Filters
Question type
Study Flashcards

Indifference curves cannot ever be concave for two goods.

A) True
B) False

Correct Answer

verifed

verified

-Max has allocated $100 toward meats for his barbecue.His budget line and indifference map are shown in the above figure.If the price of burger increases,which of the following bundles are in Max's opportunity set? A) b, d, e B) d, e C) a, b, c, d, e D) None of the labeled points are in Max's opportunity set. -Max has allocated $100 toward meats for his barbecue.His budget line and indifference map are shown in the above figure.If the price of burger increases,which of the following bundles are in Max's opportunity set?


A) b, d, e
B) d, e
C) a, b, c, d, e
D) None of the labeled points are in Max's opportunity set.

E) A) and B)
F) B) and C)

Correct Answer

verifed

verified

-Max has allocated $100 toward meats for his barbecue.His budget line and indifference map are shown in the above figure.If Max is currently at point e, A) the absolute value of his MRS is less than the trade-off offered by the market. B) he is willing to give up more burger than he has to, given market prices. C) he is not maximizing his utility. D) All of the above. -Max has allocated $100 toward meats for his barbecue.His budget line and indifference map are shown in the above figure.If Max is currently at point e,


A) the absolute value of his MRS is less than the trade-off offered by the market.
B) he is willing to give up more burger than he has to, given market prices.
C) he is not maximizing his utility.
D) All of the above.

E) A) and B)
F) B) and C)

Correct Answer

verifed

verified

An optimal choice in which a consumer does not consume all types of goods


A) is a corner solution.
B) cannot be an equilibrium.
C) cannot exhaust the budget constraint.
D) is an interior solution.

E) A) and B)
F) B) and D)

Correct Answer

verifed

verified

Economists use a preference map to illustrate that


A) more is better than less.
B) preferences are transitive.
C) preferences are complete.
D) All of the above.

E) None of the above
F) All of the above

Correct Answer

verifed

verified

A consumer's willingness to trade one good for another can be expressed by the consumer's


A) indifference curve.
B) marginal rate of substitution.
C) Both A and B above.
D) None of the above.

E) B) and C)
F) None of the above

Correct Answer

verifed

verified

Indifference curves for perfect substitutes must be parallel lines with a slope of negative one.

A) True
B) False

Correct Answer

verifed

verified

Researchers have found that tax increases may have a small effect in the quantity purchased because


A) individuals might forget about the tax (salience) .
B) individuals are rational.
C) individuals are credit constrained.
D) individuals do not care about prices.

E) All of the above
F) A) and B)

Correct Answer

verifed

verified

By selecting a bundle where MRS = MRT,the consumer is


A) achieving a corner solution.
B) reaching the highest possible indifference curve she can afford.
C) not behaving in an optimal way.
D) All of the above.

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

Johnny has $100 to spend on books and all other goods.Books cost $20 each and Johnny is at equilibrium consuming 3 books and $40 worth of other goods.Johnny's grandmom wants to give Johnny either a book or $20 for his birthday.Which gift does Johnny prefer? Explain using an indifference map and budget lines.

Correct Answer

verifed

verified

blured image See the above figure.Since Johnny's equ...

View Answer

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.If the price of burger increases, A) Max will buy less burger and more chicken. B) Max will buy less burger and the same quantity of chicken. C) Max will buy less of both meats. D) More information is needed to answer the question. -Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.If the price of burger increases,


A) Max will buy less burger and more chicken.
B) Max will buy less burger and the same quantity of chicken.
C) Max will buy less of both meats.
D) More information is needed to answer the question.

E) B) and D)
F) C) and D)

Correct Answer

verifed

verified

By selecting a bundle where MRS = MRT,the consumer is saying


A) "I value my last unit of each good equally."
B) "I am willing to trade one good for the other at the same rate that I am required to do so."
C) "I will equate the amounts spent on all goods consumed."
D) All of the above.

E) None of the above
F) A) and C)

Correct Answer

verifed

verified

If the utility for two goods "x" and "y" is measured as U = x + y,then it can be concluded that


A) "x" and "y" are perfect substitutes.
B) "x" and "y" are perfect complements.
C) "x" and "y" are both bads.
D) the indifference curves on the x,y graph will be upward sloping.

E) None of the above
F) A) and B)

Correct Answer

verifed

verified

Joe subscribes to an Internet provider that charges $2 per hour.Draw his budget line for Internet access on the horizontal axis and money spent on all other goods on the vertical axis assuming he has $100 per month to spend.Another company offers unlimited Internet access for a flat monthly fee of $20.Draw this budget line.

Correct Answer

verifed

verified

blured image See the a...

View Answer

Joe's income is $500,the price of food (F) is $2 per unit,and the price of shelter (S) is $100.Which of the following represents his marginal rate of transformation of food for shelter?


A) -5
B) -50
C) -.02
D) None of the above.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Explain the difference between the marginal rate of substitution and the marginal rate of transformation.

Correct Answer

verifed

verified

The marginal rate of substitution is a c...

View Answer

If two goods,"x" and "y",are perfect substitutes,then which of the following best represents the utility function for the two goods?


A) U = x + y
B) U = x ∗ y
C) U = If two goods, x and y ,are perfect substitutes,then which of the following best represents the utility function for the two goods? A) U = x + y B) U = x ∗ y C) U = + D) Any of the above. + If two goods, x and y ,are perfect substitutes,then which of the following best represents the utility function for the two goods? A) U = x + y B) U = x ∗ y C) U = + D) Any of the above.
D) Any of the above.

E) A) and C)
F) B) and C)

Correct Answer

verifed

verified

-Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.What happens if Max's mother gives him 30 pounds of burger? A) Max would have preferred receiving the dollar value of the burger. B) Max is indifferent between this gift and the dollar value of the burger. C) Max prefers this gift to the dollar value of the burger. D) None of the above. -Max has allocated $100 toward meats for his barbecue.His budget line and an indifference map are shown in the above figure.What happens if Max's mother gives him 30 pounds of burger?


A) Max would have preferred receiving the dollar value of the burger.
B) Max is indifferent between this gift and the dollar value of the burger.
C) Max prefers this gift to the dollar value of the burger.
D) None of the above.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

If the utility function (U) between bananas (B) and jam (J) can be represented as U = 3ln(B) +4ln(J) the marginal utility of jam equals


A) 4B.
B) 3B/J.
C) 4/J.
D) B/J.

E) B) and C)
F) None of the above

Correct Answer

verifed

verified

Bounded rationality suggests that


A) individuals might make "incorrect" decisions because they are unable to consider all possible options.
B) individuals would rather have less choice to more choice.
C) rational decisions can only be made when choices are restricted.
D) individuals are happier when their choices are restricted or "bounded."

E) All of the above
F) A) and D)

Correct Answer

verifed

verified

Showing 81 - 100 of 125

Related Exams

Exam 1

Introduction

60 Questions

Exam 2

Supply and Demand

151 Questions

Exam 3

Applying the Supply-And-Demand Model

124 Questions

Exam 5

Applying Consumer Theory

118 Questions

Exam 6

Firms and Production

128 Questions

Exam 7

Costs

124 Questions

Exam 8

Competitive Firms and Markets

127 Questions

Exam 9

Applying the Competitive Model

156 Questions

Exam 10

General Equilibrium and Economic Welfare

122 Questions

Exam 11

Monopoly

147 Questions

Exam 12

Pricing and Advertising

135 Questions

Exam 13

Oligopoly and Monopolistic Competition

128 Questions

Exam 14

Game Theory

109 Questions

Exam 15

Factor Markets

103 Questions

Exam 16

Interest Rates, Investments, and Capital Markets

120 Questions

Exam 17

Uncertainty

122 Questions

Exam 18

Externalities, Open-Access, and Public Goods

123 Questions

Exam 19

Asymmetric Information

119 Questions

Exam 20

Contracts and Moral Hazards

107 Questions

Show Answer