ii and iii 
E) i, ii, and iii 
A) i only 
B) ii only 
C) iii only 
D) ii and iii 
E) i, ii, and iii

Question 8

-The table above shows Buffy's utility from wooden stakes and cloves of garlic.As Buffy uses more stakes, the marginal utility of a stake ________ and as she uses more cloves of garlic, the marginal utility of a clove of garlic ________.

Accepted Answer

A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change 
A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change

Question 9

-Susan can watch movies or attend plays.The table above gives combinations of movies and plays that are on her budget line.If the price of a movie is $10, then her budget for movies and plays is

Accepted Answer

A) $10 per month. 
B) $50 per month. 
C) $60 per month. 
D) $120 per month. 
E) unknown from the information. 
A) $10 per month. 
B) $50 per month. 
C) $60 per month. 
D) $120 per month. 
E) unknown from the information.

Question 10

A preference map is a set of

Accepted Answer

A) indifference curves. 
B) budget lines. 
C) demand curves. 
D) substitution curves. 
E) marginal rate of substitution curves. 
A) indifference curves. 
B) budget lines. 
C) demand curves. 
D) substitution curves. 
E) marginal rate of substitution curves.

Question 11

If a consumer has allocated his or her budget and found the combination of goods where all marginal utilities divided by price are equal, what would happen if the consumer were forced to consume some other combination of goods? The consumer

Accepted Answer

A) will definitely have higher total utility. 
B) will definitely have lower total utility. 
C) will definitely not experience any change in total utility. 
D) might be have higher, lower, or the same total utility but more information is needed to determine which. 
E) None of the above answers is correct. 
A) will definitely have higher total utility. 
B) will definitely have lower total utility. 
C) will definitely not experience any change in total utility. 
D) might be have higher, lower, or the same total utility but more information is needed to determine which. 
E) None of the above answers is correct.

Question 12

Kevin likes weasel leg stew.But every bite of the stew that he eats provides him with less and less total utility.This fact means that Kevin's marginal utility is

Accepted Answer

A) decreasing. 
B) increasing, but at a decreasing rate. 
C) increasing at an increasing rate. 
D) not changing. 
E) changing but the rate of change is not certain without more information. 
A) decreasing. 
B) increasing, but at a decreasing rate. 
C) increasing at an increasing rate. 
D) not changing. 
E) changing but the rate of change is not certain without more information.

Question 13

If one of the products a consumer buys rises in price, the consumer's budget line will

Accepted Answer

A) shift farther away from the origin of the graph and not change its slope. 
B) rotate inward, closer to the origin. 
C) vanish. 
D) undergo no change. 
E) shift farther away from the origin of the graph and become steeper. 
A) shift farther away from the origin of the graph and not change its slope. 
B) rotate inward, closer to the origin. 
C) vanish. 
D) undergo no change. 
E) shift farther away from the origin of the graph and become steeper.

Question 14

What does the slope of the budget line equal?

Accepted Answer

The slope of the budget line equals an o

Question 15

Assume you are in a store looking at a shirt you want.You expect to buy the shirt until you look at the price, then you decide the shirt is not a good buy.How can your decision be viewed in economic terms?

Accepted Answer

A) The shirt's marginal utility divided by price was too low compared to other goods. 
B) The shirt has zero marginal utility for you. 
C) The opportunity cost of the shirt was too low. 
D) The shirt's marginal utility divided by price was too high compared to other goods. 
E) None of the above answers is correct. 
A) The shirt's marginal utility divided by price was too low compared to other goods. 
B) The shirt has zero marginal utility for you. 
C) The opportunity cost of the shirt was too low. 
D) The shirt's marginal utility divided by price was too high compared to other goods. 
E) None of the above answers is correct.

Question 16

-The figure above shows Sarah's budget line.Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.Sarah will be at what point on her budget line if she spends $200 per week on sushi?

Accepted Answer

A) Point a 
B) Point b 
C) Point c 
D) Point f 
E) Point d 
A) Point a 
B) Point b 
C) Point c 
D) Point f 
E) Point d

Question 17

Utility is the

Accepted Answer

A) benefit or satisfaction that a person gets from the consumption of a good or service. 
B) measure of how useful a resource is in the production process. 
C) measure of productivity associated with a good or service. 
D) economic term for consumption possibilities. 
E) economic term for how changes in price affect a consumer's purchases. 
A) benefit or satisfaction that a person gets from the consumption of a good or service. 
B) measure of how useful a resource is in the production process. 
C) measure of productivity associated with a good or service. 
D) economic term for consumption possibilities. 
E) economic term for how changes in price affect a consumer's purchases.

Question 18

The indifference curve/budget line diagram concludes that Jim is definitely in equilibrium when he is

Accepted Answer

A) spending all his budget. 
B) saving some of his budget. 
C) consuming the combination of goods and services that is affordable and on the highest attainable indifference curve. 
D) consuming a combination of goods and services that is on an indifference curve. 
E) None of the above answers is correct. 
A) spending all his budget. 
B) saving some of his budget. 
C) consuming the combination of goods and services that is affordable and on the highest attainable indifference curve. 
D) consuming a combination of goods and services that is on an indifference curve. 
E) None of the above answers is correct.

Question 19

The marginal rate of substitution of one good for another is measured by moving

Accepted Answer

A) along an indifference curve. 
B) among different indifference curves. 
C) along a budget line. 
D) among different budget lines. 
E) along a demand curve. 
A) along an indifference curve. 
B) among different indifference curves. 
C) along a budget line. 
D) among different budget lines. 
E) along a demand curve.

Question 20

An indifference curve shows

Accepted Answer

A) utility maximizing levels of consumption. 
B) preferred combinations of goods. 
C) a diminishing marginal rate of substitution as more of both goods are consumed. 
D) combinations of goods among which a person is indifferent. 
E) an increasing marginal rate of substitution for a good as more of it is consumed. 
A) utility maximizing levels of consumption. 
B) preferred combinations of goods. 
C) a diminishing marginal rate of substitution as more of both goods are consumed. 
D) combinations of goods among which a person is indifferent. 
E) an increasing marginal rate of substitution for a good as more of it is consumed.

If a consumer's budget increases, the budget line

A budget line shows the

When the price of one good changes while another good's price does not change, then there has been a change in the

Moving down along an indifference curve,

"As Mike consumes more dates over the course of a day, it is likely that his marginal rate of substitution of dates for other goods will rise." Is the previous statement correct or incorrect?

Sushi costs $3 per piece.Cynthia's total utility after eating one piece is 30 and her total utility after eating 2 pieces is 51, so her marginal utility from the second piece is

-The table above shows Buffy's utility from wooden stakes and cloves of garlic.As Buffy uses more stakes, the marginal utility of a stake and as she uses more cloves of garlic, the marginal utility of a clove of garlic .

-Susan can watch movies or attend plays.The table above gives combinations of movies and plays that are on her budget line.If the price of a movie is $10, then her budget for movies and plays is

A preference map is a set of

If a consumer has allocated his or her budget and found the combination of goods where all marginal utilities divided by price are equal, what would happen if the consumer were forced to consume some other combination of goods? The consumer

Kevin likes weasel leg stew.But every bite of the stew that he eats provides him with less and less total utility.This fact means that Kevin's marginal utility is

If one of the products a consumer buys rises in price, the consumer's budget line will

What does the slope of the budget line equal?

Assume you are in a store looking at a shirt you want.You expect to buy the shirt until you look at the price, then you decide the shirt is not a good buy.How can your decision be viewed in economic terms?

-The figure above shows Sarah's budget line.Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.Sarah will be at what point on her budget line if she spends $200 per week on sushi?

Utility is the

The indifference curve/budget line diagram concludes that Jim is definitely in equilibrium when he is

The marginal rate of substitution of one good for another is measured by moving

An indifference curve shows

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 13: Consumer Choice and Demand

If a consumer's budget increases, the budget line

A budget line shows the

When the price of one good changes while another good's price does not change, then there has been a change in the

Moving down along an indifference curve,

"As Mike consumes more dates over the course of a day, it is likely that his marginal rate of substitution of dates for other goods will rise." Is the previous statement correct or incorrect?

Sushi costs $3 per piece.Cynthia's total utility after eating one piece is 30 and her total utility after eating 2 pieces is 51, so her marginal utility from the second piece is

-The table above shows Buffy's utility from wooden stakes and cloves of garlic.As Buffy uses more stakes, the marginal utility of a stake ________ and as she uses more cloves of garlic, the marginal utility of a clove of garlic ________.

-Susan can watch movies or attend plays.The table above gives combinations of movies and plays that are on her budget line.If the price of a movie is $10, then her budget for movies and plays is

A preference map is a set of

If a consumer has allocated his or her budget and found the combination of goods where all marginal utilities divided by price are equal, what would happen if the consumer were forced to consume some other combination of goods? The consumer

Kevin likes weasel leg stew.But every bite of the stew that he eats provides him with less and less total utility.This fact means that Kevin's marginal utility is

If one of the products a consumer buys rises in price, the consumer's budget line will

What does the slope of the budget line equal?

Assume you are in a store looking at a shirt you want.You expect to buy the shirt until you look at the price, then you decide the shirt is not a good buy.How can your decision be viewed in economic terms?

-The figure above shows Sarah's budget line.Sarah earns $500 per week selling baskets made out of tree vines.With this money she buys sushi and rose bushes.Each piece of sushi costs $1 and each rose bush costs $10.Sarah will be at what point on her budget line if she spends $200 per week on sushi?

Utility is the

The indifference curve/budget line diagram concludes that Jim is definitely in equilibrium when he is

The marginal rate of substitution of one good for another is measured by moving

An indifference curve shows

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

-The table above shows Buffy's utility from wooden stakes and cloves of garlic.As Buffy uses more stakes, the marginal utility of a stake and as she uses more cloves of garlic, the marginal utility of a clove of garlic .