Chapter_9_problem_set

Chapter_9_problem_set - Exam Name MULTIPLE CHOICE Choose...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which one of the following statements best describes a consumer's budget line? 1) _______ A) the amount of each good a consumer can purchase B) the desired level of consumption for a consumer C) the limits to a consumer's set of affordable consumption choices D) the set of all affordable consumption choices E) the consumption choices made by a consumer 2) Let Y = $100, Q X = quantity of good X , and Q W = quantity of good W , P X = $4 and P W = $5. The budget equation is shown as 2) _______ A) Q X = Q W + (4/5) Y . B) 100 = 4 Q X + 5 Q W . C) Q X = 100 + (4/5) Q W . D) 100 = Q X + (4/5) Q W . E) Q W = Q X + (4/5) Y . 3) An indifference curve is best defined as 3) _______ 4) A consumer always has a cup of coffee with a tablespoon of sugar. What would the consumer's indifference curves for these two goods look like? 4) _______ A) nearly straight - lined B) straight - lined C) tightly curved D) upward sloping E) L - shaped. 5) Normal goods are defined as goods whose consumption 5) _______ 6) For an inferior good, which statement is true? 6) _______
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Use the figure below to answer the following question(s). Figure 8.10 7) Consider an initial budget line labelled RS in Figure 8.10. What would cause the budget line to shift to RT ?
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