practiceexam2B-2

# practiceexam2B-2 - ECON 251 Exam #2 Pink Fall 2009...

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ECON 251 Exam #2 Pink Fall 2009 (Practice Exam #2B for Fall 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

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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 a. the income effect of the wage change is stronger than the substitution effect of the wage change. b.

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## This note was uploaded on 11/01/2011 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue.

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practiceexam2B-2 - ECON 251 Exam #2 Pink Fall 2009...

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