ECO 301 – Test Bank for Intermediate Microeconomics: A Modern Approach 9th Edition by Hal Varian – Complete Questions and Answers (All Chapters)

TEST BANK FOR INTERMEDIATE
MICROECONOMICS A MODER
APPROACH, 9E BY HAL VARIAN (ALL
CHAPTERS) COMPLETE QUESTIONS
AND ANSWERS GRADED A+

,
,CHAPTER 2: Budget Constraint


TRUE/FALSE


1. If there are two goods with positive prices and
the price of one good is reduced, while income
and other prices remain constant, then the size
of the budget set is reduced.


ANS: F DIF: 1


2. If good 1 is measured on the horizontal axis and
good 2 is measured on the vertical axis and if
the price of good 1 is p1 and the price of good
2 is p2, then the slope of the budget line is

, p2/p1.


ANS: F DIF: 1


3. If all prices are doubled and money income is left
the same, the budget set does not change
because relative prices do not change.


ANS: F DIF: 1


4. If there are two goods and if one good has a
negative price and the other has a positive price,
then the slope of the budget line will be positive.


ANS: T DIF: 1


5. If all prices double and income triples,


then the budget line will become