1.
Suppose all consumers are maximizing utility with convex indifference curves. All face the same prices, and are perfectly rational. According to microeconomic models, at the maximization bundle they should
A. All have the same marginal rate of substitution
B. All buy more of the least expensive good
C. All end up with the same bundle of goods
D. All have the same level of satisfaction
2.
Consider an indifference map with food on the vertical axis and shelter on the horizontal axis.
If a consumer is willing to give up 3 units of food in exchange for 1 unit of shelter and food is priced at $5 per unit and shelter at $10 per unit, then the consumer is:
A. Purchasing too much food for utility maximization
B. Purchasing too much shelter for utility maximization
C. Purchasing just the right amount of each good for utility maximization
D. Purchasing less than the budget would allow
3.
If a consumer with convex indifference curves moves along her budget line, closer and closer to the horizontal axis, as she is moving:
A. The marginal utility she gets from good Y declines.
B. The marginal utility she gets from good X declines.
C. The marginal utility she gets from good X increases.
D. The price ratio of the two goods changes.
1.
Suppose all consumers are maximizing utility with convex indifference curves. All face the same prices, and are perfectly rational. According to microeconomic models, at the maximization bundle they should
| A. All have the same marginal rate of substitution | ||||||||||||||||||||||||||
| B. All buy more of the least expensive good | ||||||||||||||||||||||||||
| C. All end up with the same bundle of goods | ||||||||||||||||||||||||||
| D. All have the same level of satisfaction 2. Consider an indifference map with food on the vertical axis and shelter on the horizontal axis. If a consumer is willing to give up 3 units of food in exchange for 1 unit of shelter and food is priced at $5 per unit and shelter at $10 per unit, then the consumer is:
|
Related textbook solutions
Related questions
budget line
marginal utility
complete property of preferences
market demand
consumption bundle
substitution effect
Giffen good
total effect
income effect
transitive property of preferences
indifference curves
utility
the marginal rate of substitution
utility function
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1. |
_____ |
The satisfaction or benefit that consumers receive from consuming goods or services.
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2. |
________________ _ |
A particular combination of specific quantities of goods or services |
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3. |
________________ _ |
Consumers can rank all conceivable bundles of goods or services |
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4. |
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If A is preferred to B, and B is preferred to C, then A is always preferred to C. |
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5. |
_____ |
Equation showing a consumerâs perception of the total utility forthcoming from consuming each bundle of goods and services. |
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6. |
_____ |
A set of consumption bundles each and every one of which provides a consumer with exactly the same level of total utility. |
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7. |
_____ |
The number of units of Y that must be given up for total utility to remain the same when one more unit of X is consumed. |
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8. |
_____ |
The addition to total utility attributable to consuming one more unit of a good, holding the consumption of all other goods constant. |
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9. |
_____ |
The line showing all bundles of goods that can be purchased at given prices if the entire income is spent. |
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10. |
_____ |
The change in the consumption of a good that would result if the consumer remained on the original indifference curve after the price of the good changes. |
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11. |
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The change in consumption of goods results strictly from the change in purchasing power after the price of a good changes. |
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12. |
________________ _ |
The sum of the substitution and income effects. |
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13. |
_____ |
A good for which quantity demanded varies directly with price, causing an upward sloping demand curve. |
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14. |
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A list of prices and the corresponding quantity consumers are willing and able to purchase at each price. |
