tbch05 - CHAPTER 5 Applying Consumer Theory MULTIPLE CHOICE...

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

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon

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

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

Unformatted text preview: CHAPTER 5 Applying Consumer Theory MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question. Figure 5.1 1) Figure 5.1 shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks assuming he has $20 to spend on these goods. Which of the following points are on Bobby's price-consumption curve? A) 10 snacks and 20 juices B) 10 snacks and 0 juices C) 10 snacks and 5 juices D) 10 snacks and 15 juices Answer: D Diff: 0 Topic: Deriving Demand Curves 2) Figure 5.1 shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks assuming he has $20 to spend on these goods. Which of the following points are on Bobby's demand curve for snacks? A) p = 2, q = 10 B) p = 2, q = 13 C) p = 2, q = 5 D) p = 1, q = 20 Answer: C Diff: 1 79 Chapter 5/Applying Consumer Theory Topic: Deriving Demand Curves 3) Figure 5.1 shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. This information could be used to determine A) the slope of Bobby's demand curve for juice. B) the amount by which Bobby's demand curve for juice shifts when his income rises. C) the amount by which Bobby's demand curve for juice shifts when the price of snacks rises. D) All of the above. Answer: C Diff: 1 Topic: Deriving Demand Curves 4) Figure 5.1 shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. As the price of snacks rises, Bobby's utility A) stays the same. B) increases. C) decreases. D) might change, but there is not enough information to determine. Answer: C Diff: 0 Topic: Deriving Demand Curves 5) Figure 5.1 shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. Bobby's demand for snacks is A) unit elastic. B) elastic. C) inelastic. D) perfectly elastic. Answer: C Diff: 2 Topic: Deriving Demand Curves 6) As the price of a good rises, the consumer will experience A) a desire to consume a different bundle. B) a decrease in utility. C) a southwesterly movement on the indifference map. D) All of the above. Answer: D Diff: 1 80 Chapter 5/Applying Consumer Theory Topic: Deriving Demand Curves 7) An increase in the price of a good causes A) a change in the slope of the budget line. B) an increase in the consumption of that good. C) a rightward shift of the demand curve for that good. D) a parallel rightward shift of the budget line. Answer: A Diff: 1 Topic: Deriving Demand Curves 8) Suppose a graph is drawn to show a consumer's preferences for football tickets and basketball tickets. The quantity of football tickets is measured on the horizontal axis. If the price-consumption curve is horizontal when the price of football tickets changes, then A) football tickets are an inferior good....
View Full Document

This note was uploaded on 12/21/2011 for the course ECON 214 taught by Professor Bayemichael during the Spring '09 term at HKU.

Page1 / 22

tbch05 - CHAPTER 5 Applying Consumer Theory MULTIPLE CHOICE...

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