in-class-quiz1-withanswers

in-class-quiz1-withanswers - A movie with a ranking of 5 is...

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Econ326 In-class quiz #1 Please use scantron to enter your answers. The quiz is open book, you can refer to textbook and lecture notes, but please complete the quiz independently. (Answers are highlighted in red.) 1. The assumption of transitive preferences implies that indifference curves must: (a) have a positive slope. (b) not cross one another. (c) be convex to the origin. (d) be L-shaped. (e) all of the above. 2. Gary Franklin is a movie critic. He invented the Franklin Scale with which he rates movies from 1 to 10 (10 being best). When asked about his scale, Mr. Franklin explained "that it is a subjective measure of movie quality. A movie with a ranking of 10 is not necessarily 10 times better than a movie with a ranking of 1, but it is better.
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Unformatted text preview: A movie with a ranking of 5 is better than a movie with a ranking of 1, but is not as good a movie with a ranking of 10. That's all it really tells you." Based on Mr. Franklin's description, his scale is A) neither cardinal nor ordinal. B) ordinal but not cardinal. C) an objective standard to judge movies. D) cardinal but not ordinal. 3. The slope of an indifference curve reveals: A) the ratio of market prices. B) that preferences are complete. C) that preferences are transitive. D) the marginal rate of substitution of one good for another good. E) none of the above. 4. Which of the following is a monotonic transformation of the utility function U=X+Y? A) lnX+lnY B) 5X+4Y C) 10X+10Y D) X+Y 2 E) X*Y...
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