practice_set_for_chapter_8

practice_set_for_chapter_8 - Exam Name_ MULTIPLE CHOICE....

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) 1) Which factor(s) constrain a household's consumption choices? A) the household's wealth B) the prices of the goods and services C) the household's preferences D) the household's income E) the household's income and the prices of the goods and services it buys 2) 2) A relative price A) is the total utility per dollar of one good divided by the total utility per dollar of another good. B) is the ratio of two marginal utilities per dollar. C) is the price of one good divided by the price of another good. D) is the price of one good divided by the quantity demanded of another good. E) is the price of one good divided by the total utility of another good. 3) 3) The slope of the budget line is A) the ratio of the price of a good to the houshold's income. B) the ratio of a household's income to the price of a good. C) the relative price. D) the ratio of the quantity demanded of one good to the quantity demanded of another. E) the absolute price. 4) 4) When the price of good X (placed on the horizontal axis) increases, holding the household's income and the price of good Y (placed on the vertical axis) fixed, A) the budget line rotates clockwise. B) the budget line remains unchanged. C) the budget line shifts to left. D) the budget line shifts to right. E) the budget line rotates counter clockwise. 1
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5) Holding the prices of good X and good Y constant, when real income increases A) the slpe of the budget line decreases. B) the slope of the budget line does not change and the budget line shifts to right. C) the slopeof the budget line does not change and the budget line shifts to left. D) the slope of the budget line increases. E) the slope of the budget line first increases and then decreases. 6) 6) Diminishing marginal utility means that A) hamburgers seem smaller as you eat more of them. B) Ralph will enjoy his second hamburger less than the first one. C) the utility from one hamburger is greater than the utility from two hamburgers. D) the utility from eating two hamburgers will be more than twice the utility from eating the first one. E) the price of two hamburgers is less than twice the price of one. Use the table below to answer the following question(s). Table 7.2 Quantity Utility Marginal Utility 0 0 30 1 30 12 2 A 5 3 B C 4 50 7) 7) Refer to Table 7.2. The value for B is A) 18. B) 47. C) 0. D) 30. E) 42. 8) 8) Total utility is always A) less than marginal utility. B) increasing when marginal utility is positive. C) decreasing when marginal utility is decreasing.
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practice_set_for_chapter_8 - Exam Name_ MULTIPLE CHOICE....

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