Question 1

The figure above shows three budget lines.
-Based on the figure above,which of the following would lead the consumer's budget line to shift from BL? to BL??

Accepted Answer

A)  a rise in the price of water 
B)  a fall in the price of water 
C)  a rise in the price of water and the price of gum 
D)  a decrease in the consumer's budget 
E)  an increase in the consumer's budget 
A)  a rise in the price of water 
B)  a fall in the price of water 
C)  a rise in the price of water and the price of gum 
D)  a decrease in the consumer's budget 
E)  an increase in the consumer's budget

Question 2

Is "utility" another word for the cost we give up when we consume a good?

Accepted Answer

No,utility does not mean the o

Question 3

The slope of the budget line represents an opportunity cost because,moving along the line,

Accepted Answer

A)  income is increasing. 
B)  income is decreasing. 
C)  additional income must be earned in order to purchase more of one good. 
D)  a consumer must give up some of one good in order to get more of the other. 
E)  it is possible to consume more of both goods. 
A)  income is increasing. 
B)  income is decreasing. 
C)  additional income must be earned in order to purchase more of one good. 
D)  a consumer must give up some of one good in order to get more of the other. 
E)  it is possible to consume more of both goods.

Question 4

At her best affordable point,Kris
i.is on her budget line.
ii.is on the highest attainable indifference curve.
iii.has a marginal rate of substitution equal to the relative price of the goods.

Accepted Answer

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

Question 5

If the budget line rotates inward and becomes steeper,there is a

Accepted Answer

A)  higher opportunity cost of the good measured on the x-axis. 
B)  lower opportunity cost of the good measured on the x-axis. 
C)  larger budget. 
D)  higher price for the good measured on the y-axis. 
E)  lower price for the good measured on the x-axis. 
A)  higher opportunity cost of the good measured on the x-axis. 
B)  lower opportunity cost of the good measured on the x-axis. 
C)  larger budget. 
D)  higher price for the good measured on the y-axis. 
E)  lower price for the good measured on the x-axis.

Question 6

-The figure above gives a consumer's budget line and two indifference curves.
a.At which point is the marginal rate of substitution greater than the relative price?
b.At which point is the marginal rate of substitution less than the relative price?
c.Which point represents the consumer equilibrium?

Accepted Answer

a.The marginal rate of substitution is g

Question 7

An indifference curve is a line that shows

Accepted Answer

A)  combinations of goods among which a consumer is indifferent. 
B)  different combinations of goods a consumer is able to buy. 
C)  the indifference of consumers for the budget constraint. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct. 
A)  combinations of goods among which a consumer is indifferent. 
B)  different combinations of goods a consumer is able to buy. 
C)  the indifference of consumers for the budget constraint. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct.

Question 8

Which of the following is true if Clarice is at her consumer equilibrium?
i.Clarice is on her budget line.
ii.Clarice is on her highest attainable indifference curve.
iii.Clarice is dividing her budget equally across all goods.

Accepted Answer

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

Question 9

On a budget line,sub sandwiches are measured on the x-axis and sodas are measured on the y-axis.The price of a sub is $5 and the price of a soda is $1.If the price of a sub decreases to $4,the relative price of ________.

Accepted Answer

A)  sub sandwiches falls and the budget line becomes less steep 
B)  sub sandwiches rises and the budget line becomes flatter 
C)  sodas falls and the budget line becomes flatter 
D)  both sub sandwiches and soda falls and the budget line shifts outward 
E)  sodas does not change and neither does the budget line 
A)  sub sandwiches falls and the budget line becomes less steep 
B)  sub sandwiches rises and the budget line becomes flatter 
C)  sodas falls and the budget line becomes flatter 
D)  both sub sandwiches and soda falls and the budget line shifts outward 
E)  sodas does not change and neither does the budget line

Question 10

Diminishing marginal utility means that an increase in the consumption of a good leads to

Accepted Answer

A)  a decrease in total utility. 
B)  a decrease in marginal utility. 
C)  a decrease in the fall of the price of the good. 
D)  a decrease in the consumer's budget. 
E)  an increase in the consumer's budget. 
A)  a decrease in total utility. 
B)  a decrease in marginal utility. 
C)  a decrease in the fall of the price of the good. 
D)  a decrease in the consumer's budget. 
E)  an increase in the consumer's budget.

Question 11

What does the term "indifferent" mean and what is its relationship to an indifference curve?

Accepted Answer

Indifferent means that the consumer does

Question 12

-The table above gives the utility Andy receives from different quantities of vanilla ice cream cones.Complete the table.

Accepted Answer

@#IMG-DLM& The compl

Question 13

In an indifference curve/budget line diagram,at the consumer equilibrium the slope of the budget line

Accepted Answer

A)  equals the slope of the indifference curve. 
B)  is greater than the slope of the indifference curve. 
C)  is less than the slope of the indifference curve. 
D)  may be greater than, equal to, or less than the slope of the indifference curve. 
E)  has nothing to do with the equilibrium. 
A)  equals the slope of the indifference curve. 
B)  is greater than the slope of the indifference curve. 
C)  is less than the slope of the indifference curve. 
D)  may be greater than, equal to, or less than the slope of the indifference curve. 
E)  has nothing to do with the equilibrium.

Question 14

An increase in a consumer's budget

Accepted Answer

A)  shifts the budget line outward and does not change its slope. 
B)  shifts the budget line inward and does not change its slope. 
C)  rotates the budget line outward around the point where it intersects the x-axis. 
D)  rotates the budget line inward around the point where it intersects the x-axis. 
E)  rotates the budget line outward around the point where it intersects the y-axis. 
A)  shifts the budget line outward and does not change its slope. 
B)  shifts the budget line inward and does not change its slope. 
C)  rotates the budget line outward around the point where it intersects the x-axis. 
D)  rotates the budget line inward around the point where it intersects the x-axis. 
E)  rotates the budget line outward around the point where it intersects the y-axis.

Question 15

-Liz consumes two goods,candy bars and potato chips.Her budget is $4 per day.The price of a candy bar is $1.00 and the price of a bag of chips is 50 cents.Her utility is in the table above.How much marginal utility per dollar does the 3rd bag of potato chips give Liz?

Accepted Answer

A)  18 
B)  4 
C)  8 
D)  36 
E)  We need more information to be able to answer the question. 
A)  18 
B)  4 
C)  8 
D)  36 
E)  We need more information to be able to answer the question.

Question 16

Why is the budget line negatively sloped?

Accepted Answer

Given the consumer's budget and the pric

Question 17

-The table above gives Matt's utility from consuming slices of pizza.As Matt consumes more slices of pizza,he

Accepted Answer

A)  obtains greater amounts of marginal utility. 
B)  obtains less total utility. 
C)  has diminishing marginal utility. 
D)  has diminishing total utility. 
E)  has unchanging marginal utility. 
A)  obtains greater amounts of marginal utility. 
B)  obtains less total utility. 
C)  has diminishing marginal utility. 
D)  has diminishing total utility. 
E)  has unchanging marginal utility.

Question 18

Joe has $100 a week to purchase either computer online service or film for his other hobby,photography.The price of on-line service is $5 an hour while the price of film is $10 a roll.Draw Joe's budget line in the figure below.

Accepted Answer

@#IMG-DLM& Joe's budget line i

Question 19

John likes to spend Thursday nights playing pool and drinking soda.John's budget for Thursday nights is $10,a soda costs $2,and one game of pool costs $1.
a.Draw a graph of John's budget line in the figure below.
b.In your graph,label the affordable and unaffordable areas.

Accepted Answer

@#IMG-DLM& 
a.The budget line is in the

Question 20

The figure above shows one of a consumer's indifference curves.
-The marginal rate of substitution (MRS)at point C equals

Accepted Answer

A)  4. 
B)  8. 
C)  2. 
D)  1/2. 
E)  More information is needed to calculate the MRS. 
A)  4. 
B)  8. 
C)  2. 
D)  1/2. 
E)  More information is needed to calculate the MRS.

The figure above shows three budget lines. -Based on the figure above,which of the following would lead the consumer's budget line to shift from BL? to BL??

Is "utility" another word for the cost we give up when we consume a good?

The slope of the budget line represents an opportunity cost because,moving along the line,

At her best affordable point,Kris i.is on her budget line. ii.is on the highest attainable indifference curve. iii.has a marginal rate of substitution equal to the relative price of the goods.

If the budget line rotates inward and becomes steeper,there is a

-The figure above gives a consumer's budget line and two indifference curves. a.At which point is the marginal rate of substitution greater than the relative price? b.At which point is the marginal rate of substitution less than the relative price? c.Which point represents the consumer equilibrium?

An indifference curve is a line that shows

Which of the following is true if Clarice is at her consumer equilibrium? i.Clarice is on her budget line. ii.Clarice is on her highest attainable indifference curve. iii.Clarice is dividing her budget equally across all goods.

On a budget line,sub sandwiches are measured on the x-axis and sodas are measured on the y-axis.The price of a sub is $5 and the price of a soda is $1.If the price of a sub decreases to $4,the relative price of ________.

Diminishing marginal utility means that an increase in the consumption of a good leads to

What does the term "indifferent" mean and what is its relationship to an indifference curve?

-The table above gives the utility Andy receives from different quantities of vanilla ice cream cones.Complete the table.

In an indifference curve/budget line diagram,at the consumer equilibrium the slope of the budget line

An increase in a consumer's budget

-Liz consumes two goods,candy bars and potato chips.Her budget is $4 per day.The price of a candy bar is $1.00 and the price of a bag of chips is 50 cents.Her utility is in the table above.How much marginal utility per dollar does the 3rd bag of potato chips give Liz?

Why is the budget line negatively sloped?

-The table above gives Matt's utility from consuming slices of pizza.As Matt consumes more slices of pizza,he

Joe has $100 a week to purchase either computer online service or film for his other hobby,photography.The price of on-line service is $5 an hour while the price of film is $10 a roll.Draw Joe's budget line in the figure below.

John likes to spend Thursday nights playing pool and drinking soda.John's budget for Thursday nights is $10,a soda costs $2,and one game of pool costs $1. a.Draw a graph of John's budget line in the figure below. b.In your graph,label the affordable and unaffordable areas.

The figure above shows one of a consumer's indifference curves. -The marginal rate of substitution (MRS)at point C equals

Getting Started

The U.S.and 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

The figure above shows three budget lines. -Based on the figure above,which of the following would lead the consumer's budget line to shift from BL? to BL??

Is "utility" another word for the cost we give up when we consume a good?

The slope of the budget line represents an opportunity cost because,moving along the line,

At her best affordable point,Kris i.is on her budget line. ii.is on the highest attainable indifference curve. iii.has a marginal rate of substitution equal to the relative price of the goods.

If the budget line rotates inward and becomes steeper,there is a

-The figure above gives a consumer's budget line and two indifference curves. a.At which point is the marginal rate of substitution greater than the relative price? b.At which point is the marginal rate of substitution less than the relative price? c.Which point represents the consumer equilibrium?

An indifference curve is a line that shows

Which of the following is true if Clarice is at her consumer equilibrium? i.Clarice is on her budget line. ii.Clarice is on her highest attainable indifference curve. iii.Clarice is dividing her budget equally across all goods.

On a budget line,sub sandwiches are measured on the x-axis and sodas are measured on the y-axis.The price of a sub is $5 and the price of a soda is $1.If the price of a sub decreases to $4,the relative price of ________.

Diminishing marginal utility means that an increase in the consumption of a good leads to

What does the term "indifferent" mean and what is its relationship to an indifference curve?

-The table above gives the utility Andy receives from different quantities of vanilla ice cream cones.Complete the table.

In an indifference curve/budget line diagram,at the consumer equilibrium the slope of the budget line

An increase in a consumer's budget

-Liz consumes two goods,candy bars and potato chips.Her budget is $4 per day.The price of a candy bar is $1.00 and the price of a bag of chips is 50 cents.Her utility is in the table above.How much marginal utility per dollar does the 3rd bag of potato chips give Liz?

Why is the budget line negatively sloped?

-The table above gives Matt's utility from consuming slices of pizza.As Matt consumes more slices of pizza,he

Joe has $100 a week to purchase either computer online service or film for his other hobby,photography.The price of on-line service is $5 an hour while the price of film is $10 a roll.Draw Joe's budget line in the figure below.

John likes to spend Thursday nights playing pool and drinking soda.John's budget for Thursday nights is $10,a soda costs $2,and one game of pool costs $1. a.Draw a graph of John's budget line in the figure below. b.In your graph,label the affordable and unaffordable areas.

The figure above shows one of a consumer's indifference curves. -The marginal rate of substitution (MRS)at point C equals

Getting Started

The U.S.and 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