Economics Appendix N Multiple Choice Curve That Represents Combinations

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Test Canvas : TestBanks Chapter 10 Appendix: Consum er Preferences and

Consum er Choice

Microeconom ics, 3e

Test Canvas: TestBanks Chapter 10 Appendix: Consumer

Preferences and Consumer Choice

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1. True/False: One point on an indifference curve dr...

Question One point on an indifference curve drawn between mangoes and vegetable broth is

the consumption bundle consisting of five mangoes and three boxes of vegetable

broth. This means that Sharri is indifferent between five mangoes and three boxes of

vegetable broth.

2. True/False: As an individual moves down his or he…

Question As an individual moves down his or her indifference curve, total utility remains

constant.

3. True/False: Suppose Joe derives 327 utils from co…

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Question Suppose Joe derives 327 utils from consuming 1 dozen crab cakes and 11 pairs of

socks. If he also derives 327 utils from 2 dozen crab cakes and 5 pairs of socks,

Joe is indifferent between those combinations of crab cakes and socks.

4. True/False: The following bundles can all be on t…

Question The following bundles can all be on the same indifference curve. Bundle A: 4

enchiladas, 1 burrito; Bundle B: 3 enchiladas, 3 burritos; Bundle C: 2 enchiladas, 2

burritos.

5. True/False: Maria derives 288 utils from buying t...

Question Maria derives 288 utils from buying two pairs of hiking boots and four saws. She

gets 313 utils from buying one pair of hiking boots and seven saws. Maria is

indifferent between these two combinations of hiking boots and saws.

6. True/False: Janella consumes only bananas and pas…

Question Janella consumes only bananas and passion fruit. It is not possible for Janella’s

indifference curves to cross one another at any point.

7. True/False: The assumption that “the farthe…

Question The assumption that “the farther from the origin an indifference curve is, the higher

the level of utility it indicates” implies “more is better.”

8. True/False: Due to diminishing marginal utility, …

Question Due to diminishing marginal utility, indifference curves are convex to the origin.

9. True/False: Diminishing marginal utility occurs w...

Question Diminishing marginal utility occurs with increasing total utility.

Points: 0

10. True/False: Shirley knows her marginal rate of su…

Question Shirley knows her marginal rate of substitution of mangos in place of bananas is

equal to three. The price of bananas is $0.50 and the price of mangos is $1.00.

Shirley should buy more mangos.

11. True/False: At the video store, Lucian narrows hi...

Question At the video store, Lucian narrows his selection to either a $2 videocassette of The

Evil Dead or a $4 DVD of Finding Nemo. Lucian finally flips a coin to decide which

movie to rent. This must mean that Lucian‘s marginal rate of substitution of The Evil

Dead for Finding Nemo is 0.5.

False

12. True/False: Henry and Anne have identical incomes…

Question Henry and Anne have identical incomes. Both buy only sardines and ice cream.

Since they face the same prices for the two goods, their optimal consumption

bundles must be identical.

13. True/False: Mr. Coiner is always willing to excha…

Question Mr. Coiner is always willing to exchange two nickels for a dime, no matter how

many nickels and dimes he has. This implies that nickels and dimes are ordinary

goods for Mr. Coiner.

14. True/False: Pooh spends all his income on honey a...

Question Pooh spends all his income on honey and maple syrup. Because he views honey

and maple syrup as perfect substitutes, he is willing to substitute honey for maple

syrup at the constant rate of 1 teaspoon of honey to 2 teaspoons of maple syrup. If

the relative price of honey in terms of maple syrup is 2.2, Pooh’s optimal

consumption bundle will consist entirely of maple syrup.

15. True/False: Ms. Stardoe gets utility from coffee …

Question Ms. Stardoe gets utility from coffee and cream, but only if they are consumed in the

precise ratio of 8 ounces of coffee to 2 ounces of cream. This implies that coffee and

cream are ordinary goods for Ms. Stardoe.

Points: 0

16. True/False: If Ian‘s indifference curve between g…

Question If Ian‘s indifference curve between guitars and Cadillacs is shaped like a right angle,

then he considers the two goods perfect complements.

17. True/False: Miguel only eats burgers with onion r...

Question Miguel only eats burgers with onion rings. Miguel’s indifference curve between

burgers and onion rings must be a straight line.

18. True/False: When we graphically isolate the subst…

Question When we graphically isolate the substitution effect of a change in the price of one

good, utility is held constant.

19. True/False: A Giffen good is an inferior good for…

Question A Giffen good is an inferior good for which the income effect dominates the

substitution effect.

20. Multiple Choice: An indifference curve is a line that ...

Question An indifference curve is a line that shows all of the consumption bundles that:

21. Multiple Choice: When Laurie asks Matt if he wants a l...

Question When Laurie asks Matt if he wants a large popcorn and small soda or a large soda

and small popcorn, Matt says, “Oh, I‘m indifferent.” This means Matt:

Points: 0

22. Multiple Choice: Figure and Table: An Indifference Cur…

Question Figure and Table: An Indifference Curve Map

Reference: Ref 10-1

(Figure and Table: Indifference Curve Map) Look at the figure An Indifference Curve

Map. Which of the following statements is true?

23. Multiple Choice: Combinations of two goods that yield …

Question Combinations of two goods that yield equal levels of utility are shown on a(n)

________ curve.

Points: 0

24. Multiple Choice: The slope of a(n) ________ curve show…

Question The slope of a(n) ________ curve shows the rate at which two goods can be

exchanged ________ the consumer‘s ________.

25. Multiple Choice: An indifference curve shows combinati...

Question An indifference curve shows combinations of two goods that yield:

26. Multiple Choice: If a consumer moves upward along an i…

Question If a consumer moves upward along an indifference curve, his or her total utility:

27. Multiple Choice: If two combinations of two goods yiel…

Question

Points: 0

If two combinations of two goods yield the same level of satisfaction, then they are

on:

28. Multiple Choice: Higher indifference curves represent:

Question Higher indifference curves represent:

29. Multiple Choice: In terms of indifference curves, an i...

Question In terms of indifference curves, an increase in total utility is represented by a:

30. Multiple Choice: If combination A lies on a higher ind...

Question If combination A lies on a higher indifference curve than combination B and

combination B lies on a higher indifference curve than combination C, it must be that

the total utility associated with combination A is ________ the total utility

associated with combination C.

Points: 0

31. Multiple Choice: A(n) ________ is a curve that shows a...

Question A(n) ________ is a curve that shows all of the consumption bundles that yield the

same level of total utility for an individual.

32. Multiple Choice: Reference: Ref 10-2 (Table: Bundles ...

Question

Reference: Ref 10-2

(Table: Bundles of X and Y) Look at the table Bundles of X and Y. A consumer can

choose among combinations of goods X and Y. The table documents several

bundles of X and Y and the utility produced by those combinations. Given this

information, it can be said that:

33. Multiple Choice: Reference: Ref 10-2 (Table: Bundles ...

Question

Points: 0

Reference: Ref 10-2

(Table: Bundles of X and Y) Look at the table Bundles of X and Y. A consumer can

choose among combinations of goods X and Y. The table documents several

bundles of X and Y and the utility produced by those combinations. Given this

information, it can be said that:

34. Multiple Choice: Consumption bundles that yield equal ...

Question Consumption bundles that yield equal levels of total utility are shown on ________.

35. Multiple Choice: If a consumer moves downward along an…

Question If a consumer moves downward along an indifference curve, his or her total utility:

36. Multiple Choice: Assume that two combinations of two g…

Points: 0

Question Assume that two combinations of two goods yield the same level of satisfaction. We

can conclude that these combinations are on:

37. Multiple Choice: A curve that represents combinations …

Question A curve that represents combinations of two goods that yield equal levels of

satisfaction isa(n):

38. Multiple Choice: Which of the following statements is ...

Question Which of the following statements is true?

39. Multiple Choice: In terms of indifference curves, high...

Question In terms of indifference curves, higher total utility is represented by:

Points: 0

40. Multiple Choice: Greater levels of utility are represe…

Question Greater levels of utility are represented by:

41. Multiple Choice: Two points on a standard indifference…

Question Two points on a standard indifference curve are 8 cookies and 2 brownies, and 6

cookies and 4 brownies. Which of the following combinations of cookies and

brownies could lie on this indifference curve?

42. Multiple Choice: Figure: Indifference Curve Map I Refe…

Question

Points: 0

Figure: Indifference Curve Map I

Reference: Ref 10-3

(Figure: Indifference Curve Map I) Look at the figure Indifference Curve Map I. Keisha

can choose between combinations of e-Books and cell phone apps. The figure

shows an indifference curve map that identifies several bundles of e-Books and cell

phone apps. Given this information, it can be said that:

43. Multiple Choice: Figure: Indifference Curve Map I Refe…

Question Figure: Indifference Curve Map I

Reference: Ref 10-3

(Figure: Indifference Curve Map I) Look at the figure Indifference Curve Map I. Keisha

can choose between combinations of e-Books and cell phone apps. The figure

shows an indifference curve map that identifies several bundles of e-Books and cell

phone apps. Given this information, it can be said that:

Points: 0

44. Multiple Choice: For most goods, indifference curves:

Question For most goods, indifference curves:

45. Multiple Choice: For most goods, as we move down an in...

Question For most goods, as we move down an indifference curve:

46. Multiple Choice: Which of the following is not true of...

Question Which of the following is not true of indifference curves for ordinary goods?

47. Multiple Choice: Which of the following statements is ...

Points: 0

Question Which of the following statements is correct?

Answer The slope of an indifference curve shows the rate at which two goods can be

exchanged without changing the total budget.

48. Multiple Choice: An indifference curve typically:

Question An indifference curve typically:

49. Multiple Choice: Two points on an indifference curve t...

Question Two points on an indifference curve that displays a diminishing marginal rate of

substitution between apples and oranges are (10 apples and 2 oranges), (8 apples

and 4 oranges). Which of the following combinations of apples and oranges could

also lie on this indifference curve?

50. Multiple Choice: Manny consumes only bananas and DVDs,...

Question Manny consumes only bananas and DVDs, and he is on his highest possible

indifference curve. Two bundles on this indifference curve are bundle A (5 bananas

and 2 DVDs), and bundle B (3 bananas and 3 DVDs). Between points A and B, what

is Manny‘s marginal rate of substitution of bananas for DVDs?

Points: 0

51. Multiple Choice: Max consumes only yogurt and almonds,…

Question Max consumes only yogurt and almonds, and he is on his highest possible

indifference curve. Two bundles on this indifference curve are bundle A (4 yogurts

and 2 almonds), bundle B (3 yogurts and 3 almonds). Between points A and B, what

is Max’s marginal rate of substitution of yogurt for almonds?

52. Multiple Choice: LaToya sees honey and sugar as perfec...

Question LaToya sees honey and sugar as perfect substitutes. She is always willing to

substitute 1 teaspoon of honey for 2 teaspoons of sugar. The marginal rate of

substitution of sugar for honey is equal to:

53. Multiple Choice: The principle of ________ marginal ra...

Question The principle of ________ marginal rate of substitution states that the more

chocolate Susan consumes in proportion to coffee, the ________ coffee she is

willing to substitute for another piece of chocolate.

Points: 0

54. Multiple Choice: Indifference curves that are convex t...

Question Indifference curves that are convex to the origin imply which of the following?

55. Multiple Choice: The marginal rate of substitution sho…

Question The marginal rate of substitution shows how a consumer can substitute between two

goods to:

56. Multiple Choice: Figure: Indifference Curves and Consu…

Question

Points: 0

Figure: Indifference Curves and Consumption Bundles

Reference: Ref 10-4

(Figure: Indifference Curves and Consumption Bundles) Let MUP = marginal utility of

pizza, MUH = marginal utility of hot dogs, PP = price of a slice of pizza, PH = price

of a hot dog. In the figure, the absolute value of the slope of an indifference curve is

equal to:

57. Multiple Choice: Indifference curves that exhibit a di...

Question Indifference curves that exhibit a diminishing marginal rate of substitution are:

58. Multiple Choice: If you are willing to give up 10 shir…

Question If you are willing to give up 10 shirts (on the vertical axis) for 5 pairs of pants (on the

horizontal axis), and your level of satisfaction is unchanged, the marginal rate of

substitution is:

Points: 0

59. Multiple Choice: As a consumer moves upward along an i…

Question As a consumer moves upward along an indifference curve, giving up some of X (on

the horizontal axis) to get more of Y (on the vertical axis), his or her marginal rate of

substitution of X for Y:

60. Multiple Choice: If you are willing to give up 5 units...

Question If you are willing to give up 5 units of good Y (on the vertical axis) for 5 units of good

X (on the horizontal axis) and your level of satisfaction is unchanged, the marginal

rate of substitution is:

61. Multiple Choice: The marginal rate of substitution ass...

Question The marginal rate of substitution assumes that:

Points: 0

62. Multiple Choice: The maximum amount of one good a cons…

Question The maximum amount of one good a consumer would be willing to give up to obtain

an additional unit of another is called the:

63. Multiple Choice: Ersida purchases both baby food (F) a...

Question Ersida purchases both baby food (F) and cloth diapers (C). The price of a jar of baby

food is PF and the price of a box of cloth diapers is PC. At any point on an

indifference curve, the marginal rate of substitution for food and clothing can be

represented by:

64. Multiple Choice: Reference: Ref 10-5 (Table: Food and...

Question

Reference: Ref 10-5

(Table: Food and Clothing Bundles) Teddy enjoys consuming food and clothing. The

table shows five bundles of food and clothing that all provide Teddy with the same

amount of utility. The marginal rate of substitution of food for clothing as Teddy

moves from bundle D to bundle E is equal to:

Points: 0

65. Multiple Choice: Reference: Ref 10-5 (Table: Food and...

Question

Reference: Ref 10-5

(Table: Food and Clothing Bundles) Teddy enjoys consuming food and clothing. The

table shows five bundles of food and clothing that all provide Teddy with the same

amount of utility. If units of food were put on the horizontal axis, what does this table

tell us about the shape of Teddy‘s indifference curve?

66. Multiple Choice: A decreasing marginal rate of substit...

Question A decreasing marginal rate of substitution indicates that an indifference curve is:

Answer a straight line.

67. Multiple Choice: As a consumer gives up some of good A…

Question As a consumer gives up some of good A to get more of good B, his or her marginal

rate of substitution of good A for good B:

Answer becomes infinite.

Points: 0