Question 1

The marginal rate of substitution is ________, the ________ is the ________.

Accepted Answer

A)  greater; flatter; indifference curve 
B)  greater; steeper; budget line 
C)  smaller; steeper; indifference curve 
D)  smaller; flatter; indifference curve 
A)  greater; flatter; indifference curve 
B)  greater; steeper; budget line 
C)  smaller; steeper; indifference curve 
D)  smaller; flatter; indifference curve

Question 2

The budget line ________.

Accepted Answer

A)  shows the limits to a household's consumption choices 
B)  illustrates a household's preferences 
C)  defines a household's consumption when prices change 
D)  shows the income a household needs to be able to buy goods and services 
A)  shows the limits to a household's consumption choices 
B)  illustrates a household's preferences 
C)  defines a household's consumption when prices change 
D)  shows the income a household needs to be able to buy goods and services

Question 3

-In the figure above, real income in terms of bags of corn chips is shown by point

Accepted Answer

A)  a. 
B)  b. 
C)  c. 
D)  d. 
A)  a. 
B)  b. 
C)  c. 
D)  d.

Question 4

-Jane spends her monthly dining-out budget of $300.00 on either steak or lobster dinners. Using the above figure, what is the opportunity cost of a lobster dinner in terms of steak dinners?

Accepted Answer

A)  0.5 steak dinners per lobster dinner 
B)  2.0 steak dinners per lobster dinner 
C)  5.0 steak dinners per lobster dinner 
D)  10.0 steak dinners per lobster dinner 
A)  0.5 steak dinners per lobster dinner 
B)  2.0 steak dinners per lobster dinner 
C)  5.0 steak dinners per lobster dinner 
D)  10.0 steak dinners per lobster dinner

Question 5

-In the above figure, a shift in the budget line in the direction indicated would occur as a result of

Accepted Answer

A)  a decrease in money income. 
B)  an increase in money income. 
C)  a fall in the price of a movie. 
D)  a rise in the price of movie. 
A)  a decrease in money income. 
B)  an increase in money income. 
C)  a fall in the price of a movie. 
D)  a rise in the price of movie.

Question 6

-The above figure gives your budget line between CDs and magazines. If the price of a magazine falls, then the budget line

Accepted Answer

A)  shifts outward and the slope does not change. 
B)  rotates inward with no change in the horizontal intercept. 
C)  rotates inward with no change in the vertical intercept. 
D)  rotates outward with no change in the vertical axis. 
A)  shifts outward and the slope does not change. 
B)  rotates inward with no change in the horizontal intercept. 
C)  rotates inward with no change in the vertical intercept. 
D)  rotates outward with no change in the vertical axis.

Question 7

Can the process of consumer choice as illustrated with a budget line/indifference curves approach explain the downward sloping demand curves that consumers have for goods, such as Pepsi?

Accepted Answer

Yes. Measure the quantity of Pepsi consu

Question 8

Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants

Accepted Answer

A)  decreases. 
B)  increases. 
C)  does not change. 
D)  initially decreases and then increases. 
A)  decreases. 
B)  increases. 
C)  does not change. 
D)  initially decreases and then increases.

Question 9

-Waldo buys only two items, pretzels and ham sandwiches. Waldo has $24 in income, pretzels cost $0.60 per bag and ham sandwiches cost $2.40 each. Which of the following statements is TRUE for the information given above?

Accepted Answer

A)  Waldo's real income expressed in terms of pretzels is 40 bags of pretzels. 
B)  Waldo's real income expressed in terms of ham sandwiches is 10 ham sandwiches. 
C)  The relative price of a ham sandwich in terms of pretzels is 4 bags of pretzels per ham sandwich. 
D)  All of the above answers are correct. 
A)  Waldo's real income expressed in terms of pretzels is 40 bags of pretzels. 
B)  Waldo's real income expressed in terms of ham sandwiches is 10 ham sandwiches. 
C)  The relative price of a ham sandwich in terms of pretzels is 4 bags of pretzels per ham sandwich. 
D)  All of the above answers are correct.

Question 10

-Melissa has an income of $240 a month to spend on tennis lessons and concert tickets. The price of a tennis lesson is $20, and the price of a concert ticket is $40. Melissa's real monthly income in terms of concerts is

Accepted Answer

A)  40. 
B)  20. 
C)  6. 
D)  12. 
A)  40. 
B)  20. 
C)  6. 
D)  12.

Question 11

-The figure above shows Ronald's budget line. He has a weekly income of $20, which he spends on hotdogs and hamburgers. Ronald's real income in terms of hamburgers ________.

Accepted Answer

A)  depends on the quantity of hamburgers consumed 
B)  depends on the quantity of hotdogs consumed 
C)  is $20 
D)  is 10 hamburgers 
A)  depends on the quantity of hamburgers consumed 
B)  depends on the quantity of hotdogs consumed 
C)  is $20 
D)  is 10 hamburgers

Question 12

-Lizzie's budget line is shown in the figure above. If the price of a magazine falls, the budget line

Accepted Answer

A)  shifts rightward and its slope does not change. 
B)  shifts leftward and its slope does not change. 
C)  becomes flatter. 
D)  becomes steeper. 
A)  shifts rightward and its slope does not change. 
B)  shifts leftward and its slope does not change. 
C)  becomes flatter. 
D)  becomes steeper.

Question 13

-Given the budget line in the above figure, if income is $60, then the price of a pizza is ________ and the price of a CD is ________.

Accepted Answer

A)  $5; $20 
B)  $6; $4 
C)  $15; 15 
D)  $10; $15 
A)  $5; $20 
B)  $6; $4 
C)  $15; 15 
D)  $10; $15

Question 14

Janelle spends all of her $40 income on songs from iTunes ($1 each) and applications ($4 each) for her iTouch. What is her budget equation?

Accepted Answer

A)  $1 × Qsong - $5 × Qapp = Y 
B)  Qsong = 10 - 4 × Qapp 
C)  $40 + $1 × Qsong = $4 × Qapp 
D)  Qapp = 10 - 1/4 × Qsong 
A)  $1 × Qsong - $5 × Qapp = Y 
B)  Qsong = 10 - 4 × Qapp 
C)  $40 + $1 × Qsong = $4 × Qapp 
D)  Qapp = 10 - 1/4 × Qsong

Question 15

Tonya, who is rich, and Jerome, who is poorer, both buy orange juice and croissants for lunch at the student cafeteria. Their budget constraints on a diagram with orange juice on the vertical axis and croissants on the horizontal have the same

Accepted Answer

A)  horizontal intercepts. 
B)  vertical intercepts. 
C)  slopes. 
D)  midpoints. 
A)  horizontal intercepts. 
B)  vertical intercepts. 
C)  slopes. 
D)  midpoints.

Question 16

Consumption at points on a steeper part of the indifference curve will reflect a higher marginal rate of substitution than consumption points on a flatter part of the indifference curve.

Accepted Answer

A) True 
 B)False

Question 17

-Lizzie's budget line is shown in the figure above. Lizzie's real income in terms of cookies is ________ cookies.

Accepted Answer

A)  5 
B)  10 
C)  15 
D)  20 
A)  5 
B)  10 
C)  15 
D)  20

Question 18

-If an individual's income increases

Accepted Answer

A)  the person's indifference curves shift outward in a parallel manner. 
B)  the person's budget line shifts outward in a parallel manner. 
C)  there will be no impact on the individual's budget line or indifference curves. 
D)  None of the above answers is correct. 
A)  the person's indifference curves shift outward in a parallel manner. 
B)  the person's budget line shifts outward in a parallel manner. 
C)  there will be no impact on the individual's budget line or indifference curves. 
D)  None of the above answers is correct.

Question 19

Suppose that the price of a bag of jellybeans is $6, and the price of a bottle of cola is $2. The relative price of cola is

Accepted Answer

A)  3 bags of jellybeans per bottle of cola. 
B)  2 bags of jellybeans per bottle of cola. 
C)  1/3 bag of jellybeans per bottle of cola. 
D)  $2. 
A)  3 bags of jellybeans per bottle of cola. 
B)  2 bags of jellybeans per bottle of cola. 
C)  1/3 bag of jellybeans per bottle of cola. 
D)  $2.

Question 20

-The table above has different combinations of hamburgers and hot dogs that Alex can buy. After labeling the axes, graph Alex's budget line in the figure, putting hot dogs on the x-axis.
a) Alex's income is $8 per day. What is the price of a hot dog? Of a hamburger?
b) What is the slope of the budget line?

Accepted Answer

@#IMG-DLM& The figure above has Alex's b

The marginal rate of substitution is , the is the .

The budget line ________.

-In the figure above, real income in terms of bags of corn chips is shown by point

-Jane spends her monthly dining-out budget of $300.00 on either steak or lobster dinners. Using the above figure, what is the opportunity cost of a lobster dinner in terms of steak dinners?

-In the above figure, a shift in the budget line in the direction indicated would occur as a result of

-The above figure gives your budget line between CDs and magazines. If the price of a magazine falls, then the budget line

Can the process of consumer choice as illustrated with a budget line/indifference curves approach explain the downward sloping demand curves that consumers have for goods, such as Pepsi?

Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants

-Waldo buys only two items, pretzels and ham sandwiches. Waldo has $24 in income, pretzels cost $0.60 per bag and ham sandwiches cost $2.40 each. Which of the following statements is TRUE for the information given above?

-Melissa has an income of $240 a month to spend on tennis lessons and concert tickets. The price of a tennis lesson is $20, and the price of a concert ticket is $40. Melissa's real monthly income in terms of concerts is

-The figure above shows Ronald's budget line. He has a weekly income of $20, which he spends on hotdogs and hamburgers. Ronald's real income in terms of hamburgers ________.

-Lizzie's budget line is shown in the figure above. If the price of a magazine falls, the budget line

-Given the budget line in the above figure, if income is $60, then the price of a pizza is and the price of a CD is .

Janelle spends all of her $40 income on songs from iTunes ($1 each) and applications ($4 each) for her iTouch. What is her budget equation?

Tonya, who is rich, and Jerome, who is poorer, both buy orange juice and croissants for lunch at the student cafeteria. Their budget constraints on a diagram with orange juice on the vertical axis and croissants on the horizontal have the same

Consumption at points on a steeper part of the indifference curve will reflect a higher marginal rate of substitution than consumption points on a flatter part of the indifference curve.

-Lizzie's budget line is shown in the figure above. Lizzie's real income in terms of cookies is ________ cookies.

-If an individual's income increases

Suppose that the price of a bag of jellybeans is $6, and the price of a bottle of cola is $2. The relative price of cola is

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 marginal rate of substitution is ________, the ________ is the ________.

The budget line ________.

-In the figure above, real income in terms of bags of corn chips is shown by point

-Jane spends her monthly dining-out budget of $300.00 on either steak or lobster dinners. Using the above figure, what is the opportunity cost of a lobster dinner in terms of steak dinners?

-In the above figure, a shift in the budget line in the direction indicated would occur as a result of

-The above figure gives your budget line between CDs and magazines. If the price of a magazine falls, then the budget line

Can the process of consumer choice as illustrated with a budget line/indifference curves approach explain the downward sloping demand curves that consumers have for goods, such as Pepsi?

Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants

-Waldo buys only two items, pretzels and ham sandwiches. Waldo has $24 in income, pretzels cost $0.60 per bag and ham sandwiches cost $2.40 each. Which of the following statements is TRUE for the information given above?

-Melissa has an income of $240 a month to spend on tennis lessons and concert tickets. The price of a tennis lesson is $20, and the price of a concert ticket is $40. Melissa's real monthly income in terms of concerts is

-The figure above shows Ronald's budget line. He has a weekly income of $20, which he spends on hotdogs and hamburgers. Ronald's real income in terms of hamburgers ________.

-Lizzie's budget line is shown in the figure above. If the price of a magazine falls, the budget line

-Given the budget line in the above figure, if income is $60, then the price of a pizza is ________ and the price of a CD is ________.

Janelle spends all of her $40 income on songs from iTunes ($1 each) and applications ($4 each) for her iTouch. What is her budget equation?

Tonya, who is rich, and Jerome, who is poorer, both buy orange juice and croissants for lunch at the student cafeteria. Their budget constraints on a diagram with orange juice on the vertical axis and croissants on the horizontal have the same

Consumption at points on a steeper part of the indifference curve will reflect a higher marginal rate of substitution than consumption points on a flatter part of the indifference curve.

-Lizzie's budget line is shown in the figure above. Lizzie's real income in terms of cookies is ________ cookies.

-If an individual's income increases

Suppose that the price of a bag of jellybeans is $6, and the price of a bottle of cola is $2. The relative price of cola is

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 marginal rate of substitution is , the is the .

-Given the budget line in the above figure, if income is $60, then the price of a pizza is and the price of a CD is .