Quiz : consumer behavior microeconomics ecn3013 sem 2020/2021
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QUIZ 3: CONSUMER BEHAVIOR MICROECONOMICS ECN3013 SEM 2 2020/2021 1) The theory of consumer behavior assumes that consumers can compare and rank all possible marketbaskets. This assumption is called: A)completeness. B)transitivity. C)nonsatiation (more is preferred to less). D)rationality.
A)completeness. B)transitivity. C)nonsatiation. D)rationality.
3) Refer to Figure 3.1.1 above. On the assumption that the consumer prefers more to less, which of thefollowing baskets are preferred to market basket A? A)B and D B)B and E C)Only B D)Only E 4) Refer to Figure 3.1.1 above. Relative to market basket A, which market baskets would compensate forthe loss of one good with the gain in the other, so that total utility from any of these baskets would be the same? A)B and D B)G and E C)B and E D)Only E
A)that preferences are complete. B)the marginal rate of substitution of one good for another good. C)the ratio of market prices. D)that preferences are transitive. E)none of the above 6)Refer to Figure 3.1.3 above. The way in which the indifference curves are drawn in this figure: A)represents a unique case in which two different indifference curves offer the same level of utility. B)compares three market baskets that yield the same level of utility. C)violates the principle of transitivity in the model of consumer behavior. D)represents the usual way in which indifference curves appear on an indifference map. 7)Jane is trying to decide which courses to take next semester. She has narrowed down her choice totwo courses, Econ 1 and Econ 2. Now she is having trouble and cannot decide which of the two courses to take. It's not that she is indifferent between the two courses, she just cannot decide. An economist would say that this is an example of preferences that: A)are not transitive. B)are incomplete. C)violate the assumption that more is preferred to less. D)all of the above
8) Refer to Figure 3.1.4 above. The value of the marginal rate of substitution between points B and D is: A) –4 B)-0.25
C)10 D)6
9) Refer to Figure 3.1.4 above. When computing the marginal rate of substitution from point to point aswe move downward across the curve, we discover: A)a diminishing marginal rate of substitution. B)an ever increasing marginal rate of substitution. C)a constant marginal rate of substitution. D)no particular trend in the marginal rate of substitution.
10) Refer to Figure 3.1.7 above. This indifference map shows that: this consumer: A)prefers a car with more acceleration and less space. B)prefers more expensive rather than less expensive cars. C)is indifferent between acceleration and space at all levels of utility. D)all of the above 11)Suppose your utility function for food (F) and clothing (C) is u(F,C) = F + 4C. If you reduce yourclothing consumption by 2 units, how much do you have to increase your food consumption in order to maintain the same utility level? A)2 units B)4 units C)6 units D)8 units
12)Refer to Figure 3.2.2 above. Which of the following could have caused the shift of the budget line? A)An increase in income B)An increase in the price of food C)A decrease in the price of clothing D)An increase in the preference for both goods 13)Which of the following will result in a decrease in a consumer's purchasing power? A)A decrease in the consumer's income B)An increase in the price of the good on the vertical axis C)An increase in the price of the good on the horizontal axis D)all of the above
14) Refer to Figure 3.3.1 above. Which of the market baskets, A, B or C is preferred to the others? A)A B)B
C)C D)None of the above. All the baskets lie on the budget line and are equally preferred. 15)Satisfaction from consumption is maximized when: A)marginal cost equals zero. B)marginal benefit equals zero. C)marginal benefit equals marginal cost. D)marginal benefit is maximum. 16)An individual consumes only two goods, X and Y. Which of the following expressions represents theutility maximizing market basket? A)MRSxy is at a maximum. B)PX/PY = money income. C)MRSxy = money income. D)MRSxy = PX/PY. E)all of the above
A)implies that she does not derive any satisfaction from travel. B)implies that she is at a corner solution. C)implies that her MRS does not equal the price ratio. D)Any of the above are possible. 18)The price of lemonade is $0.50; the price of popcorn is $1.00. If Fred has maximized his utility by purchasing lemonade and popcorn, his marginal rate of substitution will be: A)2 lemonades for each popcorn. B)1 lemonades for each popcorn. C)1/2 lemonade for each popcorn. D)indeterminate unless more information on Fred's marginal utilities is provided. Download 141.44 Kb. Share with your friends:
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