practiceexam2A

practiceexam2A - ECON 251 Exam #2 Pink Fall 2009 (Practice...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
ECON 251 Exam #2 Pink Fall 2009 (Practice Exam #2A for Spring 2010) 1. Adrienne consumes only pasta and rice. With her $50 weekly income, she can afford to buy 5 pounds of rice or 10 pounds of pasta. This implies her budget line equation is which of the following? a. Qpasta= -2 Qrice +10 b. Qpasta= 2 Qrice +10 c. Qrice= -2 Qpasta +10 d. Qrice= 2 Qpasta+10 Brian consumes only burritos and Coke with his $20 weekly income. The table below describes his marginal utility for each quantity. Quantity per week Marginal utility burritos Glasses of Coke 1 50 60 2 40 50 3 20 30 4 10 20 5 5 10 2. If burritos are $5 each and Coke is $2 per glass, which combination maximizes his utility given his $20 income? a. (1 burritos, 2 cokes) b. (2 burritos, 4 cokes) c. (2 burritos, 5 cokes) d. (4 burritos, 5 cokes) 3. When the consumer is at his or her best affordable consumption point, the marginal rate of substitution is a. greater than the ratio of the price of good ‘x’ to the price of good ‘y’ (Px/Py) b. equal to the ratio of the price of good ‘x’ to the price of good ‘y’ (Px/Py) c. less than the ratio of the price of good ‘x’ to the price of good ‘y’ (Px/Py) d. maximized. 4. Which of the following is generally true about an indifference curve: a. It has a negative slope b. Indifference curves with higher utility are closest to the origin c. The slope of the indifference curve gets steeper as consumption of good ‘x’ increases d. Both a and b
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
5. According to the shape of the indifference curves represented in the graph below, what can we say about the two goods, Pepsi and Coke: a. They are perfect substitutes b. They are perfect complements c. They are Giffen goods d. None of the above 6. Adam has an income of $50 and consumes only Pizza and coke. The price for one pizza is $7 and a bottle of coke costs $6. What is the slope of Adam’s budget line if the quantity of pizza is measured on the x axis? a. -6/7 = -0.86 b. -7/6 = -1.17 c. -25/3 = -8.3 d. -50/7 = -7.1 7. Jennifer has an income of $40 per week and consumes only salad and soup. One salad costs $8 and a cup of soup costs $4. What is the opportunity cost to Jennifer of buying a cup of soup? a. 2 salads b. 10 salads c. ½ of a salad d. 5 salads 8. Jennifer has an income of $40 per week and consumes only salad and soup. One salad costs $8 and a cup of soup costs $4. What is her marginal rate of substitution when she is maximizing her utility? (Assume the quantity of salad is measured on the Y-axis and the quantity of soup is measured on the X-axis.) a. 2 b. 5 c. 10 d. 0.5 Q Coke Q Pepsi
Background image of page 2
9. Based on the graph below representing consumption choices, which of the following must be true: a. A is preferred to B and C b. B is preferred to A and C c. D is preferred to A, B and C d. Both b and c are correct 10. An increase in the wage will result in a decrease in the quantity of labor supplied if
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 12

practiceexam2A - ECON 251 Exam #2 Pink Fall 2009 (Practice...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online