Economics Appendix N The Marginal Rate Substitution Apples Place Oranges

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68. Multiple Choice: If you are willing to give up 15 unit...

Question If you are willing to give up 15 units of good A (on the vertical axis) for 5 units of good

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

rate of substitution of B for A is:

69. Multiple Choice: If you are willing to give up 8 units…

Question If you are willing to give up 8 units of good A (on the vertical axis) for 4 units of good

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

rate of substitution of B for A is:

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

Question Which of the following statements is true?

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71. Multiple Choice: The _________ is the maximum amount o...

Question The _________ is the maximum amount of good X a consumer would be willing to

give up in order to obtain an additional unit of good Y:

72. Multiple Choice: Rhonda spends all her income on two g…

Question Rhonda spends all her income on two goods: clothes and CDs. Suppose this

situation were graphed with clothes on the vertical axis and CDs on the horizontal

axis. Rhonda consumes a bundle of the two goods whose indifference curve is flatter

than the budget line. To increase total utility given her income, Rhonda should:

73. Multiple Choice: A consumer maximizes utility, given h...

Question A consumer maximizes utility, given her income, when she chooses a consumption

bundle whose:

74. Multiple Choice: An individual consuming two goods, X …

Question

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An individual consuming two goods, X and Y, has the usual downward-sloping,

convex indifference curves. All except one of the following will characterize the

optimal consumption point. Which is the exception?

75. Multiple Choice: If the combination of two goods occur...

Question If the combination of two goods occurs at a point of tangency between the budget

line and an indifference curve, then:

76. Multiple Choice: When consumers maximize utility, they…

Question When consumers maximize utility, they try to obtain:

77. Multiple Choice: Assume that a combination of two good...

Question Assume that a combination of two goods reflects a point of tangency between the

budget line and an indifference curve. In this situation, which of the following is

incorrect?

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78. Multiple Choice: In terms of indifference curves, the ...

Question In terms of indifference curves, the optimal consumption bundle is determined by

the:

79. Multiple Choice: If the combination of two goods occur...

Question If the combination of two goods occurs at a point of tangency between the budget

line and an indifference curve, then:

80. Multiple Choice: If the price of a ticket to a Minneso…

Question If the price of a ticket to a Minnesota Wild Hockey game equals $60 and the price of

a snow shovel equals $40, the relative price of the hockey ticket equals:

81. Multiple Choice: If the price of a cookie is $1 and th...

Question If the price of a cookie is $1 and the price of a brownie is $2, the relative price of

cookies in terms of brownies is:

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82. Multiple Choice: If the price of a cookie is $2 and th...

Question If the price of a cookie is $2 and the price of a brownie is $4, the relative price of

cookies in terms of brownies is:

83. Multiple Choice: Sandy has a monthly income of $4,000....

Question Sandy has a monthly income of $4,000. She spends her income on business suits

and prepared organic meals. The price of a business suit is $1,000 and the price of

prepared meals is $50. If we plot business suits on the vertical axis, the slope of

Sandy’s budget line is equal to:

84. Multiple Choice: Figure: A Budget Constraint for CDs a…

Question

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Figure: A Budget Constraint for CDs and Movies

Reference: Ref 10–6

(Figure: A Budget Constraint for CDs and Movies) Look at the figure A Budget

Constraint for CDs and Movies. Chantal likes to spend her weekly income on new

CDs and tickets to see movies. The price of a CD is $12 and the movie ticket price

is $10. The graph shows Chantal’s budget line. What is her weekly income?

85. Multiple Choice: Figure: The Optimal Choice of CDs and...

Question Figure: The Optimal Choice of CDs and Movies

Reference: Ref 10–7

(Figure: The Optimal Choice of CDs and Movies) Look at the figure The Optimal

Choice of CDs and Movies. Nina likes to spend her income on new CDs (CD) and

tickets to see movies (M). The graph shows Nina’s budget line and the optimal

consumption bundle E. What is the relative price of movies in terms of CDs at point

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86. Multiple Choice: According to the relative price rule,…

Question According to the relative price rule, the optimal consumption bundle between hot

dogs and beer takes place when the ________ rate of substitution is ________ their

relative price.

87. Multiple Choice: The relative price rule says that at ...

Question The relative price rule says that at the optimal consumption bundle the marginal rate

of substitution between two goods must be equal to their relative price. This is

equivalent to saying that:

88. Multiple Choice: After learning about indifference cur…

Question After learning about indifference curves, Sandy realizes that her marginal rate of

substitution of grapes for cheese is equal to 2. Since the price of cheese is $3 and

the price of grapes is $1, Sandy:

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89. Multiple Choice: While at the grocery store, Sidney se…

Question While at the grocery store, Sidney sees that the price of Grape-Nuts is twice that of

Cheerios. If Sidney buys both goods, then Sidney must:

90. Multiple Choice: At the optimal consumption bundle, wh…

Question At the optimal consumption bundle, which of the following conditions does not hold?

91. Multiple Choice: If the marginal rate of substitution ...

Question If the marginal rate of substitution of cookies for brownies equals the relative price of

cookies in terms of brownies when the consumer is on the budget line, the

consumer:

92. Multiple Choice: Joseph chooses a combination of apple…

Question Joseph chooses a combination of apples and oranges along his budget line. The

marginal rate of substitution of apples for oranges is 2, the price of an apple is

$0.50, and the price of an orange is $1.50. Joseph:

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93. Multiple Choice: Joseph chooses a combination of apple…

Question Joseph chooses a combination of apples and oranges along his budget line. The

marginal rate of substitution of apples in place of oranges is 2, the price of an apple

is $0.50, and the price of an orange is $0.50. Joseph:

94. Multiple Choice: Joseph chooses a combination of apple…

Question Joseph chooses a combination of apples and oranges along his budget line. The

marginal rate of substitution of apples in place of oranges is 2, the price of an apple

is $0.50, and the price of an orange is $0.25. Joseph:

95. Multiple Choice: Joseph chooses a combination of apple…

Question Joseph chooses a combination of apples and oranges along his budget line. the

marginal rate of substitution of apples in place of oranges is 2, the price of an apple

is $0.50, and the price of an orange is $0.10. Joseph:

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96. Multiple Choice: Gillian is consuming her optimal cons...

Question Gillian is consuming her optimal consumption bundle of peanuts and raisins. The

marginal utility associated with the last peanut she consumes is 4 utils, and the

marginal utility associated with the last raisin is 2 utils. What must be the price of

peanuts relative to that of raisins?

97. Multiple Choice: Luis is consuming his optimal consump...

Question Luis is consuming his optimal consumption bundle of pizza and tacos. The marginal

utility associated with the last pizza he consumes is 1 util, and the marginal utility

associated with the last taco is 3 utils. What must be the relative price of pizza in

terms of tacos?

98. Multiple Choice: Margo has a monthly income of $60 to ...

Question Margo has a monthly income of $60 to spend on cups of coffee or bagels. Each cup

of coffee costs $3 and each bagel costs $4. Margo spends all of her income, and at

her consumption bundle, she is willing to forgo 1 bagel to get the next cup of coffee

to achieve the same level of utility. To maximize her utility, Margo should:

Points: 0

99. Multiple Choice: Figure: The Indifference Curve Map II...

Question Figure: The Indifference Curve Map II

Reference: Ref 10–8

(Figure: The Indifference Curve Map II) Look at the figure The Indifference Curve Map

II. Sara enjoys attending Chicago Cubs‘ baseball games and eating babyback rib

dinners. The figure shows two of her indifference curves for Cubs‘ tickets and

babyback rib dinners. Which of the following combinations gives Sara the highest

level of utility?

100. Multiple Choice: Figure: The Indifference Curve Map II…

Question

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Figure: The Indifference Curve Map II

Reference: Ref 10–8

(Figure: The Indifference Curve Map II) Look at the figure The Indifference Curve Map

II. Sara enjoys attending Chicago Cubs‘ baseball games and eating babyback rib

dinners. The figure shows two of her indifference curves for Cubs‘ tickets and

babyback rib dinners. If she consumes 20 baby back rib dinners and 4 tickets to

Cubs‘ games, she would be equally happy to give up 8 dinners for ________ more

ticket(s) to Cubs‘ games.

101. Multiple Choice: Figure: The Indifference Curve Map II…

Question

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Figure: The Indifference Curve Map II

Reference: Ref 10–8

(Figure: The Indifference Curve Map II) Look at the figure The Indifference Curve Map

II. Sara enjoys attending Chicago Cubs‘ baseball games and eating baby back rib

dinners. The figure shows two of her indifference curves for Cubs‘ tickets and baby

back rib dinners. If she consumes 20 baby back rib dinners and 6 tickets to Cubs‘

games, she would be equally happy to give up 8 dinners for ________ more ticket(s)

to Cubs‘ games.

102. Multiple Choice: Figure: The Indifference Curve Map II…

Question

Points: 0

Figure: The Indifference Curve Map II

Reference: Ref 10–8

(Figure: The Indifference Curve Map II) Look at the figure The Indifference Curve Map

II. Sara enjoys attending Chicago Cubs‘ baseball games and eating babyback rib

dinners. The figure shows two of her indifference curves for Cubs‘ tickets and

babyback rib dinners. If a new health report is released stating that there is a

connection between babyback rib dinners and heart attacks, and this concerns

Sara, each combination of Cubs‘ tickets and babyback ribs will now yield ________

for Sara.

103. Multiple Choice: Figure: Consumer Equilibrium IThe fig...

Question

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Figure: Consumer Equilibrium I

The figure shows three of Owen’s indifference curves for pizza and soda per week.

Owen has $180 per month to spend on the two goods, and the price of a pizza is

$20 and the price of a soda is $1.50.

Reference: Ref 10–9

(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. What is

Owen’s optimal consumption bundle?

104. Multiple Choice: Figure: Consumer Equilibrium IThe fig...

Question

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Figure: Consumer Equilibrium I

The figure shows three of Owen’s indifference curves for pizza and soda per week.

Owen has $180 per month to spend on the two goods, and the price of a pizza is

$20 and the price of a soda is $1.50.

Reference: Ref 10–9

(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. If Owen

consumes 1.5 pizzas and 100 sodas, which of the following is true?

105. Multiple Choice: Figure: Consumer Equilibrium IThe fig...

Question

Points: 0

Figure: Consumer Equilibrium I

The figure shows three of Owen’s indifference curves for pizza and soda per week.

Owen has $180 per month to spend on the two goods, and the price of a pizza is

$20 and the price of a soda is $1.50.

Reference: Ref 10–9

(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. If Owen

consumes 1.5 pizzas and 100 sodas, which of the following describes the

relationship between his marginal rate of substitution of pizza in place of soda and

the relative price of pizza in terms of soda?

106. Multiple Choice: Figure: Consumer Equilibrium IThe fig...

Question

Points: 0

Figure: Consumer Equilibrium I

The figure shows three of Owen’s indifference curves for pizza and soda per week.

Owen has $180 per month to spend on the two goods, and the price of a pizza is

$20 and the price of a soda is $1.50.

Reference: Ref 10–9

(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. What is

Owen’s marginal rate of substitution of pizza in place of soda when he is consuming

his optimal consumption bundle?

107. Multiple Choice: Figure: Consumer Equilibrium IThe fig...

Question

Points: 0

Figure: Consumer Equilibrium I

The figure shows three of Owen’s indifference curves for pizza and soda per week.

Owen has $180 per month to spend on the two goods, and the price of a pizza is

$20 and the price of a soda is $1.50.

Reference: Ref 10–9

(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. If in

equilibrium, Owen receives marginal utility of 10 utils from the last pizza he

consumes, his marginal utility from the last soda must be ________ utils.

108. 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. If honey is three times as

expensive as sugar, LaToya will use:

109. 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. If the price of honey is half

that of sugar, LaToya will use:

Points: 0

110. 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. If honey is twice as

expensive as sugar, LaToya will:

111. Multiple Choice: If Coke and Pepsi are perfect substit…

Question If Coke and Pepsi are perfect substitutes for Lynn, her indifference curves are:

112. Multiple Choice: Jake considers fries and onion rings …

Question Jake considers fries and onion rings perfect substitutes. The indifference curve

between fries and onion rings must be:

Points: 0