Question

To be indifferent between two combinations of goods is to:

a. receive the same amount of utility from the two combinations.

b. make a determination about which combination provides more utility.

c. have a budget constraint that runs through both combinations.

d. pay the same price for the two combinations.

Question 2

How much a consumer values two goods relative to one another can be seen by looking at:

Select one:

a. the slope of the consumer's indifference curves.

b. the intersection of any two indifference curves.

c. the intersection of the budget constraint and an indifference curve.

d. the slope of the consumer's budget constraint.

Question 3

Which of the following is NOT necessarily true about indifference curves?

Select one:

a. Indifference curves further from the origin represent greater levels of utility.

b. Indifference curves slope downward.

c. Indifference curves cannot intersect each other.

d. Indifference curves are always symmetrical.

Question 4

The budget constraint shows how:

Select one:

a. the consumer values two goods relative to one another.

b. the market values two goods relative to one another.

c. quantity demanded goes up when income goes up.

d. quantity demanded goes down when a price goes up.

Question 5

A combination of goods where an indifference curve intersects the budget constraint:

Select one:

a. costs less than any other point on your budget constraint.

b. must cost more than at least one other point on your budget constraint.

c. provides more utility than any other point on your budget constraint.

d. must provide less utility than at least one other point on your budget constraint.

Question 6

Professor Girante says that the way we make choices about what to buy depends on how our dreams and wants meet reality. Our dreams and wants are represented by _______ and reality is represented by _______.

Select one:

a. our incomes and the prices we face; our preferences

b. our indifference curves; our budget constraint

c. our preferences; our indifference curves

d. our budget constraint; our incomes and the prices we face

Question 7

Which of the following is correct?

Select one:

a. Marginal utility from espresso is equal to total utility from espresso divided by the number of espressos.

b. Total utility from espresso is equal to the marginal utility of the last espresso.

c. Marginal utilty from espresso is equal to the sum of the total utility after each espresso.

d. Total utility from espresso is equal to the sum of the marginal utilities of each espresso.

Question 8

Why does Professor Girante mention that Starbucks offers over 80,000 combinations of drinks?

Select one:

a. To show how producers contribute to the difficulty that consumers have making decisions.

b. To show how Starbucks uses bundling and tying to maximize profits.

c. To show the supposed variety that consumers think they enjoy is just an illusion.

d. To show the incredible number of choices that consumers face every day.

Question 9

The budget constraint is:

Select one:

a. upward-sloping because a greater budget means more consumption.

b. bowed-inward because preferences change as consumption changes.

c. a straight line because the price ratio is constant.

d. downward-sloping because of the law of demand.

Question 10

Select one:

a. the affordable combinations of goods from the unaffordable combinations of goods.

b. the units of the good on the horizontal axis from the units of the good on the vertical axis.

c. combinations of goods according to how much utility, or satisfaction, they provide.

d. those combinations of goods that provide utility from those combinations that do not.

question 11

The law of demand arises from:

Select one:

a. the law of supply.

b. every producer analyzing the different choices they have and deciding what to produce.

c. every consumer analyzing the different choices they have and deciding what to buy.

d. the law of market equilibrium.

Question 12

An indifference map is:

Select one:

a. a set of indifference curves each representing different levels of utility.

b. the underlying price and income data that makes up an indifference curve.

c. another name for an indifference curve.

d. a diagram that shows both an indifference curve and a budget constraint.

Question 13

As you move down and to the right along an indifference curve:

Select one:

a. the marginal rate of substitution rises.

b. the price ratio falls

c. the price ratio rises.

d. the marginal rate of substitution falls.

Question 14

Your income is:

Select one:

a. determined entirely by factors not under your control.

b. determined entirely by factors under your control.

c. determined both by factors under your control and factors not under your control.

d. essentially a random variable from the perspective of economists.

When we graph a budget constraint, we put _______ on the vertical axis and _______ on the horizontal axis.

Question 15

Select one:

a. the quantity of one good; the price of another good

b. the price of one good; the quantity of another good

c. the price of one good; the price of another good

d. the quantity of one good; the quantity of another good

Answer 1

Answer fr 15)

the price of one good; the price of another good

Option C is correct

Answer for 13)

the marginal rate of substitution falls

Option d is correct

Answer for 11)

every consumer analyzing the different choices they have and deciding what to buy.

Option c is correct

ANswer for 9)

c. a straight line because the price ratio is constant.

Option C is correct

Answer for 7)

d. Total utility from espresso is equal to the sum of the marginal utilities of each espresso.

Option d is correct

Answer for 5)

d. must provide less utility than at least one other point on your budget constraint.

In this case point of tangency would provide higher utility

Option d is correct

Answer for 1)

a. receive the same amount of utility from the two combinations.

Option a is correct

Answer for 2)

a. the slope of the consumer's indifference curves.

Slpoe is MRS that tells us consumption of one unit of good increased and one unit of other good decreased to maintain same level of utility

Option a is correct

Ans for 3)

d. Indifference curves are always symmetrical.

may not be true in case of homothetic preferences

Option d is correct

Ans for 4)

d. quantity demanded goes down when a price goes up.

Budget line slope depends on price ratio

Option d is correct