Question 1

Figure 21-14   
-Refer to Figure 21-14. Which of the following statements is correct?

Accepted Answer

A)  The indifference curves represented in graph a are perfect complements.
B)  The indifference curves represented in graph b are perfect substitutes.
C)  The indifference curves represented in graph c are neither perfect substitutes not perfect complements.
D)  All of the above are correct.E) A) and D)
F) C) and D)

Question 2

Jerry consumes two goods, hamburgers and ice cream sandwiches. He has maximized his utility given his income. Ice cream sandwiches costs $2, and he consumes them to the point where the marginal utility he receives is 6. Hamburgers cost $4, and the relationship between the marginal utility that Jerry gets from eating hamburgers and the number he eats per month is as follows:  How many hamburgers does Jerry buy each month?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) A) and C)
F) B) and C)

Question 3

A consumer likes two goods: books and movies. The three bundles shown in the table below lie on the same indifference curve for the consumer.

Which of the following properties of indifference curves would this consumer's preferences violate?

Accepted Answer

A)  Indifference curves are downward sloping.
B)  Indifference curves do not cross.
C)  Indifference curves are bowed inward.
D)  These bundles do not violate any of the properties of indifference curves.E) A) and B)
F) B) and C)

Question 4

The rate at which a consumer is willing to trade off one good for another is called the __________.

Accepted Answer

marginal r...

Question 5

Suppose the only two goods that Charlie consumes are wine and cheese. When wine sells for $10 a bottle and cheese sell for $10 a pound, he buys 6 bottles of wine and 4 pounds of cheese - spending his entire income of $100. One day the price of wine falls to $5 a bottle and the price of cheese increases to $20 a pound, while his income does not change. The bundle of wine and cheese that he purchased at the old prices now costs

Accepted Answer

A)  the same amount at the new prices.
B)  less than Charlie's income at the new prices.
C)  more than Charlie's income at the new prices.
D)  We do not have enough information to answer the question.E) A) and B)
F) All of the above

Question 6

The rate at which a consumer is willing to exchange one good for another while maintaining a constant level of satisfaction is called the

Accepted Answer

A)  relative expenditure ratio.
B)  value of marginal product.
C)  marginal rate of substitution.
D)  relative price ratio.E) All of the above
F) B) and C)

Question 7

Indifference curves graphically represent

Accepted Answer

A)  an income level sufficient to allow an individual to achieve a given level of satisfaction.
B)  the constraints faced by individuals.
C)  an individual's preferences.
D)  the relative price of commodities.E) A) and B)
F) A) and C)

Question 8

A consumer chooses an optimal consumption point where the

Accepted Answer

A)  marginal rate of substitution is maximized.
B)  rate at which the consumer is willing to trade one good for another equals the price ratio.
C)  price ratio is minimized.
D)  All of the above are correct.E) None of the above
F) All of the above

Question 9

Figure 21-25 The figure pertains to a particular consumer. On the axes, X represents the quantity of good X and Y represents the quantity of good Y. 
-Refer to Figure 21-25. The four curves that are drawn on the figure are

Accepted Answer

A)  indifference curves.
B)  budget constraints.
C)  demand curves.
D)  income curves.E) A) and B)
F) B) and C)

Question 10

Figure 21-5
(a) 
(b)  x/Py) ? A) 1/3 B) 1 C) 3 D) 10" class="answers-bank-image d-inline" rel="preload" > x/Py) ? A) 1/3 B) 1 C) 3 D) 10" class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 21-5. In graph (b) , what is the price of good X relative to the price of good Y (i.e., Px/Py) ?

Accepted Answer

A)  1/3
B)  1
C)  3
D)  10E) C) and D)
F) All of the above

Exam 21: The Theory of Consumer Choice

A consumer likes two goods: books and movies. The three bundles shown in the table below lie on the same indifference curve for the consumer. Which of the following properties of indifference curves would this consumer's preferences violate?

Correct Answer
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Correct Answer
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Figure 21-5 (a) (b) -Refer to Figure 21-5. In graph (b) , what is the price of good X relative to the price of good Y (i.e., P_x/P_y) ?

Correct Answer
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Figure 21-25 The figure pertains to a particular consumer. On the axes, X represents the quantity of good X and Y represents the quantity of good Y. -Refer to Figure 21-25. The four curves that are drawn on the figure are

Correct Answer
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A consumer chooses an optimal consumption point where the

Correct Answer
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Figure 21-14 -Refer to Figure 21-14. Which of the following statements is correct?

Correct Answer
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The rate at which a consumer is willing to exchange one good for another while maintaining a constant level of satisfaction is called the

Correct Answer
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The rate at which a consumer is willing to trade off one good for another is called the __________.

Correct Answer
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marginal r...
View Answer

Correct Answer
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Indifference curves graphically represent

Correct Answer
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Exam 21: The Theory of Consumer Choice

A consumer likes two goods: books and movies. The three bundles shown in the table below lie on the same indifference curve for the consumer. Which of the following properties of indifference curves would this consumer's preferences violate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 21-5 (a) (b) -Refer to Figure 21-5. In graph (b) , what is the price of good X relative to the price of good Y (i.e., Px/Py) ?

Correct AnswerverifiedShow Answer

Figure 21-25 The figure pertains to a particular consumer. On the axes, X represents the quantity of good X and Y represents the quantity of good Y. -Refer to Figure 21-25. The four curves that are drawn on the figure are

Correct AnswerverifiedShow Answer

A consumer chooses an optimal consumption point where the

Correct AnswerverifiedShow Answer

Figure 21-14 -Refer to Figure 21-14. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The rate at which a consumer is willing to exchange one good for another while maintaining a constant level of satisfaction is called the

Correct AnswerverifiedShow Answer

The rate at which a consumer is willing to trade off one good for another is called the __________.

Correct Answerverifiedmarginal r...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Indifference curves graphically represent

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Figure 21-5 (a) (b) -Refer to Figure 21-5. In graph (b) , what is the price of good X relative to the price of good Y (i.e., P_x/P_y) ?

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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marginal r...
View Answer

Correct Answer
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Correct Answer
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