11
33) Refer to Figure 6.2. Along budget constraint AC, the opportunity cost of one beer is
A) 1/4 of a gardenburger.
B) 1 gardenburger.
C) 2 gardenburgers.
D) changing as Mr. Lingle moves down his budget constraint.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
34) Refer to Figure 6.2. Mr. Lingle’s budget constraint is AC. His choice set is all points
A) in the area bounded by OAC.
B) to the right of budget constraint AC.
C) along budget constraint AC.
D) along the vertical and horizontal axes.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
35) Refer to Figure 6.2. Mr. Lingle’s budget constraint is AC. Point E is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle‘s opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot
purchase with his current income.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
36) Refer to Figure 6.2. Mr. Lingle’s budget constraint is AC. Point C is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle‘s opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot
purchase with his current income.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
12
37) Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a gardenburger is $5,
Mr. Lingle’s monthly income is
A) $8.
B) $150.
C) $200.
D) $240.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
38) Refer to Figure 6.2. Assume Mr. Lingle is on budget constraint AC. If the price of a beer is $4, Mr.
Lingle’s monthly income is
A) $10.
B) $40.
C) $160.
D) $200.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
39) Refer to Figure 6.2. Assume Mr. Lingle‘s budget constraint is AC. He will have leftover income if he
purchases the bundle represented by point
A) A.
B) B.
C) E.
D) D.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
40) Refer to Figure 6.2. Assume Mr. Lingle’s budget is AC. Given his current monthly income, he does not
have enough income to purchase the quantities of the two goods at point
A) A.
B) B.
C) E.
D) D.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
13
41) Refer to Figure 6.2. Assume Mr. Lingle’s budget is AC. At which point does Mr. Lingle spend exactly
his income?
A) A.
B) B.
C) C.
D) All of the above are correct.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
42) Refer to Figure 6.2. Mr. Lingle’s budget constraint is AC. Point D is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) in Mr. Lingle’s opportunity set but is not on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot
purchase with his current income.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
43) Refer to Figure 6.2. Mr. Lingle‘s budget constraint is AC. Point A is
A) an available option and Mr. Lingle exactly spends all of his income.
B) an available option and Mr. Lingle does not spend all of his income.
C) not in Mr. Lingle‘s opportunity set but is on his budget constraint.
D) not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot
purchase with his current income.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
14
Refer to the information provided in Figure 6.3 below to answer the question(s) that follow.
Figure 6.3
44) Refer to Figure 6.3. Molly’s budget constraint is AC. It would swivel to AD if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
45) Refer to Figure 6.3. Molly’s budget constraint is AC. It would swivel to AB if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
15
46) Refer to Figure 6.3. Molly’s budget constraint is AC. Molly can purchase
A) none of the points along AD.
B) all of the points along AB.
C) all of the points along BD.
D) none of the points along AC.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
47) Refer to Figure 6.3. Molly’s budget constraint is AB. It would swivel to AD if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
48) Refer to Figure 6.3. Molly’s budget constraint is AD. It would swivel to AB if the price of
A) DVDs increased.
B) DVDs decreased.
C) CDs increased.
D) CDs decreased.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
49) Refer to Figure 6.3. Molly’s budget constraint is AB. Molly can purchase
A) none of the points along AD.
B) none of the points along AC.
C) all of the points along AC.
D) none of the above.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
16
Refer to the information provided in Figure 6.4 below to answer the question(s) that follow.
Figure 6.4
50) Refer to Figure 6.4. Bill’s budget constraint is AC. If the black bean price decreases, Bill’s budget
constraint will be
A) A0.
B) AB.
C) AC.
D) AD.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
51) Refer to Figure 6.4. Bill’s budget constraint is AC. If the bell peppers price increases, Bill’s budget
constraint will be
A) AB.
B) AC.
C) AD.
D) The budget constraint is not depicted on the diagram.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
17
52) Refer to Figure 6.4. Bill’s budget constraint is AC. His budget constraint would shift to AB if the price
of
A) black beans increased.
B) black beans decreased.
C) bell peppers increased.
D) bell peppers decreased.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
53) Refer to Figure 6.4. Bill‘s budget constraint is AC. If the black bean price increases, Bill’s budget
constraint will be
A) 0D.
B) AB.
C) AC.
D) AD.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
54) Refer to Figure 6.4. Bill’s budget constraint is AC. If the bell peppers price decreases, Bill’s budget
constraint will be
A) AB.
B) AC.
C) AD.
D) The budget constraint is not depicted on the diagram.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
55) Refer to Figure 6.4. Bill’s budget constraint is AC. His budget constraint would shift to AD if the price
of
A) black beans increased.
B) black beans decreased.
C) bell peppers increased.
D) bell peppers decreased.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
18
56) If a household‘s income doubles, its budget constraint will
A) shift out parallel to the old one.
B) pivot at the Y–intercept.
C) shift in parallel to the old one.
D) be unaffected.
Topic: Household Choices in Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro–10
57) If a household‘s income falls by 10%, its budget constraint will
A) shift out parallel to the old one.
B) pivot at the Y–intercept.
C) shift in parallel to the old one.
D) be unaffected.
Topic: Household Choices in Output Markets
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro–10
19
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow.
Figure 6.5
58) Refer to Figure 6.5. Molly’s budget constraint is BD. If the price of CDs decreases, her new budget
constraint becomes
A) AD.
B) A0.
C) CD.
D) EF.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
59) Refer to Figure 6.5. Molly’s budget constraint is BD. If the price of CDs increases, her new budget
constraint becomes
A) AD.
B) BD.
C) CD.
D) EF.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
20
60) Refer to Figure 6.5. Molly’s budget constraint is CD. If her income increases, her new budget
constraint is
A) AD.
B) BD.
C) EF.
D) It is not shown on this graph.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
61) Refer to Figure 6.5. Molly’s budget constraint is EF. If her income decreases while the price of the
goods is unchanged, her new budget constraint could be
A) AD.
B) BD.
C) CD.
D) not shown on this graph.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
62) Refer to Figure 6.5. Molly’s budget constraint is EF. If her income decreases and the price of CDs
increases, her new budget constraint could be
A) CD.
B) BD.
C) AD.
D) Both B and C are correct.
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
63) Refer to Figure 6.5. Molly’s budget constraint is BD. Molly’s income is $400, the price of a DVD is $15
and the price of a CD is $20. At point B the consumer is buying ________ DVDs and ________ CDs.
A) 0; 20
B) 20; 0
C) 20; 15
D) 40; 30
Topic: Household Choices in Output Markets
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2