Exam 9: Possibilities, Preferences, and Choices

The price of one good divided by the price of another good is a

Why does your marginal rate of substitution between chocolate and vanilla ice cream decline continuously as you move rightward on your indifference curve between the two?

-Consider the budget line in the above figure. If the consumer's income is $120, then the price of a movie is

What is an indifference curve?

-The above figure shows Sam's budget line and one of his indifference curves. What combination of coffee and gasoline will Sam select?

Nick consumes two goods, chips and lemonade. Located on the x-axis is the quantity of chips and on the y-axis is the quantity of lemonade. The magnitude of the slope of the budget line equals the

On a big weekend of college football in 2010, the Associated Press found fans… who said they are making concessions yet determined to indulge their passion. "We basically let the wife and children not eat for a week so we can do this," joked Neil Plotkin, who was attending his first Penn State game. If Neil's marginal rate of substitution between weeks of food and his first Penn State game is 1, what do you predict the marginal rate of substitution between food and subsequent Penn State games is for Neil?

If the indifference curves between two goods are L-shaped, the goods are

-Consider the budget line in the above figure. If the consumer's income is $120, then the price of a book is

-In the figure above, as more six-packs of soda are consumed, moving along any of the illustrated indifference curves, the MRS between twelve-packs of soda and six-packs of soda

-The above figure gives your budget line between CDs and magazines. Which of the following changes would NOT allow you to buy more CDs?

The assumption that the magnitude of the slope of an indifference curve decreases moving to the right along the indifference curve is known as the assumption of

You are studying with a friend and your friend says "A budget line shows the various combinations of two goods that can be purchased with the buyer's income at current prices." Is your friend's assessment correct or not?

Janelle spends all of her income on songs from iTunes ($1 each) and applications ($5 each) for her iTouch. If she makes her best affordable choice, she purchases 20 songs and 4 applications, what is her income?

The above figure shows your budget line and indifference curves. What quantities of gasoline and movie rentals would you choose?

-The figure above gives your budget line for magazine and CDs per month. Given that your income equals $60 per month, what is your real income in terms of CDs?

A budget line shows the

According to the substitution effect along an indifference curve, when the relative price of a good falls, the consumer ________ substitutes ________ of that good for the other good.

Left shoes and right shoes are perfect complements. An indifference curve for left and right shoes is a line with

-Suppose the quantity of sodas and the quantity of popcorn are on an indifference curve/budget line diagram. An increase in income shifts the budget line ________ and, if popcorn is a normal good, shifts the demand curve for popcorn ________.