MT2Spring2008Practice

- Exam Name MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1 Ted has $600 a week to spend on

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Ted has $600 a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. The pairs of clothing and food that are in the Ted ʹ s choice set include ________ units of clothing and ________ units of food. A) 20; 50 B) 0; 200 C) 10; 125 D) 10; 60 1) Refer to the information provided in Figure 6.1 below to answer the questions that follow. Figure 6.1 2) Refer to Figure 6.1. Assume Tom is on budget constraint AC . If the price of a hamburger is $5, Tom ʹ s monthly income is A) $20. B) $60. C) $100. D) $300. 2) 3) Refer to Figure 6.1. Along budget constraint AC , the opportunity cost of one hamburger A) is 2 hot dogs. B) is 1/4 of a hot dog. C) is 1/2 of a hot dog. D) changes as you move down the budget constraint. 3) 1
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Refer to the information provided in Figure 6.2 below to answer the questions that follow. Figure 6.2 4) Refer to Figure 6.2. Mr. Lingle ʹ s budget constraint is AC . His choice set is all points A) along the vertical and horizontal axes. B) to the right of budget constraint AC . C) in the area bounded by OAC .D ) along budget constraint AC . 4) Refer to the information provided in Figure 6.4 below to answer the questions that follow. Figure 6.4 5) Refer to Figure 6.4. Bill ʹ s budget constraint is AC . If the price of black beans decreases, Bill ʹ s budget constraint will be A) AB. B) AC. C) AO. D) AD. 5) 2
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Refer to the information provided in Figure 6.5 below to answer the questions that follow. Figure 6.5 6) Refer to Figure 6.5. Molly ʹ s budget constraint is BD . Molly ʹ s income is $600, the price of a cassette tape is $15 and the price of a CD is $20. At Point B the consumer is buying ________ cassette tapes and ________ CDs. A) 40; 30 B) 20; 15 C) 0;30 D) 30;0 6) 7) The real cost of a car is its opportunity cost. Opportunity cost is determined by A) wealth. B) the price of the car. C) relative prices. D) the prices of the goods that are compliments to a car. 7) 8) Kathy eats five slices of pizza on a Saturday night but admits each slice of pizza doesn ʹ t taste as good as the previous one. This suggests that for Kathy the A) marginal utility of a slice of pizza is negative. B) total utility of slices of pizza is declining. C) marginal utility of a slice of pizza is positive but decreasing. D) total utility of slices of pizza is increasing by larger and larger increments. 8) 3
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Refer to the information provided in Figure 6.9 below to answer the questions that follow. Figure 6.9 9) Refer to Figure 6.9. The marginal utility of the third video game rental is A) 1. B) 3. C) 4. D) 22. 9) 10) If MU x/ P x < MU y/ P y, then A) X is more expensive than Y . B) spending a dollar less on Y and spending a dollar more on X increases utility. C) Y is more expensive than X . D) spending a dollar less on X , and spending a dollar more on Y increases utility.
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This note was uploaded on 03/30/2008 for the course ECON 2005 taught by Professor Zirkle during the Spring '07 term at Virginia Tech.

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- Exam Name MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1 Ted has $600 a week to spend on

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