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mid203-2000 - Part of past mid-term examins 1.“If an...

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Part of past mid-term examins 1.“If an individual is to maximize the utility received from consumption, he or she should spend all available income. . . .” This statement assumes a. that saving is impossible. b. that the individual is not satiated in all goods. c. that no goods are “inferior.” d. both a and b. 2.If an individual’s indifference curve map does not obey the assumption of a diminishing MRS , then 3.As an individual moves northwest along his or her indifference curve substituting more and more Y for X , his or her MRS of X for Y 4.The point of tangency between a consumer’s budget constraint and his or her indifference curve represents 5.An increase in an individual’s income without changing relative prices will a. rotate the budget constraint about the X-axis. b. shift the indifference curves outward. c. shift the budget constraint outward in a parallel way. e. rotate the budget constraint about the Y axis. 6.When a price increases, the income effect a. is negative for normal goods. b. is negative for inferior goods. c. is negative for a Giffen good. d. is zero for a Giffen good. 7.Consider the two statements: I. X is an inferior good. II. X exhibits Giffen’s Paradox. Which of the following is true?
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