CHAPTER 3: Preferences
MULTIPLE CHOICE
1. In Problem 1, Charlie’s indifference curves have the equation xB = constant/xA, where larger constants
correspond to better indifference curves. Charlie strictly prefers the bundle (5, 13) to the bundle
a.
(13, 5).
b.
(6, 12).
c.
(11, 8).
d.
All of the above.
e.
None of the above.
2. In Problem 1, Charlie’s indifference curves have the equation xB = constant/xA, where larger constants
correspond to better indifference curves. Charlie strictly prefers the bundle (6, 15) to the bundle
a.
(15, 6).
b.
(7, 14).
c.
(11, 13).
d.
All of the above.
e.
None of the above.
3. In Problem 1, Charlie’s indifference curves have the equation xB = constant/xA, where larger constants
correspond to better indifference curves. Charlie strictly prefers the bundle (8, 13) to the bundle
a.
(14, 7).
b.
(9, 12).
c.
(13, 8).
d.
All of the above.
e.
None of the above.
4. In Problem 1, Charlie’s indifference curves have the equation xB = constant/xA, where larger constants
correspond to better indifference curves. Charlie strictly prefers the bundle (5, 14) to the bundle
a.
(6, 13).
b.
(14, 5).
c.
(11, 11).
d.
All of the above.
e.
None of the above.
5. In Problem 1, Charlie’s indifference curves have the equation xB = constant/xA, where larger constants
correspond to better indifference curves. Charlie strictly prefers the bundle (9, 17) to the bundle
a.
(17, 9).
b.
(14, 14).
c.
(10, 16).
d.
All of the above.
e.
None of the above.
6. In Problem 2, Ambrose has indifference curves with the equation x2 = constant − 4x1/21, where larger
constants correspond to higher indifference curves. If good 1 is drawn on the horizontal axis and good
2 on the vertical axis, what is the slope of Ambrose’s indifference curve when his consumption bundle
is (4, 11)?
a.
−4/11
b.
−11/4
c.
−1
d.
−13
e.
−2
7. In Problem 2, Ambrose has indifference curves with the equation x2 = constant − 4x1/21, where larger
constants correspond to higher indifference curves. If good 1 is drawn on the horizontal axis and good
2 on the vertical axis, what is the slope of Ambrose’s indifference curve when his consumption bundle
is (36, 10)?
a.
−0.33
b.
−16
c.
−36/10
d.
−10/36
e.
−6
8. In Problem 2, Ambrose has indifference curves with the equation x2 = constant − 4x1/21, where larger
constants correspond to higher indifference curves. If good 1 is drawn on the horizontal axis and good
2 on the vertical axis, what is the slope of Ambrose’s indifference curve when his consumption bundle
is (16, 10)?
a.
−0.50
b.
−16/10
c.
−10/16
d.
−14
e.
−4
9. In Problem 2, Ambrose has indifference curves with the equation x2 = constant − 4x1/21, where larger
constants correspond to higher indifference curves. If good 1 is drawn on the horizontal axis and good
2 on the vertical axis, what is the slope of Ambrose’s indifference curve when his consumption bundle
is (1, 11)?
a.
−1/11
b.
−11/1
c.
−12
d.
−2
e.
−1
10. In Problem 2, Ambrose has indifference curves with the equation x2 = constant − 4x1/21, where larger
constants correspond to higher indifference curves. If good 1 is drawn on the horizontal axis and good
2 on the vertical axis, what is the slope of Ambrose’s indifference curve when his consumption bundle
is (9, 19)?
a.
−9/19
b.
−19/9
c.
−0.67
d.
−22
e.
−3
11. In Problem 8, Nancy Lerner is taking a course from Professor Goodheart who will count only her best
midterm grade and from Professor Stern who will count only her worst midterm grade. In one of her
classes, Nancy has scores of 20 on her first midterm and 30 on her second midterm. When the first
midterm score is measured on the horizontal axis and her second midterm score on the vertical, her
indifference curve has a slope of zero at the point (20, 30). This class could
a.
be Professor Goodheart’s but could not be Professor Stern’s.
b.
be Professor Stern’s but could not be Professor Goodheart’s.
c.
not be either Professor Goodheart’s or Professor Stern’s.
d.
be either Professor Goodheart’s or Professor Stern’s.
e.
There is not enough information to tell whose class it could or couldn’t be.
12. In Problem 8, Nancy Lerner is taking a course from Professor Goodheart who will count only her best
midterm grade and from Professor Stern who will count only her worst midterm grade. In one of her
classes, Nancy has scores of 70 on her first midterm and 30 on her second midterm. When the first
midterm score is measured on the horizontal axis and her second midterm score on the vertical, her
indifference curve has a slope of zero at the point (70, 30). This class could
a.
not be either Professor Goodheart’s or Professor Stern’s.
b.
be Professor Stern’s but could not be Professor Goodheart’s.
c.
be either Professor Goodheart’s or Professor Stern’s.
d.
be Professor Goodheart’s but could not be Professor Stern’s.
e.
There is not enough information to tell whose class it could or couldn’t be.
13. In Problem 8, Nancy Lerner is taking a course from Professor Goodheart who will count only her best
midterm grade and from Professor Stern who will count only her worst midterm grade. In one of her
classes, Nancy has scores of 40 on her first midterm and 80 on her second midterm. When the first
midterm score is measured on the horizontal axis and her second midterm score on the vertical, her
indifference curve has a slope of zero at the point (40, 80). This class could
a.
be Professor Goodheart’s but could not be Professor Stern’s.
b.
not be either Professor Goodheart’s or Professor Stern’s.
c.
be either Professor Goodheart’s or Professor Stern’s.
d.
be Professor Stern’s but could not be Professor Goodheart’s.
e.
There is not enough information to tell whose class it could or couldn’t be.
14. In Problem 8, Nancy Lerner is taking a course from Professor Goodheart who will count only her best
midterm grade and from Professor Stern who will count only her worst midterm grade. In one of her
classes, Nancy has scores of 40 on her first midterm and 50 on her second midterm. When the first
midterm score is measured on the horizontal axis and her second midterm score on the vertical, her
indifference curve has a slope of zero at the point (40, 50). This class could
a.
be Professor Stern’s but could not be Professor Goodheart’s.
b.
be either Professor Goodheart’s or Professor Stern’s.
c.
not be either Professor Goodheart’s or Professor Stern’s.
d.
be Professor Goodheart’s but could not be Professor Stern’s.
e.
There is not enough information to tell whose class it could or couldn’t be.
15. In Problem 8, Nancy Lerner is taking a course from Professor Goodheart who will count only her best
midterm grade and from Professor Stern who will count only her worst midterm grade. In one of her
classes, Nancy has scores of 20 on her first midterm and 70 on her second midterm. When the first
midterm score is measured on the horizontal axis and her second midterm score on the vertical, her
indifference curve has a slope of zero at the point (20, 70). This class could
a.
be Professor Stern’s but could not be Professor Goodheart’s.
b.
be Professor Goodheart’s but could not be Professor Stern’s.
c.
not be either Professor Goodheart’s or Professor Stern’s.
d.
be either Professor Goodheart’s or Professor Stern’s.
e.
There is not enough information to tell whose class it could or couldn’t be.
16. In Problem 9, if we graph Mary Granola’s indifference curves with avocados on the horizontal axis
and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope
of her indifference curve is −2. Whenever she has more avocados than grapefruits, the slope is −1/2.
Mary would be indifferent between a bundle with 23 avocados and 29 grapefruits and another bundle
with 31 avocados and
a.
25 grapefruits.
b.
27 grapefruits.
c.
19 grapefruits.
d.
22 grapefruits.
e.
23.50 grapefruits.
17. In Problem 9, if we graph Mary Granola’s indifference curves with avocados on the horizontal axis
and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope
of her indifference curve is −2. Whenever she has more avocados than grapefruits, the slope is −1/2.
Mary would be indifferent between a bundle with 9 avocados and 15 grapefruits and another bundle
with 15 avocados and
a.
13 grapefruits.
b.
11 grapefruits.
c.
7 grapefruits.
d.
9 grapefruits.
e.
10 grapefruits.
18. In Problem 9, if we graph Mary Granola’s indifference curves with avocados on the horizontal axis
and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope
of her indifference curve is −2. Whenever she has more avocados than grapefruits, the slope is −1/2.
Mary would be indifferent between a bundle with 9 avocados and 21 grapefruits and another bundle
with 19 avocados and
a.
7 grapefruits.
b.
17 grapefruits.
c.
10 grapefruits.
d.
13 grapefruits.
e.
11.50 grapefruits.
19. In Problem 9, if we graph Mary Granola’s indifference curves with avocados on the horizontal axis
and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope
of her indifference curve is −2. Whenever she has more avocados than grapefruits, the slope is −1/2.
Mary would be indifferent between a bundle with 21 avocados and 33 grapefruits and another bundle
with 33 avocados and
a.
21 grapefruits.
b.
29 grapefruits.
c.
25 grapefruits.
d.
17 grapefruits.
e.
23 grapefruits.
20. In Problem 9, if we graph Mary Granola’s indifference curves with avocados on the horizontal axis
and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope
of her indifference curve is −2. Whenever she has more avocados than grapefruits, the slope is −1/2.
Mary would be indifferent between a bundle with 24 avocados and 30 grapefruits and another bundle
with 30 avocados and
a.
22 grapefruits.
b.
24 grapefruits.
c.
26 grapefruits.
d.
28 grapefruits.
e.
25 grapefruits.
21. In Problem 12, recall that Tommy Twit’s mother measures the departure of any bundle from her
favorite bundle for Tommy by the sum of the absolute values of the differences. Her favorite bundle
for Tommy is (2, 7), that is, 2 cookies and 7 glasses of milk. Tommy’s mother’s indifference curve
that passes through the point (c, m) = (5, 4) also passes through
a.
the point (8, 1).
b.
the points (2, 1), (8, 7), and (5, 10).
c.
the point (2, 7).
d.
the points (5, 7), (2, 4), and (2, 10).
e.
None of the above.
22. In Problem 12, recall that Tommy Twit’s mother measures the departure of any bundle from her
favorite bundle for Tommy by the sum of the absolute values of the differences. Her favorite bundle
for Tommy is (2, 7), that is, 2 cookies and 7 glasses of milk. Tommy’s mother’s indifference curve
that passes through the point (c, m) = (4, 5) also passes through
a.
the points (2, 3), (6, 7), and (4, 9).
b.
the point (6, 3).
c.
the point (2, 7).
d.
the points (4, 7), (2, 5), and (2, 9).
e.
None of the above.
23. In Problem 12, recall that Tommy Twit’s mother measures the departure of any bundle from her
favorite bundle for Tommy by the sum of the absolute values of the differences. Her favorite bundle
for Tommy is (2, 7), that is, 2 cookies and 7 glasses of milk. Tommy’s mother’s indifference curve
that passes through the point (c, m) = (4, 5) also passes through
a.
the points (4, 7), (2, 5), and (2, 9).
b.
the point (2, 7).
c.
the point (6, 3).
d.
the points (2, 3), (6, 7), and (4, 9).
e.
None of the above.
24. In Problem 12, recall that Tommy Twit’s mother measures the departure of any bundle from her
favorite bundle for Tommy by the sum of the absolute values of the differences. Her favorite bundle
for Tommy is (2, 7), that is, 2 cookies and 7 glasses of milk. Tommy’s mother’s indifference curve
that passes through the point (c, m) = (5, 4) also passes through
a.
the points (2, 1), (8, 7), and (5, 10).
b.
the point (2, 7).
c.
the point (8, 1).
d.
the points (5, 7), (2, 4), and (2, 10).
e.
None of the above.
25. In Problem 12, recall that Tommy Twit’s mother measures the departure of any bundle from her
favorite bundle for Tommy by the sum of the absolute values of the differences. Her favorite bundle
for Tommy is (2, 7), that is, 2 cookies and 7 glasses of milk. Tommy’s mother’s indifference curve
that passes through the point (c, m) = (4, 5) also passes through
a.
the points (4, 7), (2, 5), and (2, 9).
b.
the point (2, 7).
c.
the points (2, 3), (6, 7), and (4, 9).
d.
the point (6, 3).
e.
None of the above.
26. In Problem 1, Charlie’s indifference curves have the equation xB = constant/xA, where larger constants
correspond to better indifference curves. Charlie strictly prefers the bundle (10, 15) to the bundle
a.
(15, 10).
b.
(11, 14).
c.
(12, 13).
d.
More than one of these options are correct.
e.
None of the above are correct.
27. In Problem 1, Charlie’s indifference curves have the equation xB = constant/xA, where larger constants
correspond to better indifference curves. Charlie strictly prefers the bundle (9, 18) to the bundle
a.
(10, 17).
b.
(18, 9).
c.
(11, 12).
d.
More than one of these options are correct.
e.
None of the above are correct.
28. In Problem 1, Charlie’s indifference curves have the equation xB = constant/xA, where larger constants
correspond to better indifference curves. Charlie strictly prefers the bundle (6, 15) to the bundle
a.
(12, 11).
b.
(7, 14).
c.
(15, 6).
d.
More than one of these options are correct.
e.
None of the above are correct.
29. In Problem 1, Charlie’s indifference curves have the equation xB = constant/xA, where larger constants
correspond to better indifference curves. Charlie strictly prefers the bundle (5, 11) to the bundle
a.
(11, 5).
b.
(6, 10).
c.
(8, 6).
d.
More than one of these options are correct.
e.
None of the above are correct.
30. In Problem 1, Charlie’s indifference curves have the equation xB = constant/xA, where larger constants
correspond to better indifference curves. Charlie strictly prefers the bundle (7, 15) to the bundle
a.
(8, 14).
b.
(15, 7).
c.
(10, 13).
d.
More than one of these options are correct.
e.
None of the above are correct.