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Microeconomics , 8e (Pindyck/Rubinfeld) Chapter 4 Individual and Market Demand 4.1 Individual Demand 1) As we move downward along a demand curve for apples, A) consumer well-being decreases. B) the marginal utility of apples decreases. C) the marginal utility of apples increases. D) Both A and B are true. E) Both A and C are true. Answer: B Diff: 1 Section: 4.1 2) The change in the price of one good has no effect on the quantity demanded of another good. These goods are: A) complements. B) substitutes. C) both inferior. D) both Giffen goods. E) none of the above Answer: E Diff: 1 Section: 4.1 3) The price of good A goes up. As a result the demand for good B shifts to the left. From this we can infer that: A) good A is a normal good. B) good B is an inferior good. C) goods A and B are substitutes. D) goods A and B are complements. E) none of the above Answer: D Diff: 1 Section: 4.1 4) An individual demand curve can be derived from the ________ curve. A) price-consumption B) price-income C) income-substitution D) income-consumption E) Engel Answer: A Diff: 1 Section: 4.1 1 Copyright 2013 Pearson Education, Inc. 5) Which of the following claims is true at each point along a price-consumption curve? A) Utility is maximized but income is not all spent. B) All income is spent, but utility is not maximized. C) Utility is maximized, and all income is spent. D) The level of utility is constant. Answer: C Diff: 1 Section: 4.1 6) Which of the following is true regarding income along a price-consumption curve? A) Income is increasing. B) Income is decreasing. C) Income is constant. D) The level of income depends on the level of utility. Answer: C Diff: 2 Section: 4.1 7) Which of the following is true regarding utility along a price-consumption curve? A) It is constant. B) It changes from point to point. C) It changes only if income changes. D) It changes only for normal goods. Answer: B Diff: 2 Section: 4.1 8) The income-consumption curve A) illustrates the combinations of incomes needed with various levels of consumption of a good. B) is another name for income-demand curve. C) illustrates the utility-maximizing combinations of goods associated with every income level. D) shows the utility-maximizing quantity of some good (on the horizontal axis) as a function of income (on the vertical axis). Answer: C Diff: 1 Section: 4.1 9) Which of the following pairs of goods are NOT complements? A) Hockey sticks and hockey pucks B) Computer CPUs and computer monitors C) On-campus student housing and off-campus rental apartments D) all of the above E) none of the above Answer: C Diff: 1 Section: 4.1 2 Copyright 2013 Pearson Education, Inc. 10) Which of the following goods has a low, but positive, income elasticity of demand? ... View Full Document

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