1
ECOS2001 – Intermediate Microeconomics
Practice multiple choice questions
For
MidSemester Exam
1.
If you have an income of $18 to spend, if commodity X costs $2 per unit, and if commodity Y
costs $16 per unit, then the equation for your budget line can be written as
a.
X/2 + Y/16 = 18.
b.
(X + Y)/18 =18.
c.
X + 8Y = 9.
d.
2(X + Y) = 9.
e.
2(X + 8Y) = 8.
2.
Your budget is such that you could exactly afford either 3 units of X and 9 units of Y, or 4 units of
X and 8 units of Y. How many units of Y could you buy if you spent all of your income on Y?
3.
If she spends her entire budget, Betsy can afford 24 peaches and 15 watermelons. She can also just
afford 14 peaches and 17 watermelons. Each peach costs $1. What is the price of a watermelon?
4.
If all prices and income increase by 10%, then the budget line will:
5.
Preferences are said to be monotonic if
a.
all goods must be consumed in fixed proportions.
b.
all goods are perfect substitutes.
c.
more is always preferred to less.
d.
there is a diminishing marginal rate of substitution.
e.
None of the above.
6.
Charlie has the utility function U(X, Y) = XY. His indifference curve passing through 6 apples and
8 bananas will also pass through the point where he consumes 2 apples and
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
2
This is the end of the preview.
Sign up
to
access the rest of the document.
 Three '10
 OleksiiBirulin
 Waldo

Click to edit the document details