Final - Stones song goes: You cant always get what you...

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Stones song goes: You can t always get what you want. This echoes an important ʺ ʹ ʺ theme from microeconomics. Which of the following statements is the best example of this theme? A) Consumers must make the best purchasing decisions they can, given their limited incomes. B) Workers do not have as much leisure as they would like, given their wages and working conditions. C) Workers in planned economies, such as North Korea, do not have much choice over jobs. D) Firms in market economies have limited financial resources. 2) __________ questions have to do with explanation and prediction, __________ questions have to do with what ought to be. D) Positive; normative. 3) To arbitrage a price difference between two markets, you should: B) buy in the low - price market and sell in the high - price market. 4) A consumer prefers market basket A to market basket B, and prefers market basket B to market basket C. Therefore, A is preferred to C. The assumption that leads to this conclusion is: A) transitivity. 5) A consumer has $100 per day to spend on product A, which has a unit price of $7, and product B, which has a unit price of $15. What is the slope of the budget line if good A is on the horizontal axis and good B is on the vertical axis? A) - 7/15 B) - 7/100 C) - 15/7 D) 7/15 5) 1 Economics 302 Final Spring 2009 Scenario 3.1: Andy derives utility from two goods, potato chips (Qp) and Cola (Qc). Andy receives zero utility unless he consumes some of at least one good. The marginal utility that he receives from the two goods is given as follows: Qp MUp Qc MUc 1 12 1 24 2 10 2 22 3 8 3 20 4 6 4 18 5 4 5 16 6 2 6 14 7 - 2 7 12 8 - 4 8 10 6) Refer to Scenario 3.1. What is the total utility that Andy will receive if he consumes 5 units of potato chips (Qp) and no Cola drink (Qc)? A) 4 utils B) 10 utils C) 30 utils D) 40 utils E) none of the above 6) 7) The principle of revealed preference would say that if Xavier chooses market basket A over market basket B then: A) if A is more expensive than B, then Xavier must prefer A over B. 8) A supply curve reveals:
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D) the quantity of output that producers are willing to produce and sell at each possible market price. 9) Along any downward sloping straight - line demand curve: B) the price elasticity varies, but the slope is constant. 10) We observe that both the price of and quantity sold of golf balls are rising over time. This is due to: A) continual improvements in the technology used to produce golf balls. B) increases in the price of golf clubs over time. C) decreases in membership fees for country clubs with golf facilities. D) more stringent professional requirements on the quality of golf balls requiring producers to use more expensive raw materials. 10)
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This note was uploaded on 07/27/2009 for the course FIN 470 taught by Professor Kamath during the Spring '09 term at Cleveland State.

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Final - Stones song goes: You cant always get what you...

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