Qn575 17706 1 refer to figure 21 2 a consumer that

QN=575
(17706)
1. Refer to Figure 21-2. A consumer that chooses to spend all of
her income could be at which point(s) on the budget constraint?

a. V only
b. Z only
c. V, W, X, or Y only
d. W, X, or Y only
QN=576
(17715)
Bundle L contains 10 units of good X and 20 units of good Y.
Bundle M contains 8 units of good X and 21 units of good Y. The
consumer is indifferent between bundle L and bundle M. Assume
that the consumer’s preferences satisfy the four properties of
indifference curves. Which of the following correctly expresses the
marginal rate of substitution of good X for good Y between these
two points? °
a. The consumer will give up 1 unit of good X to gain 2 units of good
Y.
b. The consumer will give up 2 units of good X to gain 1 unit of
good Y.
c. The price of good X is twice as large as the price of good Y.
d. The price of good X is half as large as the price of good Y.
QN=577
(17682)
Suppose at the consumer’s current consumption bundle the marginal
rate of substitution of cheese for wine is 1/2 bottle of wine per pound
of cheese. The price of one pound of cheese is $6, and the price of a
bottle of wine is $10. The consumer should increase his consumption
of °
a. cheese, decrease his consumption of wine, and move to a lower
indifference curve.
b. cheese, decrease his consumption of wine, and move to a higher
indifference curve.
c. wine, decrease consumption of cheese, and move to a higher
indifference curve.
d. cheese, decrease consumption of wine, and remain on the same
indifference curve.
QN=578
(17681)
An optimizing consumer will select a consumption bundle in which °
a. income is maximized, and prices are minimized.
b. utility is maximized, and prices are minimized.

c. utility is maximized, subject to budget constraints.
d. utility is maximized, and indifference curves are linear.
QN=579
(17697)
A consumer's preferences provide a °
a. ranking of the set of bundles that happen to fall on indifference
curves.
b. relative ranking of bundles that provide more of all goods.
c. framework for evaluating market equilibriums.
d. complete ranking of all possible consumption bundles.
QN=580
(17717)
Giffen goods have positively-sloped demand curves because they are °
a. inferior goods with no substitution effect.
b. normal goods with no substitution effect.
c. inferior goods for which the substitution effect outweighs the income
effect.
d. inferior goods for which the income effect outweighs the
substitution effect.
QN=581
(17707)
The slope of the budget constraint is determined by the °
a. relative price of the goods measured on the axes.
b. relative price of the goods measured on the axes and the consumer’s
income.
c. endowment of productive resources.
d. preferences of the consumer.
QN=582
(17694)
When the price of pizza falls, the substitution effect, for normal
goods Pepsi and pizza, causes a °
a. shift to a lower indifference curve so the consumer buys more Pepsi.