# Qn575 17706 1 refer to figure 21 2 a consumer that

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QN=575(17706)1.Refer to Figure 21-2. A consumer that chooses to spend all ofher income could be at which point(s) on the budget constraint?
a.V onlyb.Z onlyc.V, W, X, or Y onlyd.W, X, or Y onlyQN=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.Theconsumer is indifferent between bundle L and bundle M.Assumethat the consumer’s preferences satisfy the four properties ofindifference curves.Which of the following correctly expresses themarginal rate of substitution of good X for good Y between thesetwo points?°a.The consumer will give up 1 unit of good X to gain 2 units of goodY.b.The consumer will give up 2 units of good X to gain 1 unit ofgood 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 marginalrate of substitution of cheese for wine is 1/2 bottle of wine per poundof cheese. The price of one pound of cheese is \$6, and the price of abottle of wine is \$10. The consumer should increase his consumptionof°a.cheese, decrease his consumption of wine, and move to a lowerindifference curve.b.cheese, decrease his consumption of wine, and move to a higherindifference curve.c.wine, decrease consumption of cheese, and move to a higherindifference curve.d.cheese, decrease consumption of wine, and remain on the sameindifference 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 indifferencecurves.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 incomeeffect.d.inferior goods for which the income effect outweighs thesubstitution 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’sincome.c.endowment of productive resources.d.preferences of the consumer.QN=582(17694)When the price of pizza falls, the substitution effect, for normalgoods Pepsi and pizza, causes a°a.shift to a lower indifference curve so the consumer buys more Pepsi.

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