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Microeconomics [ch. 21]

17 Questions  I  By Emy_2
Economics Quizzes & Trivia
The Theory of Consumer Choice

  
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1.  If we measure the quantity of French fries on the horizontal axis and the quantity of hamburgers on the vertical axis, and if the price of French fries is $0.60 and the price of a hamburger is $2.40, then the slope of the budget constraint is 1/4 (and it is negative).
A.
B.
2.  A budget constraint is a set of commodity bundles that provide the consumer with the same level of satisfaction
A.
B.
3.  Indifference curves measure the consumer's willingness to trade one good for another good while maintaining a constant level of satisfaction
A.
B.
4.  When drawn on a graph that measures the quantity of a good on each axis, indifference curves are usually straight lines that slope downward (negatively).
A.
B.
5.  Indifference curves tend to be bowed inward because a consumer is willing to trade a greater amount of a good for another if they have an abundance of the good they are trading away
A.
B.
6.  The limit on the consumption bundles that a consumer can afford is known as
A.
B.
C.
D.
7.  Suppose a consumer must choose between the consumption of sandwiches and pizza.  If we measure the quantity of pizza on the horizontal axis and the quantity of sandwiches on the vertical axis, and if the price of pizza is $10 and the price of a sandwich is $5, then the slope of the budget constraint is
A.
B.
C.
D.
8.  The slope at any point on an indifference curve is known as
A.
B.
C.
D.
9.  Which of the following statements is not true with regard to the standard properties of indifference curves?
A.
B.
C.
D.
10.  The consumer's optimal purchase of any two goods is the point where
A.
B.
C.
D.
11.  Which of the following is true about the consumer's optimum consumption bundle? At the optimum,
A.
B.
C.
D.
E.
12.  Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis.  If indifference curves are bowed inward, as we move from having an abundance of good X to having an abundance of good Y, the marginal rate of substitution of good Y for good X (the slope of the indifference curve) 
A.
B.
C.
D.
13.  If an increase in a consumer's income causes the consumer to increase his quantity demanded of a good, then the good is
A.
B.
C.
D.
14.  If an increase in a consumer's income causes the consumer to decrease her quantity demanded of a good, then the good is
A.
B.
C.
D.
15.  If an increase in a consumer's income causes the consumer to increase her quantity demanded of a good, then the good is
A.
B.
C.
D.
16.  If income and prices were both to double, the budget line would 
A.
B.
C.
D.
E.
17.  Which of the following is not true regarding the outcome of a consumer's optimization process? 
A.
B.
C.
D.
E.
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