Question 1

-The figure above shows Ilene's budget line. The price of a can of cat food is $2. Ilene's income per week is

Accepted Answer

A)  $10. 
B)  $40. 
C)  $56. 
D)  $160. 
A)  $10. 
B)  $40. 
C)  $56. 
D)  $160.

Question 2

If the price of gasoline increases and the price of food remains the same, then real income measured in terms of

Accepted Answer

A)  gasoline increases. 
B)  gasoline decreases. 
C)  food increases. 
D)  food decreases. 
A)  gasoline increases. 
B)  gasoline decreases. 
C)  food increases. 
D)  food decreases.

Question 3

All points above a given indifference curve are

Accepted Answer

A)  inferior to any point on the indifference curve. 
B)  preferred to any point on the indifference curve. 
C)  definitely not affordable. 
D)  Both answers Band C are correct. 
A)  inferior to any point on the indifference curve. 
B)  preferred to any point on the indifference curve. 
C)  definitely not affordable. 
D)  Both answers Band C are correct.

Question 4

-In the above figure, if the budget line shifts from RT to RS, the income effect is illustrated by the move from

Accepted Answer

A)  a to b. 
B)  A to c. 
C)  b to c 
D)  T to S. 
A)  a to b. 
B)  A to c. 
C)  b to c 
D)  T to S.

Question 5

-Consider the indifference maps shown above. If X and Y are perfect substitutes, your indifference curves between them would look like those in

Accepted Answer

A)  Figure A. 
B)  Figure B. 
C)  Figure C. 
D)  Figure D. 
A)  Figure A. 
B)  Figure B. 
C)  Figure C. 
D)  Figure D.

Question 6

A change in a person's money income changes real income and therefore changes the slope of the person's budget line.

Accepted Answer

A) True 
 B)False

Question 7

Samara's income is $30 a month and she spends all of it on music downloads and gasoline. The price of a music download is $1.50 and the price of a gallon of gasoline is $3. At Samara's best affordable point, her marginal rate of substitution is ________ per video tape.

Accepted Answer

A)  0.5 of a download 
B)  1 download 
C)  1.5 downloads 
D)  2 downloads 
A)  0.5 of a download 
B)  1 download 
C)  1.5 downloads 
D)  2 downloads

Question 8

-The figure above shows Sam's budget line. Why will Sam not purchase 36 gallons of gasoline and 4 pounds of coffee?

Accepted Answer

A)  because he does not like this combination 
B)  because this combination does not contain enough coffee to satisfy him 
C)  because this combination contains more gasoline than his gasoline tank will hold 
D)  because he cannot afford this combination 
A)  because he does not like this combination 
B)  because this combination does not contain enough coffee to satisfy him 
C)  because this combination contains more gasoline than his gasoline tank will hold 
D)  because he cannot afford this combination

Question 9

-The figure above shows Sally's budget line and one of her indifference curves. At point a, Sally's marginal rate of substitution is ________.

Accepted Answer

A)  1/4 
B)  4 
C)  10 
D)  40 
A)  1/4 
B)  4 
C)  10 
D)  40

Question 10

-In the above figure, Mark's monthly budget line for movies and plays changed, as shown by the arrow. Responding to this change, Mark probably will see

Accepted Answer

A)  fewer movies and fewer plays. 
B)  fewer movies and more plays. 
C)  more movies and fewer plays. 
D)  more movies and more plays. 
A)  fewer movies and fewer plays. 
B)  fewer movies and more plays. 
C)  more movies and fewer plays. 
D)  more movies and more plays.

Question 11

-In the figure above, which budget line results in the most real income in terms of compact discs?

Accepted Answer

A)  AD 
B)  BD 
C)  CD 
D)  Real income is equal for all three budget lines. 
A)  AD 
B)  BD 
C)  CD 
D)  Real income is equal for all three budget lines.

Question 12

-The above figure shows Katie's consumption possibilities. The relative price of a restaurant meal is

Accepted Answer

A)  1 movie ticket. 
B)  0.25 movie tickets. 
C)  4 movie tickets. 
D)  2 movie tickets. 
A)  1 movie ticket. 
B)  0.25 movie tickets. 
C)  4 movie tickets. 
D)  2 movie tickets.

Question 13

-In the above figure, the best affordable point is

Accepted Answer

A)  8 hamburgers and 0 magazines. 
B)  0 hamburgers and 6 magazines. 
C)  4 hamburgers and 3 magazines. 
D)  some combination that is not given above. 
A)  8 hamburgers and 0 magazines. 
B)  0 hamburgers and 6 magazines. 
C)  4 hamburgers and 3 magazines. 
D)  some combination that is not given above.

Question 14

-The figure above shows Ilene's budget line. The price of a can of cat food is $2. If the price of a can of cat food rises, her budget line will

Accepted Answer

A)  rotate inward toward the origin. 
B)  rotate outward away from the origin. 
C)  shift leftward in a parallel manner. 
D)  shift rightward in a parallel manner. 
A)  rotate inward toward the origin. 
B)  rotate outward away from the origin. 
C)  shift leftward in a parallel manner. 
D)  shift rightward in a parallel manner.

Question 15

-The figure illustrates Sally's budget line and her preferences. At point(s) ________, the marginal rate of substitution is equal to the relative price.

Accepted Answer

A)  B 
B)  B, C, and E 
C)  D 
D)  E and C 
A)  B 
B)  B, C, and E 
C)  D 
D)  E and C

Question 16

Movies are $10 a ticket, and DVD rentals are $5 a DVD. With movies on the vertical axis, the magnitude of the slope of the budget line is

Accepted Answer

A)  1/2. 
B)  2. 
C)  5. 
D)  10. 
A)  1/2. 
B)  2. 
C)  5. 
D)  10.

Question 17

When the price of only one good rises, the relative price of that good

Accepted Answer

A)  falls. 
B)  rises. 
C)  does not change. 
D)  rises if it is a normal good and falls if it is an inferior good. 
A)  falls. 
B)  rises. 
C)  does not change. 
D)  rises if it is a normal good and falls if it is an inferior good.

Question 18

If green bikes and brown bikes are perfect substitutes, the corresponding indifference curves

Accepted Answer

A)  are horizontal. 
B)  intersect each other. 
C)  are vertical. 
D)  have constant slope. 
A)  are horizontal. 
B)  intersect each other. 
C)  are vertical. 
D)  have constant slope.

Question 19

-The figure illustrates Sally's budget line and her preferences. Point ________ is Sally's best affordable point, and Sally prefers point ________ to point ________.

Accepted Answer

A)  A; B; A 
B)  E; C; B 
C)  B; A; B 
D)  B; B; D 
A)  A; B; A 
B)  E; C; B 
C)  B; A; B 
D)  B; B; D

Question 20

-Sherry is on vacation and wants to bring souvenirs home to family and friends. Her souvenir budget is $100, and she can choose between T-shirts, which cost $20 each, and key chains, which cost $5 each.
a) Draw a graph of Sherry's budget line in the figure above.
b) What is the slope of Sherry's budget line? How does that slope represent an opportunity cost?
Suppose that Sherry now finds a store where T-shirts are on sale for $10 each. (Key chains still cost $5 each).
c) Draw the new budget line in the figure.
d) What is the slope of the new budget line? How has the opportunity cost changed?

Accepted Answer

@#IMG-DLM& a) The budget line is in the figure abo

-The figure above shows Ilene's budget line. The price of a can of cat food is $2. Ilene's income per week is

If the price of gasoline increases and the price of food remains the same, then real income measured in terms of

All points above a given indifference curve are

-In the above figure, if the budget line shifts from RT to RS, the income effect is illustrated by the move from

-Consider the indifference maps shown above. If X and Y are perfect substitutes, your indifference curves between them would look like those in

A change in a person's money income changes real income and therefore changes the slope of the person's budget line.

Samara's income is $30 a month and she spends all of it on music downloads and gasoline. The price of a music download is $1.50 and the price of a gallon of gasoline is $3. At Samara's best affordable point, her marginal rate of substitution is ________ per video tape.

-The figure above shows Sam's budget line. Why will Sam not purchase 36 gallons of gasoline and 4 pounds of coffee?

-The figure above shows Sally's budget line and one of her indifference curves. At point a, Sally's marginal rate of substitution is ________.

-In the above figure, Mark's monthly budget line for movies and plays changed, as shown by the arrow. Responding to this change, Mark probably will see

-In the figure above, which budget line results in the most real income in terms of compact discs?

-The above figure shows Katie's consumption possibilities. The relative price of a restaurant meal is

-In the above figure, the best affordable point is

-The figure above shows Ilene's budget line. The price of a can of cat food is $2. If the price of a can of cat food rises, her budget line will

-The figure illustrates Sally's budget line and her preferences. At point(s) ________, the marginal rate of substitution is equal to the relative price.

Movies are $10 a ticket, and DVD rentals are $5 a DVD. With movies on the vertical axis, the magnitude of the slope of the budget line is

When the price of only one good rises, the relative price of that good

If green bikes and brown bikes are perfect substitutes, the corresponding indifference curves

-The figure illustrates Sally's budget line and her preferences. Point is Sally's best affordable point, and Sally prefers point to point .

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 9: Possibilities, Preferences, and Choices

-The figure above shows Ilene's budget line. The price of a can of cat food is $2. Ilene's income per week is

If the price of gasoline increases and the price of food remains the same, then real income measured in terms of

All points above a given indifference curve are

-In the above figure, if the budget line shifts from RT to RS, the income effect is illustrated by the move from

-Consider the indifference maps shown above. If X and Y are perfect substitutes, your indifference curves between them would look like those in

A change in a person's money income changes real income and therefore changes the slope of the person's budget line.

Samara's income is $30 a month and she spends all of it on music downloads and gasoline. The price of a music download is $1.50 and the price of a gallon of gasoline is $3. At Samara's best affordable point, her marginal rate of substitution is ________ per video tape.

-The figure above shows Sam's budget line. Why will Sam not purchase 36 gallons of gasoline and 4 pounds of coffee?

-The figure above shows Sally's budget line and one of her indifference curves. At point a, Sally's marginal rate of substitution is ________.

-In the above figure, Mark's monthly budget line for movies and plays changed, as shown by the arrow. Responding to this change, Mark probably will see

-In the figure above, which budget line results in the most real income in terms of compact discs?

-The above figure shows Katie's consumption possibilities. The relative price of a restaurant meal is

-In the above figure, the best affordable point is

-The figure above shows Ilene's budget line. The price of a can of cat food is $2. If the price of a can of cat food rises, her budget line will

-The figure illustrates Sally's budget line and her preferences. At point(s) ________, the marginal rate of substitution is equal to the relative price.

Movies are $10 a ticket, and DVD rentals are $5 a DVD. With movies on the vertical axis, the magnitude of the slope of the budget line is

When the price of only one good rises, the relative price of that good

If green bikes and brown bikes are perfect substitutes, the corresponding indifference curves

-The figure illustrates Sally's budget line and her preferences. Point ________ is Sally's best affordable point, and Sally prefers point ________ to point ________.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-The figure illustrates Sally's budget line and her preferences. Point is Sally's best affordable point, and Sally prefers point to point .