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85. Consider the indifference curve map for nickels and quarters. Assume nickels are on the horizontal axis and quarters
are on the vertical axis. The indifference curves for nickels and quarters are
a.
straight lines with slope of -1/5.
b.
straight lines with a slope of -1.
c.
straight lines with a slope of -5.
d.
L shaped.
86. A consumer’s preferences for $1 bills and $20 bills can be represented by indifference curves that are
a.
bowed out from the origin.
b.
bowed in toward the origin.
c.
straight lines.
d.
right angles.
87. When two goods are perfect substitutes, the indifference curve is
a.
a horizontal straight line.
b.
bowed outward.
c.
a downward-sloping straight line.
d.
a right angle.
88. When two goods are perfect substitutes, the
a.
indifference curve is a horizontal straight line.
b.
marginal rate of substitution is constant.
c.
indifference curve is a vertical straight line.
d.
Both a and b are correct.
89. When two goods are perfect substitutes, the
a.
indifference curve is a downward-sloping straight line.
b.
marginal rate of substitution is constant.
c.
indifference curve is a vertical straight line.
d.
Both a and b are correct.
90. Suppose Caroline is indifferent between tea and coffee as long as she consumes an equivalent amount of caffeine.
Suppose that coffee has twice as much caffeine as tea. Which graph would illustrate a representative indifference curve?
a.
b.
c.
d.
91. Suppose Caroline will only drink a cup of coffee if she can add two packets of sugar to it. Which graph would
illustrate a representative indifference curve?
a.
b.
c.
d.
92. Suppose that Sam likes pears twice as much as apples, meaning that he is always indifferent between consuming one
pear or two apples. Sam’s indifference curves for pears and apples are
a.
right angles.
b.
bowed inward.
c.
bowed outward.
d.
downward-sloping straight lines.
93. When two goods are perfect complements, the indifference curve is
a.
a horizontal straight line.
b.
bowed outward.
c.
a downward-sloping straight line.
d.
a right angle.
94. A consumer’s preferences for right shoes and left shoes can be represented by indifference curves that are
a.
bowed out from the origin
b.
bowed in toward the origin
c.
straight lines
d.
right angles
95. When two goods are perfect complements, the indifference curves will
a.
have a positive slope.
b.
be right angles.
c.
have a constant marginal rate of substitution.
d.
Both b and c are correct.
96. "Left" gloves and "right" gloves provide a good example of
a.
perfect substitutes.
b.
perfect complements.
c.
negatively sloped indifference curves.
d.
positively sloped indifference curves.
97. When two goods are perfect complements, the indifference curves are
a.
positively sloped.
b.
negatively sloped.
c.
straight lines.
d.
right angles.
98. Suppose Dave always uses two lemon wedges with his glass of iced tea. Dave's indifference curves for lemon wedges
and iced tea are
a.
bowed inward.
b.
bowed outward.
c.
straight lines.
d.
L shaped.
99. A consumer likes two goods: pizza and beer. The four bundles shown in the table below lie on the same indifference
curve for the consumer.
Bundle
Pizza
Beer
A
6
9
B
6
7
C
6
5
D
9
5
E
10
5
Which of the following statements regarding these bundles is correct?
a.
The goods are perfect substitutes for this consumer.
b.
The goods are perfect complements for this consumer.
c.
These bundles illustrate the property that indifference curves are bowed inward.
d.
These bundles violate the property that indifference curves do not cross.
100. A consumer likes two goods: hamburgers and watermelons. The five bundles shown in the table below lie on the
same indifference curve for the consumer.
Bundle
Hamburgers
Watermelons
A
10
3
B
5
3
C
3
3
D
3
5
E
3
10
Which of the following statements regarding these bundles is correct?
a.
The goods are perfect substitutes for this consumer.
b.
The goods are perfect complements for this consumer.
c.
The bundles violate the property that indifference curves do not cross.
d.
Both b) and c) are correct.
101. Suppose that Milton likes to consume one glass of milk with every three chocolate chip cookies. For Milton, an
additional cookie has no value unless he can consume it with the appropriate proportion of milk. Milton’s indifference
curves for milk and cookies are
a.
right angles.
b.
bowed inward.
c.
bowed outward.
d.
downward-sloping straight lines.
102. If Hector’s marginal rate of substitution between pens and pencils is constant, regardless of how many pens and
pencils he has, then his indifference curves
a.
are right angles.
b.
are straight lines.
c.
slope upward.
d.
cross one another at certain points.
103. If Priscilla regards cheese and crackers as perfect complements, then
a.
her indifference curves slope upward.
b.
her indifference curves are straight lines.
c.
Priscilla prefers lower indifference curves to higher ones.
d.
for Priscilla a bundle of 5 crackers and 5 ounces of cheese is just as good as a bundle of 5 crackers and 8
ounces of cheese.
104. Hold Jared’s preferences for pizza and Pepsi constant. Suppose Jared’s income, as well as the prices of pizza and
Pepsi, double. As a result,
a.
both Jared’s indifference curves and his budget constraint change.
b.
Jared’s indifference curves change, but his budget constraint does not change.
c.
Jared’s budget constraint changes, but his indifference curves do not change.
d.
neither Jared’s indifference curves nor his budget constraint change.
105. On a graph we draw indifference curves to illustrate Steven’s preferences for steak and broccoli. If two of Steven’s
indifference curves cross, then it cannot be the case that Steven
a.
regards steak and broccoli as complements.
b.
spends more of his income on steak than on broccoli.
c.
likes steak and likes broccoli.
d.
always prefers more steak to less steak and more broccoli to less broccoli.
106. Hold the prices of goods, as well as Amy’s preferences, constant. If Amy’s income increases, then
a.
both her indifference curves and budget constraint change.
b.
her indifference curves change, but her budget constraint does not change.
c.
her budget constraint changes, but her indifference curves do not change.
d.
neither her indifference curves nor her budget constraint change.
107. What is an individual's marginal rate of substitution between nickels and dollar bills? Assume the individual only
cares about the monetary value of each bundle.
a.
5
b.
10
c.
20
d.
100
108. Suppose Alyssa likes oranges twice as much as apples, no matter how many apples or oranges she has. Her
indifference curves for oranges and apples
a.
are right angles.
b.
are straight lines.
c.
slope upward.
d.
cross one another at certain points.
109. Which of the following best describes why indifference curves cannot cross?
a.
If indifference curves cross, there are situations where individuals are indifferent between bundles where one
bundle contains strictly more of both goods than the other bundle.
b.
If indifference curves cross, individuals are not necessarily consuming along their budget line.
c.
If indifference curves cross, the marginal rate of substitution can be both increasing and decreasing at a
specific point.
d.
If indifference curves cross, the goods can be both substitutes and complements.
