200810021150350

200810021150350 - Microeconomics Testbank 1,...

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Microeconomics – Testbank 1, (Hubbard/O’Brien) Chapter 9: Consumer Choice and Behavioral Economics MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) What is held constant along one indifference curve? A) Marginal rate of substitution B) Total utility C) Marginal utility D) Prices of goods Answer: B Diff: 2 Page Ref: 299 Refer to Figure 9.1 for the questions below. Figure 9.1 2) In figure 9.1, beginning with the lower level of utility, a decrease in the price of popcorn is shown in: A) panel a. B) panel b. C) panel c. D) none of the above. Answer: B Diff: 3 Page Ref: 308 3) On an indifference curve/budget constraint graph, the substitution effect of a price change for one good is shown as a movement:
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A) from one equilibrium point to another one. B) along one budget constraint. C) along one indifference curve. D) from one indifference curve to another one. Answer: C Diff: 2 Page Ref: 307 4) Economists assume the goal of consumers is to: A) do as little work as possible to survive. B) consume as much as possible. C) make themselves as well off as possible. D) expend all their income. Answer: C Diff: 2 Page Ref: 272 5) When price increases for a normal good, the income and substitution effects: A) work in opposite directions and quantity demanded increases. B) work in opposite directions and quantity demanded decreases. C) work in the same direction to increase quantity demanded. D) work in the same direction to decrease quantity demanded. Answer: D Diff: 2 Page Ref: 280 6) If a consumer is maximizing total utility by buying goods X and Y, for a consumer to buy more of good X: A) the consumer is maximizing so nothing can change the consumption of X. B) the price of Y has to fall. C) the price of X has to rise. D) the price of X has to fall. Answer: D Diff: 2 Page Ref: 277 7) If you ate too many pieces of pie and got sick, then at least the last piece of pie: A) had constant total utility. B) had negative marginal utility. C) had constant marginal utility. D) had positive marginal utility. Answer: B Diff: 2 Page Ref: 274
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Refer to Figure 9.1 for the questions below. Figure 9.1 8) In figure 9.1, a change in the price of popcorn is shown in: A) panel a. B) panel b. C) panel c. D) none of the above. Answer: B Diff: 3 Page Ref: 308 9) Consumers maximize total utility within their budget constraint by: A) buying whatever they like the best. B) buying the cheapest goods they can find. C) buying the good with the largest marginal utility per dollar spent. D) buying the same dollar amount of each good. Answer: C Diff: 2 Page Ref: 277 10) If a consumer always buys goods rationally, then: A) the marginal utility of the different goods consumed will be equal.
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200810021150350 - Microeconomics Testbank 1,...

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