Quiz%203 - QUIZ 3 ECON 210 NAME: _ 1. According to the...

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QUIZ 3 – ECON 210 NAME: _______________________________ 1. According to the text, which one is not an axiom of consumer choice? a. Substitutability b. Declining marginal value c. Law of demand d. Rationality 2. According to the textbook, rationality means : a. A hierarchical structure is required to determine the allocation of scarce resources b. Cooperation is required to ensure that all agents know each other’s opportunity costs so they can decide who will produce what to maximize the gains from trade c. Whenever the marginal value of a good exceeds its cost, a consumer will purchase it d. A central planner more often than not lacks adequate information to assess production and consumption, and so decisions are best left to the free-market system 3. Phoebe just bought a cup of tea for $5. Soon after, when asked whether she would like to purchase another cup for $5, she refused the offer. This indicates that : a. Phoebe’s marginal value for a cup of tea is now greater than $5 b. Phoebe is unwilling to buy a cup of
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This note was uploaded on 02/26/2012 for the course ECON 210 taught by Professor Staff during the Fall '08 term at Purdue University.

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Quiz%203 - QUIZ 3 ECON 210 NAME: _ 1. According to the...

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