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MT2Spring2008Practice

# MT2Spring2008Practice - Exam Name MULTIPLE CHOICE Choose...

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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 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
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. 6) 7) The real cost of a car is its opportunity cost. Opportunity cost is determined by 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
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