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CHAPTER 3 Consumer Behavior MULTIPLE CHOICE Section 3.1 easy 1. Gary Franklin is a movie critic. He invented the Franklin Scale with which he rates movies from 1 to 10 (10 being best). When asked about his scale, Mr. Franklin explained "that it is a subjective measure of movie quality. A movie with a ranking of 10 is not necessarily 10 times better than a movie with a ranking of 1, but it is better. A movie with a ranking of 5 is better than a movie with a ranking of 1, but is not as good a movie with a ranking of 10. That's all it really tells you." Based on Mr. Franklin's description, his scale is: a. ordinal but not cardinal. b. cardinal but not ordinal. c. an objective standard to judge movies. d. neither cardinal nor ordinal. easy 2. Which of the following is NOT an assumption regarding people's preferences in the theory of consumer behavior? a. preferences are complete. b. preferences are transitive. c. consumers prefer more of a good to less. d. none of the above. easy 3. The theory of consumer behavior is based on certain assumptions. It includes at least the assumption(s) that preferences are: a. complete. b. transitive. c. intransitive. d. both (a) and (b) are correct. e. both (a) and (c) are correct. easy 4. The assumption of transitive preferences implies that indifference curves must: a. not cross one another. b. have a positive slope. c. be L-shaped. d. be convex to the origin. e. all of the above. easy 5. If a market basket is changed by adding more of at least one good, then rational consumers will: a. rank the market basket more highly after the change. b. more likely prefer a different market basket. c. rank the market basket as being just as desirable as before. d. be unable to decide whether the first market basket is preferred to the second or vice versa.... View Full Document

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