Question 1

If two consumption points are not on the same indifference curve, then one point is ________.

Accepted Answer

A)  a substitute for the other point 
B)  unaffordable and the other is affordable 
C)  preferred to the other 
D)  more expensive than the other 
A)  a substitute for the other point 
B)  unaffordable and the other is affordable 
C)  preferred to the other 
D)  more expensive than the other

Question 2

Lily is a college student who likes to buy only two goods: Cheetos and Pepsi. To determine Lily's budget line, you need to know I. Lily's preferences for Cheetos and Pepsi.
II) The prices of Cheetos and Pepsi.
III) Lily's income.

Accepted Answer

A)  II only 
B)  I and II 
C)  II and III 
D)  I, II and III 
A)  II only 
B)  I and II 
C)  II and III 
D)  I, II and III

Question 3

Suppose the price of chocolate chip cookies is $4.00 per pound and the price of a slice of cake is $2.00 per slice. The relative price of cookies in terms of cake is

Accepted Answer

A)  $2.00 per cookie. 
B)  $4.00 per cookie. 
C)  1/2 slice of cake per cookie. 
D)  2 slices of cake per cookie. 
A)  $2.00 per cookie. 
B)  $4.00 per cookie. 
C)  1/2 slice of cake per cookie. 
D)  2 slices of cake per cookie.

Question 4

-The figure above shows Sam's budget line. Which of the following combinations of gasoline and coffee are not available to Sam?

Accepted Answer

A)  40 gallons of gasoline and 0 pounds of coffee 
B)  32 gallons of gasoline and 4 pounds of coffee 
C)  8 gallons of gasoline and 8 pounds of coffee 
D)  16 gallons of gasoline and 16 pounds of coffee 
A)  40 gallons of gasoline and 0 pounds of coffee 
B)  32 gallons of gasoline and 4 pounds of coffee 
C)  8 gallons of gasoline and 8 pounds of coffee 
D)  16 gallons of gasoline and 16 pounds of coffee

Question 5

The marginal rate of substitution is the rate at which a person is willing to substitute one good for another good while remaining on the same indifference curve.

Accepted Answer

A) True 
 B)False

Question 6

-In the figure above, which budget line has the lowest relative price of compact discs?

Accepted Answer

A)  AD 
B)  BD 
C)  CD 
D)  The relative price is equal for all three budget lines. 
A)  AD 
B)  BD 
C)  CD 
D)  The relative price is equal for all three budget lines.

Question 7

-The figure above shows Sam's budget line. Which of the following equals the vertical intercept of Sam's budget line?

Accepted Answer

A)  Y/Pc 
B)  Y/Pg 
C)  -(Pc/Pg) 
D)  -(Pg/Pc) 
A)  Y/Pc 
B)  Y/Pg 
C)  -(Pc/Pg) 
D)  -(Pg/Pc)

Question 8

-In the figure above, the MRS at point A is ________ the MRS at point B.

Accepted Answer

A)  equal to 
B)  less than 
C)  greater than 
D)  not able to be compared to 
A)  equal to 
B)  less than 
C)  greater than 
D)  not able to be compared to

Question 9

-In the figure above, Sam originally selects his consumption bundle at point A with 3 pounds of olives and 4 pounds of pickles a year. Then the price of pickles rises and the price of olives falls so that his budget line rotates but it still goes through point A. At point A, the slope of the indifference curve I1 ________ the slope of the new budget line.

Accepted Answer

A)  is steeper than 
B)  is flatter than 
C)  has the same slope as 
D)  could be steeper than, flatter than, or have the same slope as 
A)  is steeper than 
B)  is flatter than 
C)  has the same slope as 
D)  could be steeper than, flatter than, or have the same slope as

Question 10

-The figure above shows Sam's budget line. Sam's budget line shows

Accepted Answer

A)  which combinations of gasoline and coffee Sam can afford. 
B)  which combinations of gasoline and coffee Sam is planning to purchase. 
C)  whether or not Sam thinks gasoline and coffee are worth their prices. 
D)  whether or not Sam currently has enough gasoline and enough coffee. 
A)  which combinations of gasoline and coffee Sam can afford. 
B)  which combinations of gasoline and coffee Sam is planning to purchase. 
C)  whether or not Sam thinks gasoline and coffee are worth their prices. 
D)  whether or not Sam currently has enough gasoline and enough coffee.

Question 11

-Lizzie's preferences are shown in the figure above. Which of the following combinations of goods does Lizzie prefer the most?

Accepted Answer

A)  6 comic books and 20 cookies 
B)  8 comic books and 8 cookies 
C)  12 comic books and 10 cookies 
D)  4 comic books and 12 cookies 
A)  6 comic books and 20 cookies 
B)  8 comic books and 8 cookies 
C)  12 comic books and 10 cookies 
D)  4 comic books and 12 cookies

Question 12

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

Accepted Answer

The statement is incorrect. The principl

Question 13

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 $3 and the price of a gallon of gasoline is $3. At Samara's best affordable point, her marginal rate of substitution is ________ gallon of gasoline per music download.

Accepted Answer

A)  0.5 
B)  1 
C)  1.5 
D)  More information is needed to determine the marginal rate of substitution. 
A)  0.5 
B)  1 
C)  1.5 
D)  More information is needed to determine the marginal rate of substitution.

Question 14

-The figure above shows Tanya's consumption possibilities. Which of the following combinations of goods is not affordable?

Accepted Answer

A)  8 movie tickets and 3 restaurant meals. 
B)  12 movie tickets and 2 restaurant meals. 
C)  10 movie tickets and 3 restaurant meals. 
D)  6 movie tickets and 3 restaurant meals. 
A)  8 movie tickets and 3 restaurant meals. 
B)  12 movie tickets and 2 restaurant meals. 
C)  10 movie tickets and 3 restaurant meals. 
D)  6 movie tickets and 3 restaurant meals.

Question 15

-The indifference curve in the above figure

Accepted Answer

A)  could illustrate a person's preferences for identical computer disks made by two different companies. 
B)  could illustrate a person's preferences for right-handed and left-handed gloves. 
C)  has a constant marginal rate of substitution. 
D)  None of the above statements is correct. 
A)  could illustrate a person's preferences for identical computer disks made by two different companies. 
B)  could illustrate a person's preferences for right-handed and left-handed gloves. 
C)  has a constant marginal rate of substitution. 
D)  None of the above statements is correct.

Question 16

-In the figure above, which budget line has the lowest relative price of carrots?

Accepted Answer

A)  AD 
B)  BD 
C)  CD 
D)  The relative price is equal for all three budget lines. 
A)  AD 
B)  BD 
C)  CD 
D)  The relative price is equal for all three budget lines.

Question 17

In an indifference curve/budget line diagram, a consumer will select the combination of goods that is on the budget line and for which the

Accepted Answer

A)  marginal rate of substitution between two goods is equal to the relative price of the two goods. 
B)  marginal rate of substitution between two goods is greater than the relative price of the two goods. 
C)  slope of the indifference curve is less than the relative price of the two goods. 
D)  slope of the indifference curve is greater than the relative price of the two goods. 
A)  marginal rate of substitution between two goods is equal to the relative price of the two goods. 
B)  marginal rate of substitution between two goods is greater than the relative price of the two goods. 
C)  slope of the indifference curve is less than the relative price of the two goods. 
D)  slope of the indifference curve is greater than the relative price of the two goods.

Question 18

-The indifference curve in the above figure

Accepted Answer

A)  could illustrate a person's preferences for identical computer disks made by two different companies. 
B)  could illustrate a person's preferences for right-handed and left-handed gloves. 
C)  has a marginal rate of substitution that at first decreases and then increases. 
D)  None of the above statements is correct. 
A)  could illustrate a person's preferences for identical computer disks made by two different companies. 
B)  could illustrate a person's preferences for right-handed and left-handed gloves. 
C)  has a marginal rate of substitution that at first decreases and then increases. 
D)  None of the above statements is correct.

Question 19

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming ________ to consuming ________.

Accepted Answer

A)  1 comic book and 12 cookies; 4 comic books and 4 cookies 
B)  2 comic books and 12 cookies; 4 comic books and 8 cookies 
C)  4 comic books and 12 cookies; 2 comic books and 12 cookies 
D)  6 comic books and 12 cookies; 8 comic books and 16 cookies 
A)  1 comic book and 12 cookies; 4 comic books and 4 cookies 
B)  2 comic books and 12 cookies; 4 comic books and 8 cookies 
C)  4 comic books and 12 cookies; 2 comic books and 12 cookies 
D)  6 comic books and 12 cookies; 8 comic books and 16 cookies

Question 20

-Olivia's income is $216 a year and she spends all of it on music CDs and movies on DVDs. The price of a music CD is $18 and the price of a DVD is $18. The figure above illustrates Olivia's preferences.
a) What quantities of CDs and DVDs does Olivia buy? Explain your solution.
b) What is Olivia's marginal rate of substitution at the point at which she consumes? Explain.

Accepted Answer

@#IMG-DLM& a) Olivia chooses the quantities of CDs

If two consumption points are not on the same indifference curve, then one point is ________.

Lily is a college student who likes to buy only two goods: Cheetos and Pepsi. To determine Lily's budget line, you need to know I. Lily's preferences for Cheetos and Pepsi. II) The prices of Cheetos and Pepsi. III) Lily's income.

Suppose the price of chocolate chip cookies is $4.00 per pound and the price of a slice of cake is $2.00 per slice. The relative price of cookies in terms of cake is

-The figure above shows Sam's budget line. Which of the following combinations of gasoline and coffee are not available to Sam?

The marginal rate of substitution is the rate at which a person is willing to substitute one good for another good while remaining on the same indifference curve.

-In the figure above, which budget line has the lowest relative price of compact discs?

-The figure above shows Sam's budget line. Which of the following equals the vertical intercept of Sam's budget line?

-In the figure above, the MRS at point A is ________ the MRS at point B.

-The figure above shows Sam's budget line. Sam's budget line shows

-Lizzie's preferences are shown in the figure above. Which of the following combinations of goods does Lizzie prefer the most?

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

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 $3 and the price of a gallon of gasoline is $3. At Samara's best affordable point, her marginal rate of substitution is ________ gallon of gasoline per music download.

-The figure above shows Tanya's consumption possibilities. Which of the following combinations of goods is not affordable?

-The indifference curve in the above figure

-In the figure above, which budget line has the lowest relative price of carrots?

In an indifference curve/budget line diagram, a consumer will select the combination of goods that is on the budget line and for which the

-The indifference curve in the above figure

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming to consuming .

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

If two consumption points are not on the same indifference curve, then one point is ________.

Lily is a college student who likes to buy only two goods: Cheetos and Pepsi. To determine Lily's budget line, you need to know I. Lily's preferences for Cheetos and Pepsi. II) The prices of Cheetos and Pepsi. III) Lily's income.

Suppose the price of chocolate chip cookies is $4.00 per pound and the price of a slice of cake is $2.00 per slice. The relative price of cookies in terms of cake is

-The figure above shows Sam's budget line. Which of the following combinations of gasoline and coffee are not available to Sam?

The marginal rate of substitution is the rate at which a person is willing to substitute one good for another good while remaining on the same indifference curve.

-In the figure above, which budget line has the lowest relative price of compact discs?

-The figure above shows Sam's budget line. Which of the following equals the vertical intercept of Sam's budget line?

-In the figure above, the MRS at point A is ________ the MRS at point B.

-The figure above shows Sam's budget line. Sam's budget line shows

-Lizzie's preferences are shown in the figure above. Which of the following combinations of goods does Lizzie prefer the most?

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

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 $3 and the price of a gallon of gasoline is $3. At Samara's best affordable point, her marginal rate of substitution is ________ gallon of gasoline per music download.

-The figure above shows Tanya's consumption possibilities. Which of the following combinations of goods is not affordable?

-The indifference curve in the above figure

-In the figure above, which budget line has the lowest relative price of carrots?

In an indifference curve/budget line diagram, a consumer will select the combination of goods that is on the budget line and for which the

-The indifference curve in the above figure

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming ________ to consuming ________.

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

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming to consuming .