Question 1

​Suppose Alyssa likes oranges twice as much as apples, no matter how many apples or oranges she has. Her indifference curves for oranges and apples

Accepted Answer

A)  ​are right angles.
B)  ​are straight lines.
C)  ​slope upward.
D)  ​cross one another at certain points.E) A) and B)
F) All of the above

Question 2

Figure 21-7 
-Refer to Figure 21-7. Suppose a consumer has $500 in income, the price of a book is $10, and the value of B is 50. What is the price of a DVD?

Accepted Answer

A)  $5
B)  $10
C)  $50
D)  $100E) A) and C)
F) None of the above

Question 3

A budget constraint illustrates the

Accepted Answer

A)  prices that a consumer chooses to pay for products he consumes.
B)  purchases made by consumers.
C)  consumption bundles that a consumer can afford.
D)  consumption bundles that give a consumer equal satisfaction.E) All of the above
F) A) and B)

Question 4

Figure 21-18 2 if A) the price of Y decreases. B) the price of X decreases. C) income increases. D) All of the above would be correct." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 21-18. It would be possible for the consumer to reach I2 if

Accepted Answer

A)  the price of Y decreases.
B)  the price of X decreases.
C)  income increases.
D)  All of the above would be correct.E) B) and C)
F) A) and B)

Question 5

Pepsi and pizza are normal goods. When the price of pizza falls, the substitution effect by itself will cause a

Accepted Answer

A)  shift to a lower indifference curve so that the consumer buys less Pepsi.
B)  shift to a higher indifference curve so that the consumer buys more Pepsi.
C)  movement along the indifference curve so that the consumer buys more Pepsi.
D)  movement along the indifference curve so that the consumer buys less Pepsi.E) A) and B)
F) A) and C)

Question 6

The goal of the consumer is to

Accepted Answer

A)  maximize utility.
B)  minimize expenses.
C)  spend more income in the current time period than in the future.
D)  All of the above are the goals of the consumer.E) None of the above
F) C) and D)

Question 7

Giffen goods have positively-sloped demand curves because they are

Accepted Answer

A)  inferior goods with no substitution effect.
B)  normal goods with no substitution effect.
C)  inferior goods for which the substitution effect outweighs the income effect.
D)  inferior goods for which the income effect outweighs the substitution effect.E) A) and D)
F) All of the above

Question 8

Suppose a consumer is currently spending all of her available income on two goods: music CDs and DVDs. If the price of a CD is $9, the price of a DVD is $18, and she is currently consuming 10 CDs and 5 DVDs, what is the consumer's income?

Accepted Answer

A)  $90
B)  $180
C)  $270
D)  $360E) A) and B)
F) All of the above

Exam 21: The Theory of Consumer Choice

Suppose Alyssa likes oranges twice as much as apples, no matter how many apples or oranges she has. Her indifference curves for oranges and apples

Correct Answer
verified

Figure 21-7 -Refer to Figure 21-7. Suppose a consumer has $500 in income, the price of a book is $10, and the value of B is 50. What is the price of a DVD?

Correct Answer
verified

Pepsi and pizza are normal goods. When the price of pizza falls, the substitution effect by itself will cause a

Correct Answer
verified

Giffen goods have positively-sloped demand curves because they are

Correct Answer
verified

Suppose a consumer is currently spending all of her available income on two goods: music CDs and DVDs. If the price of a CD is $9, the price of a DVD is $18, and she is currently consuming 10 CDs and 5 DVDs, what is the consumer's income?

Correct Answer
verified

Figure 21-18 -Refer to Figure 21-18. It would be possible for the consumer to reach I₂ if

Correct Answer
verified

The goal of the consumer is to

Correct Answer
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A budget constraint illustrates the

Correct Answer
verified

Exam 21: The Theory of Consumer Choice

​Suppose Alyssa likes oranges twice as much as apples, no matter how many apples or oranges she has. Her indifference curves for oranges and apples

Correct AnswerverifiedShow Answer

Figure 21-7 -Refer to Figure 21-7. Suppose a consumer has $500 in income, the price of a book is $10, and the value of B is 50. What is the price of a DVD?

Correct AnswerverifiedShow Answer

Pepsi and pizza are normal goods. When the price of pizza falls, the substitution effect by itself will cause a

Correct AnswerverifiedShow Answer

Giffen goods have positively-sloped demand curves because they are

Correct AnswerverifiedShow Answer

Suppose a consumer is currently spending all of her available income on two goods: music CDs and DVDs. If the price of a CD is $9, the price of a DVD is $18, and she is currently consuming 10 CDs and 5 DVDs, what is the consumer's income?

Correct AnswerverifiedShow Answer

Figure 21-18 -Refer to Figure 21-18. It would be possible for the consumer to reach I2 if

Correct AnswerverifiedShow Answer

The goal of the consumer is to

Correct AnswerverifiedShow Answer

A budget constraint illustrates the

Correct AnswerverifiedShow Answer

Suppose Alyssa likes oranges twice as much as apples, no matter how many apples or oranges she has. Her indifference curves for oranges and apples

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Figure 21-18 -Refer to Figure 21-18. It would be possible for the consumer to reach I₂ if

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified