If money income triples and the price of all goods doubles, then the:
0 budget line will shift in.
o . consumer will buy more of normal goods.
0 consumer is worse off due to inflation.
0 budget line remains unchanged.
A decrease in the price of good Y will have what effect on the budget line on a normal X—Y graph?
0 Parallel inward shift of the line
0 Increase the vertical intercept <nght answer
0 Parallel outward shift of the line
6 . Decrease the horizontal intercept
139. Suppose that three consumers are in the market for good X. Consumer 1's (inverse) PX =
20 - Qx; Censumer 2's (inverse) demand is PX = 20 - 2Qx; and Consumer 3‘s (inverse) demand
is PX = 20 - 4Qx. When PX = $10, the market will demand
A. 17.5 units an
Suppose earnings are given by E = $60 + $7(24 - L), where E is earnings and L is the hours of leisure. What is the price to the worker of consuming
an additional hour ofleisure?
0 $7 <——Fiight
If a ﬁrm offers to pay a worker $10 for each hour of leisure the worker gives up, then the opportunities confronting the worker will be given by the:
6 . convex curve from the origin.
0 straight line with a positive slope.
O concave curve from the origin.
At any point on an indifference curve, the slope indicates:
9 . how the total satisfaction of the consumer changes with different market baskets.
O the way the consumer's budget is allocated between the two goods.
0 the market rate of substitution between
Diminishing marginai rate of substitution implies that indifference curves are:
0 . convex from the origin.
0 either convex or concave from the origin.
0 concave from the origin.
0 straight line.
Suppose earnings are given by E = $60 + $7(24 - L), where E is earnings and L is the hours ofleisure. The ﬁxed payment for this worker is:
0 $60 <— Right
9 . $24.
0 $7.
What is the maximum amount of good X that can be purchased ifX and Y are the only two goods available for purchase and PX = $10, Py = $20, Y =
O, and M = 400?
030
9.20
040
00
If an Increase in income causes a decrease in the consumption of good Y, we know that good Y is:
0 an inferior good. <—right
O a substitute.
6 . a normal good.
0 a complement.
Suppose a worker is offered a wage of $8 per hour. plus a ﬁxed payment of $100 per day, and he can use 24 hours per day. What are the maximum
total earnings the worker can earn in a day?
Managers can get workers to work longer hours:
0 with lower overtime pay in excess of regular hourly pay.
0 with higher overtime pay in excess of regular hourly pay. <—right
6 . by increasing wages on all hours worked.
0 by lowering wages on all hours wor
After a price decrease for good X. the new consumer equilibrium level of good X will be:
0 indeterminate without more information. <—right
o . lower than before the price change.
0 the same as before the price change.
0 higher than before the price change
Industry Supply
Supply From A Competitive Industry
How are the supply decisions of the
many individual firms in a
competitive industry to be combined
to discover the market supply curve
for the entire industry?
Supply From A Competitive Industry
Since eve