1.
A consumer that chooses to spend all of her income in the figure will be at point(s)
A. B.
B. E.
C. C or E.
D. A, B, or C.
A consumer that chooses to spend less than all of her income in the figure will be at a point like A. D.
B. E.
C. C or E.
D. A, B, or C.
A consumer that chooses to spend all of her income on Potato Chips in the figure will be at a point like A. D.
B. C.
C. C or E.
D. A, B, or C.
E. A.
A consumer that chooses to spend all of her income on Diet Coke in the figure will be
at a point like A. D.
B. C.
C. C or E.
D. A, B, or C. 2.
Garbage and pain can be represented by indifference curves that are A. bowed out
B. bowed in
C. straight lines
D. right angles
Left shoes and right shoes can be represented by indifference curves that are A. bowed out
B. bowed in
C. straight lines
D. right angles
Nickels and dimes can be represented by indifference curves that are
A. bowed out
B. bowed in
C. straight lines
D. right angles
3.
Along the demand curve A. the income effect must be positive
B. the income effect must be negative
C. the income effect may be positive or negative
D. income effect and the substitution effect may be in the same or in opposite directions.
E. c and d of the above
Along the demand curve
A. the income effect must be positive
B. the income effect must be negative
C. the substitution effect must be negative (a rise in price causes a decline in quantity demanded)
D. income effect and the substitution effect must both be negative
E. income effect and the substitution effect must both be positive
To derive the demand curve for a good the
A. income effect must be greater than the substitution effect. B. substitution effect must be greater than the income effect.
C. substitution effect must be in the same direction as the income effect.
D. income effect and the substitution effect may be in the same or in opposite directions.
4.
Which of the following is most likely a luxury good?
A. an antique car
B. gasoline
C. a bus ticket
D. an airline ticket
Which of the following is most likely an inferior good? A. an antique car
B. gasoline
C. a bus ticket
D. an airline ticket
Which of the following is most likely a normal good?
A. an antique car
B. gasoline
C. an airline ticket
D. a sandwich
E. all of the above are nomal goods.
5.
Assume that the consumer depicted in the figure has an income of $20. The price of
A consumer that chooses to spend all of her income in the figure will be at point(s)
A. B.
B. E.
C. C or E.
D. A, B, or C.
A consumer that chooses to spend less than all of her income in the figure will be at a point like A. D.
B. E.
C. C or E.
D. A, B, or C.
A consumer that chooses to spend all of her income on Potato Chips in the figure will be at a point like A. D.
B. C.
C. C or E.
D. A, B, or C.
E. A.
A consumer that chooses to spend all of her income on Diet Coke in the figure will be
at a point like A. D.
B. C.
C. C or E.
D. A, B, or C. 2.
Garbage and pain can be represented by indifference curves that are A. bowed out
B. bowed in
C. straight lines
D. right angles
Left shoes and right shoes can be represented by indifference curves that are A. bowed out
B. bowed in
C. straight lines
D. right angles
Nickels and dimes can be represented by indifference curves that are
A. bowed out
B. bowed in
C. straight lines
D. right angles
3.
Along the demand curve A. the income effect must be positive
B. the income effect must be negative
C. the income effect may be positive or negative
D. income effect and the substitution effect may be in the same or in opposite directions.
E. c and d of the above
Along the demand curve
A. the income effect must be positive
B. the income effect must be negative
C. the substitution effect must be negative (a rise in price causes a decline in quantity demanded)
D. income effect and the substitution effect must both be negative
E. income effect and the substitution effect must both be positive
To derive the demand curve for a good the
A. income effect must be greater than the substitution effect. B. substitution effect must be greater than the income effect.
C. substitution effect must be in the same direction as the income effect.
D. income effect and the substitution effect may be in the same or in opposite directions.
4.
Which of the following is most likely a luxury good?
A. an antique car
B. gasoline
C. a bus ticket
D. an airline ticket
Which of the following is most likely an inferior good? A. an antique car
B. gasoline
C. a bus ticket
D. an airline ticket
Which of the following is most likely a normal good?
A. an antique car
B. gasoline
C. an airline ticket
D. a sandwich
E. all of the above are nomal goods.
5.
Assume that the consumer depicted in the figure has an income of $20. The price of
