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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 3) 3) The slope of the budget line is 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, 1
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5) 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 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
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