bai tap thuc hanh chapter 21 kinh te vi mô

Chapter 21 The Theory of Consumer Choice Sec 00 The Theory of Consumer Choice MULTIPLE CHOICE 1 Which of the following does not represent a tradeoff facing a consumer? a choosing to purchase more of a.

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Chapter 21

The Theory of Consumer Choice

Sec 00 - The Theory of Consumer Choice

MULTIPLE CHOICE

1 Which of the following does not represent a tradeoff facing a consumer?

a choosing to purchase more of all goods

b choosing to spend more leisure time and less working time

c choosing to spend more now and consume less in the future

d choosing to purchase less of one good in order to purchase more of another good

ANS: A DIF: 1 REF: 21-0 NAT: Analytic

LOC: Utility and consumer choice TOP: Consumer choice

MSC: Applicative

2 How are the following three questions related: 1) Do all demand curves slope downward? 2) How

do wages affect labor supply? 3) How do interest rates affect household saving?

a They all relate to macroeconomics

b They all relate to monetary economics

c They all relate to the theory of consumer choice

d They are not related to each other in any way

ANS: C DIF: 1 REF: 21-0 NAT: Analytic

MSC: Interpretive

4 Which of the following statements is correct?

a The theory of consumer choice provides a more complete understanding of supply, just as the theory of the competitive firm provides a more complete understanding of demand

b The theory of consumer choice provides a more complete understanding of demand, just

as the theory of the competitive firm provides a more complete understanding of supply

c Monetary theory provides a more complete understanding of demand, just as the theory of the competitive firm provides a more complete understanding of supply

d The theory of public choice provides a more complete understanding of supply, just as the theory of the competitive firm provides a more complete understanding of demand

ANS: B DIF: 1 REF: 21-0 NAT: Analytic

MSC: Interpretive

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5 When a consumer spends less time enjoying leisure and more time working, she has

a lower income and therefore cannot afford more consumption

b lower income and therefore can afford more consumption

c higher income and therefore cannot afford more consumption

d higher income and therefore can afford more consumption

ANS: D DIF: 1 REF: 21-0 NAT: Analytic

MSC: Interpretive

6 The theory of consumer choice provides the foundation for understanding the

a structure of a firm

b profitability of a firm

c demand for a firm's product

d supply of a firm's product

MSC: Definitional

7 The theory of consumer choice examines

a the determination of output in competitive markets

b the tradeoffs inherent in decisions made by consumers

c how consumers select inputs into manufacturing production processes

d the determination of prices in competitive markets

MSC: Definitional

8 The theory of consumer choice most closely examines which of the following Ten Principles of Economics?

a People face trade-offs

b The cost of something is what you give up to get it

c Trade can make everyone better off

d Markets are usually a good way to organize economic activity

MSC: Interpretive

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Sec 01- The Theory of Consumer Choice - The Budget Constraint: What the Consumer Can Afford

MULTIPLE CHOICE

1 Karen, Tara, and Chelsea each buy ice cream and paperback novels to enjoy on hot summer days Ice cream costs $5 per gallon, and paperback novels cost $8 each Karen has a budget of $80, Tara has a budget of $60, and Chelsea has a budget of $40 to spend on ice cream and paperback novels Who can afford to purchase 8 gallons of ice cream and 5 paperback novels?

a Karen, Tara, and Chelsea

b Karen only

c Tara and Chelsea but not Karen

d none of the women

LOC: Utility and consumer choice TOP: Budget constraint

MSC: Applicative

b Karen only

c Tara and Chelsea but not Karen

d none of the women

MSC: Applicative

b Karen only

c Karen and Tara but not Chelsea

d none of the women

MSC: Applicative

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4 Karen, Tara, and Chelsea each buy ice cream and paperback novels to enjoy on hot summer days Ice cream costs $5 per gallon, and paperback novels cost $8 each Karen has a budget of $80, Tara has a budget of $60, and Chelsea has a budget of $40 to spend on ice cream and paperback novels Which of the following statements is correct?

a Each woman faces the same budget constraint

b The slope of the budget constraint is the same for each woman

c The area underneath the budget constraint is larger for Chelsea than for Karen

d All of the above are correct

MSC: Applicative

5 Suppose a consumer has an income of $800 per month and that she spends her entire income each month on beer and bratwurst The price of a pint of beer is $5, and the price of a bratwurst is $4 Which of the following combinations of beers and bratwursts represents a point that would lie to the interior of the consumer’s budget constraint?

a 160 beers and 200 bratwursts

b 40 beers and 50 bratwursts

c 80 beers and 100 bratwursts

d 160 beers and 0 bratwursts

MSC: Analytical

6 Suppose a consumer has an income of $800 per month and that she spends her entire income each month on beer and bratwurst The price of a pint of beer is $5, and the price of a bratwurst is $4 Which of the following combinations of beers and bratwursts represents a point that would lie to the exterior of the consumer’s budget constraint?

MSC: Analytical

7 Suppose a consumer has an income of $800 per month and that she spends her entire income each month on beer and bratwurst The price of a pint of beer is $5, and the price of a bratwurst is $4 Which of the following combinations of beers and bratwursts represents a point that would lie directly on the consumer’s budget constraint?

MSC: Analytical

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8 Consider two goods, books and hamburgers The slope of the consumer's budget constraint is measured by the

a consumer's income divided by the price of hamburgers

b relative price of books and hamburgers

c consumer's marginal rate of substitution

d number of books purchased divided by the number of hamburgers purchased

MSC: Interpretive

9 Suppose a consumer spends his income on CDs and DVDs If his income decreases, the budget constraint for CDs and DVDs will

a shift outward, parallel to the original budget constraint

b shift inward, parallel to the original budget constraint

c rotate outward along the CD axis because he can afford more CDs

d rotate outward along the DVD axis because he can afford more DVDs

MSC: Analytical

10 When the price of a shirt falls, the

a quantity of shirts demanded falls

b quantity of shirts demanded rises

c quantity of shirts supplied rises

d demand for shirts falls

LOC: Utility and consumer choice TOP: Demand MSC: Analytical

11 A budget constraint illustrates the

a prices that a consumer chooses to pay for products he consumes

b purchases made by consumers

c consumption bundles that a consumer can afford

d consumption bundles that give a consumer equal satisfaction

MSC: Definitional

12 Assume that a college student spends her income on books and pizza The price of a pizza is $8, and the price of a book is $15 If she has $100 of income, she could choose to consume

a 8 pizzas and 4 books

b 4 pizzas and 5 books

c 9 pizzas and 3 books

d 4 pizzas and 3 books

MSC: Applicative

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13 Assume that a college student spends her income on mac-n-cheese and CDs The price of one box ofmac-n-cheese is $1, and the price of one CD is $12 If she has $100 of income, she could choose to consume

a 15 boxes of mac-n-cheese and 6 CDs

b 20 boxes of mac-n-cheese and 7 CDs

c 10 boxes of mac-n-cheese and 8 CDs

d 30 boxes of mac-n-cheese and 6 CDs

MSC: Applicative

14 A consumer who doesn't spend all of her income

a would be at a point outside of her budget constraint

b would be at a point inside her budget constraint

c must not be consuming positive quantities of all goods

d must be consuming at a point where her budget constraint touches one of the axes

MSC: Interpretive

15 An increase in income will cause a consumer's budget constraint to

a shift outward, parallel to its initial position

b shift inward, parallel to its initial position

c pivot around the horizontal axis

d pivot around the vertical axis

MSC: Analytical

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Figure 21-1

16 Refer to Figure 21-1 Which point in the figure showing a consumer’s budget constraint represents

the consumer's income divided by the price of a CD?

a point A

b point C

c point D

d point E

MSC: Applicative

17 Refer to Figure 21-1 A consumer that chooses to spend all of her income could be at which

point(s) on the budget constraint?

a A only

b E only

c B, C, or D only

d A, B, C, or D only

MSC: Applicative

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18 Refer to Figure 21-1 All of the points identified in the figure represent affordable consumption

options with the exception of

a A

b E

c A and E

d None All points are affordable

MSC: Applicative

Figure 21-2

W V

X

Y Z

Pizza Pepsi

19 Refer to Figure 21-2 A consumer that chooses to spend all of her income could be at which

point(s) on the budget constraint?

a V only

b Z only

c V, W, X, or Y only

d W, X, or Y only

MSC: Applicative

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21 Refer to Figure 21-2 Which of the following statements is not correct?

a Points W, X, and Y all cost the consumer the same amount of money

b Point Z is unaffordable for the consumer given his budget constraint

c Point V costs less than point Z

d Points W, X, and Y give the consumer the same level of satisfaction.ANS: D DIF: 2 REF: 21-1 NAT: AnalyticLOC: Utility and consumer choice TOP: Budget constraint

MSC: Analytical

22 Refer to Figure 21-2 Which of the following statements is correct?

a Points W, X, and Y all cost the consumer the same amount of money

b Point V is unaffordable for the consumer given his budget constraint

c Point Z costs less than point V

d Points W, X, and Y give the consumer the same level of satisfaction.ANS: A DIF: 2 REF: 21-1 NAT: AnalyticLOC: Utility and consumer choice TOP: Budget constraint

MSC: Analytical

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Figure 21-3

In each case, the budget constraint moves from BC-1 to BC-2

BC-1 BC-2

(a)

x

y

BC-2 BC-1

(b)

x y

23 Refer to Figure 21-3 Which of the graphs in the figure reflects a decrease in the price of good X

MSC: Analytical

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25 Refer to Figure 21-3 Which of the graphs in the figure could reflect a decrease in the prices of both

goods?

a graph a

b graph b

c graph c

d None of the above is correct

MSC: Analytical

26 The following diagram shows two budget lines: A and B

Which of the following could explain the change in the budget line from A to B?

a a decrease in the price of X

b an increase in the price of Y

c a decrease in the price of Y

d More than one of the above could explain this change

MSC: Analytical

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27 The following diagram shows two budget lines: A and B.

a a simultaneous decrease in the price of X and the price of Y

b an increase in income

c an increase in income and a decrease in the price of Y

d Both a and b are correct

ANS: D DIF: 2 REF: 21-1 NAT: AnalyticLOC: Utility and consumer choice TOP: Budget constraint

MSC: Analytical

28 The following diagram shows two budget lines: A and B

a a decrease in income and a decrease in the price of X

b a decrease in income and an increase in the price of X

c an increase in income and a decrease in the price of X

d an increase in income and an increase in the price of X

ANS: D DIF: 3 REF: 21-1 NAT: AnalyticLOC: Utility and consumer choice TOP: Budget constraint

MSC: Analytical

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29 The slope of the budget constraint is determined by the

a relative price of the goods measured on the axes

b relative price of the goods measured on the axes and the consumer’s income

c endowment of productive resources

d preferences of the consumer

MSC: Definitional

30 The slope of the budget constraint is all of the following except

a the relative price of two goods

b the rate at which a consumer can trade one good for another

c the marginal rate of substitution

d constant

MSC: Applicative

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32 Refer to Figure 21-4 In graph (a), what is the price of good Y relative to good X (i.e., Py/Px)?

a 1/3

b 1/4

c 3

d 4

MSC: Applicative

34 Refer to Figure 21-4 Assume that a consumer faces both budget constraints in graph (a) and graph

(b) on two different occasions If her income has remained constant, what has happened to prices?

a The price of X in graph (a) is higher than the price of X in graph (b)

b The price of Y in graph (a) is higher than the price of Y in graph (b)

c The prices of both X and Y are lower in graph (a)

d None of the above is true

MSC: Analytical

35 Suppose a consumer spends her income on two goods: music CDs and DVDs The consumer has

$200 to allocate to these two goods, the price of a CD is $10, and the price of a DVD is $20 What

is the maximum number of CDs the consumer can purchase?

a 10

b 20

c 40

d 50

MSC: Applicative

36 Suppose a consumer spends her income on two goods: iTunes music downloads and books The consumer has $100 to allocate to these two goods, the price of a downloaded song is $1, and the price of a book is $20 What is the maximum number of books the consumer can purchase?

a 100

b 20

c 10

d 5

MSC: Applicative

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37 Suppose a consumer spends her income on two goods: music CDs and DVDs The price of a CD is

$8, and the price of a DVD is $20 If we graph the budget constraint by placing the quantity of CDs purchased on the horizontal axis, what is the slope of the budget constraint?

MSC: Applicative

38 Suppose a consumer is currently spending all of her available income on two goods: music CDs and DVDs If the price of a CD is $9, the price of a DVD is $18, and she is currently consuming 10 CDs and 5 DVDs, what is the consumer's income?

a $90

b $180

c $270

d $360

MSC: Applicative

39 A consumer is currently spending all of her available income on two goods: music CDs and DVDs

At her current consumption bundle she is spending twice as much on CDs as she is on DVDs If the consumer has $120 of income and is consuming 10 CDs and 2 DVDs, what is the price of a CD?

a $4

b $8

c $12

d $20

MSC: Analytical

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40 The following diagram shows a budget constraint for a particular consumer.

If the price of X is $10, what is the price of Y?

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42 The following diagram shows a budget constraint for a particular consumer.

MSC: Analytical

43 Budget constraints exist for consumers because

a their utility from consuming goods eventually reaches a maximum level

b even with unlimited incomes they have to pay for each good they consume

c they have to pay for goods, and they have limited incomes

d prices and incomes are inversely related

MSC: Applicative

45 A family on a trip budgets $800 for meals and hotel accommodations Suppose the price of a meal is

$40 In addition, suppose the family could afford a total of 8 nights in a hotel if they don’t buy any meals How many meals could the family afford if they gave up two nights in the hotel?

a 1

b 2

c 5

d 8

MSC: Applicative

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46 If the price of bread is zero, the budget constraint between bread (on the vertical axis) and cheese (on the horizontal axis) would

a be vertical

b coincide with the vertical axis

c coincide with the horizontal axis

d be horizontal

MSC: Analytical

Scenario 21-1

Suppose the price of hot wings is $10, the price of beer is $1, and the consumer’s income is $50 In addition, suppose the consumer’s budget constraint illustrates hot wings on the horizontal axis and beer

on the vertical axis

47 Refer to Scenario 21-1 If the price of beer doubles to $2, then the

a budget constraint intersects the vertical axis at 25 beers

b slope of the budget constraint rises to -2

c budget constraint intersects the vertical axis at 100 beers

d budget constraint shifts inward in a parallel fashion

MSC: Applicative

48 Refer to Scenario 21-1 If the consumer's income rises to $60, then the budget line for hot wings

and beer would

a now intersect the horizontal axis at 6 orders of hot wings and the vertical axis at 60 beers

b not change

c now intersect the horizontal axis at 4 orders of hot wings and the vertical axis at 16 beers

d rotate outward along the beer axis

MSC: Applicative

49 An increase in a consumer's income

a increases the slope of the consumer's budget constraint

b has no effect on the slope of the consumer's budget constraint

c decreases the slope of the consumer's budget constraint

d has no effect on the consumer's budget constraint

MSC: Analytical

50 A decrease in a consumer's income

a increases the slope of the consumer's budget constraint

b has no effect on the consumer's budget constraint

c decreases the slope of the consumer's budget constraint

d has no effect on the slope of the consumer's budget constraint

MSC: Analytical

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51 Mark spends his weekly income on gin and cocktail olives The price of gin has risen from $7 to $9 per bottle, the price of cocktail olives has fallen from $6 to $5 per jar, and Mark's income has stayed fixed at $46 per week Since the price changes, Mark has been buying 4 bottles of gin and 2 jars of cocktail olives per week At the original prices, 4 bottles of gin and 2 jars of cocktail olives would have

a exactly exhausted his income

b cost more than his income

c cost less than his income

d could have maximized his satisfaction given his budget constraint

MSC: Applicative

52 Mark spends his weekly income on gin and cocktail olives The price of gin has risen from $7 to $9 per bottle, the price of cocktail olives has fallen from $6 to $5 per jar, and Mark's income has stayed fixed at $46 per week If you illustrate gin on the vertical axis and cocktail olives on the horizontal axis, then the budget constraint

a is steeper after the price changes

b is flatter after the price changes

c is the same after the price changes

d shifts in a parallel fashion to the old budget constraint after the price changes

MSC: Applicative

53 Suppose the only two goods that Brett consumes are wine and cheese When wine sells for $10 a bottle and cheese sell for $10 a pound, he buys 6 bottles of wine and 4 pounds of cheese — spendinghis entire income of $100 One day the price of wine falls to $5 a bottle and the price of cheese increases to $20 a pound, while his income does not change The bundle of wine and cheese that he purchased at the old prices now costs

a the same amount at the new prices

b less than Brett's income at the new prices

c more than Brett's income at the new prices

d We do not have enough information to answer the question

MSC: Applicative

54 Suppose the only two goods that Brett consumes are wine and cheese When wine sells for $10 a bottle and cheese sell for $10 a pound, he buys 6 bottles of wine and 4 pounds of cheese — spendinghis entire income of $100 One day the price of wine falls to $5 a bottle, and the price of cheese increases to $20 a pound, while his income does not change If you illustrate wine on the vertical axis and cheese on the horizontal axis, then

a the slope of Brett's budget has not changed

b the slope of Brett's budget constraint is flatter at the new prices

c the slope of Brett's budget constraint is steeper at the new prices

d Brett's budget constraint has shifted in a parallel fashion to the budget constraint with the old prices

MSC: Applicative

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55 If the relative price of a concert ticket is three times the price of a meal at a good restaurant, then theopportunity cost of a concert ticket can be measured by the

a slope of the budget constraint

b slope of an indifference curve

c marginal rate of substitution

d income effect

56 Refer to Figure 21-5 Suppose a consumer has $100 in income, the price of popcorn is $2, and the

value of B is 100 What is the price of Mt Dew?

a $1

b $2

c $5

d $100

MSC: Analytical

57 Refer to Figure 21-5 Suppose a consumer has $200 in income, the price of popcorn is $1, and the

price of Mt Dew is $2 What is the value of A?

a 200

b 100

c 50

d 25

MSC: Analytical

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58 Refer to Figure 21-5 Suppose the price of popcorn is $2, the price of Mt Dew is $4, the value of

A is 30, and the value of B is 15 How much income does the consumer have?

a $120

b $80

c $60

d $30

59 Refer to Figure 21-6 Suppose a consumer has $500 in income, the price of a book is $10, and the

value of B is 50 What is the price of a DVD?

a $5

b $10

c $50

d $100

MSC: Analytical

60 Refer to Figure 21-6 Suppose a consumer has $200 in income, the price of a book is $5, and the

price of a DVD is $10 What is the value of A?

a 40

b 20

c 10

d 2

MSC: Analytical

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61 Refer to Figure 21-6 Suppose the price of a book is $15, the price of a DVD is $10, the value of A

is 5, and the value of B is 7.5 How much income does the consumer have?

a $150

b $100

c $75

d $37.50

d the prices of two goods

LOC: Utility and consumer choice TOP: Indifference curves

MSC: Definitional

3 If two bundles of goods give a consumer the same satisfaction, the consumer must be

a on her budget constraint

b in a position of equilibrium

c indifferent between the bundles

d Both a and c are correct

MSC: Interpretive

4 Indifference curves graphically represent

a an income level sufficient to allow an individual to achieve a given level of satisfaction

b the constraints faced by individuals

c an individual's preferences

d the relative price of commodities

MSC: Definitional

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5 A consumer

a is equally satisfied with any indifference curve

b prefers indifference curves with positive slopes

c prefers higher indifference curves to lower indifference curves

d prefers indifference curves that are straight lines to indifference curves that are right

angles

MSC: Interpretive

6 A consumer's preferences provide a

a ranking of the set of bundles that happen to fall on indifference curves

b relative ranking of bundles that provide more of all goods

c framework for evaluating market equilibriums

d complete ranking of all possible consumption bundles

MSC: Definitional

7 If Walter has one hour of leisure time in which to watch a sporting event on television, his

preferences are as follows: Walter prefers watching football to watching baseball, but he prefers watching baseball to watching basketball He is indifferent between watching baseball and watchinghockey Bundle A contains one hour of football and zero hours of all other sports Bundle B contains one hour of baseball and zero hours of all other sports Bundle C contains one hour of basketball and zero hours of all other sports Bundle D contains one hour of hockey and zero hours

of all other sports If we were to graph Walter’s preferences using indifference curves, which of the following bundles would be on the same indifference curve?

8 Diana and Sarah each like jewelry and music by the Rolling Stones If we were to graph an

indifference curve with jewelry on the horizontal axis and cd’s by the Rolling Stones on the vertical axis, then

a Diana and Sarah would have identical indifference curves

b Diana’s indifference curve would be higher than Sarah’s indifference curve

c Sarah’s indifference curve would be higher than Diana’s indifference curve

d Because we do not know the intensity of each woman’s preferences, we do not have

enough information to compare their indifference curves

MSC: Analytical

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9 Both Diana and Sarah like jazz music and music by the Beatles Diana likes music by the Beatles much better than jazz music, whereas Sarah prefers jazz music to music by the Beatles If we were

to graph an indifference curve with cd’s by the Beatles on the horizontal axis and jazz cd’s on the vertical axis, then

a Diana and Sarah would have identical indifference curves

b Diana’s indifference curve would be steeper than Sarah’s indifference curve

c Sarah’s indifference curve would be steeper than Diana’s indifference curve

d We do not have enough information to compare their indifference curves

MSC: Analytical

10 Alicia is a vegetarian, so she does not eat beef That is, beef provides no additional utility to Alicia She loves potatoes, however If we illustrate Alicia’s indifference curves by drawing beef on the horizontal axis and potatoes on the vertical axis, her indifference curves will

a slope downward

b be vertical straight lines

c slope upward

d be horizontal straight lines

MSC: Analytical

11 Irene is a vegetarian, so she does not eat pork That is, pork provides no additional utility to Irene She loves broccoli, however If we illustrate Irene’s indifference curves by drawing broccoli on the horizontal axis and pork on the vertical axis, her indifference curves will

a slope downward

b be vertical straight lines

c slope upward

d be horizontal straight lines

MSC: Analytical

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Figure 21-7

D B A

C E

Indifference Curve 1 Indifference Curve 2 Indifference Curve 3

Cake Donuts

12 Refer to Figure 21-7 When comparing bundle A to bundle E, the consumer

a prefers bundle A because it contains more donuts

b prefers bundle E because it lies on a higher indifference curve

c prefers bundle E because it contains more donuts

d is indifferent between the two bundles

MSC: Analytical

13 Refer to Figure 21-7 When comparing bundle B to bundle C, the consumer

a prefers bundle B because it contains more donuts

b is indifferent between the two bundles

c prefers bundle C because it contains more cake

d In order to compare bundle B to bundle C, we must know the prices of cake and donuts.ANS: B DIF: 2 REF: 21-2 NAT: Analytic

MSC: Analytical

14 Refer to Figure 21-7 A person that chooses to consume bundle C is likely to

a receive higher total satisfaction at bundle C than at bundle A

b spend more on bundle C than bundle A

c receive higher marginal utility from cake than from donuts

d receive higher marginal utility from donuts than from cake

MSC: Analytical

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a Bundle A is preferred equally to bundle E

b Bundle A is preferred equally to bundle C

c Bundle B contains more cake than bundle C

d The bundles along indifference curve Indifference Curve 2 are preferred to those along indifference curve Indifference Curve 3

MSC: Analytical

a If a consumer moves from bundle C to bundle A, her loss of cake cannot be compensated for by an increase in donuts

b Bundle E is preferred to all other points identified in the figure

c Since more is preferred to less, bundle C may be preferred to bundle E in some

circumstances for this consumer

d Even though bundle E has more of both goods than bundle B, we could draw a different set of indifference curves in which bundle B is preferred to bundle E

MSC: Analytical

17 Refer to Figure 21-7 Which of the following statements is not true for a consumer who moves

from bundle B to bundle C?

a At bundle C the consumer would be willing to give up a larger amount of cake in

exchange for a donut than at bundle B

b The marginal rate of substitution at bundles B and C are the same since the points lie on the same indifference curve

c The consumer is willing to sacrifice donuts to obtain cake

d The consumer receives the same level of satisfaction at bundles B and C

MSC: Analytical

18 Refer to Figure 21-7 Which of the following statements is not correct?

a Bundles on Indifference Curve 3 are preferred to bundles on Indifference Curve 1

b The consumer is indifferent between bundles A and E because they contain the same number of donuts

c The consumer is indifference between bundles B and C

d The consumer prefers bundle C to bundle D

MSC: Analytical

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19 Refer to Figure 21-7 Which of the following comparisons is correct regarding the marginal rate of

substitution (MRS) of donuts for cake?

a The MRS is greater between bundles A and B than between bundles B and C

b The MRS is greater between bundles B and C than between bundles A and B

c The MRS is the same between bundles A and B and bundles B and C because all three

bundles lie on the same indifference curve

d The MRS is greater between bundles E and B than between bundles B and D

LOC: Utility and consumer choice TOP: Marginal rate of substitution

MSC: Analytical

20 Each of the following are characteristics of an indifference curve map except

a moving northeast to a new indifference curve will increase utility

b points on the same indifference curve yield equal utility

c the axes represent levels of utility for each of the goods

d indifference curves cannot cross

a The consumer must prefer bundle C to either bundle A or B

b Bundle A and bundle B lie on the same indifference curve

c The consumer must prefer bundle B to bundle C

d Both a) and b) are correct

a 1 movie and 5 books

b 3 movies and 3 books

c 5 movies and 1 book

d 1 movie and 7 books

MSC: Analytical

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23 A consumer has preferences over two goods: books and movies The three bundles shown in the table below lie on the same indifference curve for the consumer

Which of the following properties of indifference curves would this consumer's preferences violate?

a Indifference curves are downward sloping

b Indifference curves do not cross

c Indifference curves are bowed inward

d These bundles do not violate any of the properties of indifference curves

MSC: Analytical

25 Which of the following is a property of indifference curves?

a Indifference curves usually intersect

b Indifference curves have positive slopes

c Indifference curves are downward sloping and always linear

d Indifference curves are bowed in toward the origin

MSC: Interpretive

26 All of the following are properties of indifference curves except

a higher indifference curves are preferred to lower ones

b indifference curves are downward sloping

c indifference curves do not cross

d indifference curves are bowed outward

MSC: Interpretive

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27 Which of the following is a property of a typical indifference curve?

a upward sloping

b bowed away from the origin

c do not intersect

d lower ones are preferred to higher ones

MSC: Interpretive

28 Which of the following is a property of a typical indifference curve?

a upward sloping

b bowed away from the origin

c they often intersect

d higher ones are preferred to lower ones

MSC: Interpretive

30 Higher indifference curves are preferred to lower ones as long as the

a marginal rate of substitution is diminishing

b products in the bundle are “bads” not “goods.”

c products in the bundle are “goods” not “bads.”

d budget constraint does not shift

MSC: Interpretive

31 Janet prefers cashews to almonds She prefers macadamia nuts to peanuts, but she is indifferent between almonds and peanuts Which of the following statements can we say for sure?

a Janet prefers cashews to macadamia nuts

b Janet prefers peanuts to cashews

c Janet prefers macadamia nuts to almonds

d Janet prefers almonds to macadamia nuts

LOC: Utility and consumer choice TOP: Transitivity MSC: Applicative

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32 Indifference curves that cross would suggest that

a the consumer does not prefer more to less

b the consumer is likely to prefer a redistribution of income from rich to poor

c different individuals have different preferences for the same goods

d the marginal rate of substitution is the same for both indifference curves

LOC: Utility and consumer choice TOP: Transitivity MSC: Analytical

33 Which of the following is not correct?

a Indifference curves are downward sloping

b Indifference curves that are closer to the origin are preferred to indifference curves that arefurther from the origin

c Indifference curves are bowed in toward the origin

d Indifference curves do not cross

MSC: Interpretive

34 When indifference curves are bowed in toward the origin,

a consumers are less inclined to trade away goods they are lacking

b consumers' willingness to trade away goods they have in abundance diminishes

c an increase in income will shift the indifference curve away from the origin

d a decrease in income will shift the indifference curve away from the origin

MSC: Analytical

35 Indifference curves tend to be bowed inward because of diminishing

a marginal rates of substitution

b demand for the good as prices rise

c income

MSC: Interpretive

36 The slope of an indifference curve is

a the rate of change of consumer's preferences

b the marginal rate of preference

c the marginal rate of substitution

d always equal to the slope of the budget constraint

MSC: Definitional

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37 The rate at which a consumer is willing to exchange one good for another, and maintain a constant level of satisfaction, is called the

a relative expenditure ratio

b value of marginal product

c marginal rate of substitution

d relative price ratio

MSC: Definitional

38 The marginal rate of substitution is

a the slope of a budget constraint

b always constant

c the slope of an indifference curve

d the point at which the budget constraint and the indifference curve are tangent

MSC: Definitional

39 The rate at which a consumer is willing to trade one good for another to maintain the same level of satisfaction is affected by the

a prices of the products

b amount of each good the consumer is currently consuming

c consumer’s income

d marginal value product

MSC: Analytical

40 Bob enjoys fishing and hunting He divides his leisure hours between the two outdoor activities Suppose we were to draw Bob’s indifference curves for the two activities, placing fishing on the horizontal axis and hunting on the vertical axis If Bob’s indifference curves are bowed inward, then

a the rate at which he is willing to give up an hour of hunting for an hour of fishing changes depending on how many hours of each activity he has done For example, if Bob has

already fished a lot in one week, he will be more willing to give up an hour of fishing for

an hour of hunting than if he has only fished a little that week

b the rate at which he is willing to give up an hour of hunting for an hour of fishing is

constant because he must derive the same enjoyment out of each activity

c the rate at which he is willing to give up an hour of hunting for an hour of fishing changes depending on how many hours of each activity he has done For example, if Bob has

already fished a lot in one week, he will be less willing to give up an hour of fishing for anhour of hunting than if he has only fished a little that week

d Bob’s indifference curves will not cross When indifference curves are bowed outward, the indifference curves must cross

MSC: Analytical

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41 The marginal rate of substitution

a varies along an indifference curve if the curve is bowed inward

b is constant along an indifference curve if the curve is a straight line

c is greater when a consumer has more of two goods rather than less of two goods

MSC: Analytical

42 Bundle L contains 10 units of good X and 20 units of good Y Bundle M contains 8 units of good Xand 21 units of good Y The consumer is indifferent between bundle L and bundle M Assume that the consumer’s preferences satisfy the four properties of indifference curves Which of the

following correctly expresses the marginal rate of substitution of good X for good Y between these two points?

a The consumer will give up 1 unit of good X to gain 2 units of good Y

b The consumer will give up 2 units of good X to gain 1 unit of good Y

c The price of good X is twice as large as the price of good Y

d The price of good X is half as large as the price of good Y

MSC: Applicative

43 Assume that a consumer’s indifference curve is bowed inward and satisfies the other three properties

of indifference curves As the consumer moves from left to right along the horizontal axis, the consumer’s marginal rate of substitution

a increases

b decreases

c remains constant

d increases, then decreases

MSC: Analytical

44 Assume that a consumer’s indifference curve is bowed outward but satisfies the other three

properties of indifference curves As the consumer moves from left to right along the horizontal axis, the consumer’s marginal rate of substitution

a increases

b decreases

c remains constant

MSC: Analytical

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45 Assume that a consumer’s indifference curve is a downward-sloping straight line As the consumer moves from left to right along the horizontal axis, the consumer’s marginal rate of substitution

a increases

b decreases

c remains constant

MSC: Analytical

46 If an indifference curve is bowed in toward the origin, the marginal rate of substitution is

a not likely to reflect the relative value of goods

b likely to be constant for all bundles along the indifference curve

c likely to be identical to the price ratio for each bundle along the indifference curve

d different for each bundle along the indifference curve

MSC: Interpretive

47 As long as a consumer remains on the same indifference curve,

a she is indifferent to all points that lie on any other indifference curve

b her preferences will not affect the marginal rate of substitution

c she is unable to decide which bundle of goods to choose

d she is indifferent among the points on that curve

MSC: Interpretive

48 The bowed shape of the indifference curve reflects the consumer's

a unwillingness to give up a good that he already has in large quantity

b unwillingness to purchase a good that he already has in large quantity

c greater willingness to give up a good that he already has in large quantity

d greater willingness to purchase a good that he already has in large quantity

MSC: Interpretive

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49 The following diagram shows one indifference curve representing the preferences for goods X and

Y for one consumer

What is the marginal rate of substitution between points A and B?

a 2/5

b 1

c 5/2

d 3

MSC: Analytical

50 The following diagram shows one indifference curve representing the preferences for goods X and

Y for one consumer

What is the marginal rate of substitution between points A and B?

a 1/2

b 4/3

c 2

d 3

MSC: Analytical

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51 Refer to Figure 21-8 Which of the graphs shown may represent indifference curves?

a graph a

b graph b

c graph c

LOC: Utility and consumer choice TOP: Perfect complements

LOC: Utility and consumer choice TOP: Perfect substitutes

MSC: Interpretive

a The indifference curves represented in graph a are perfect complements

b The indifference curves represented in graph b are perfect substitutes

c The indifference curves represented in graph c are neither perfect substitutes not perfect complements

LOC: Utility and consumer choice TOP: Perfect substitutes | Perfect complementsMSC: Interpretive

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a The indifference curves represented in graph a are perfect substitutes

b The indifference curves represented in graph b are perfect complements

c The indifference curves represented in graph c are neither perfect substitutes not perfect

complements

LOC: Utility and consumer choice TOP: Perfect substitutes | Perfect complements

MSC: Interpretive

56 When two goods are perfect substitutes, the marginal rate of substitution

a is constant along the indifference curve

b decreases as the scarcity of one good increases

c increases as the scarcity of one good increases

d changes to reflect the consumer’s changing preferences for the goods

MSC: Interpretive

57 Consider the indifference curve map for nickels and quarters Assume nickels are on the vertical axisand quarters are on the horizontal 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

MSC: Applicative

58 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

MSC: Interpretive

59 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

MSC: Applicative

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60 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

ANS: B DIF: 2 REF: 21-2 NAT: AnalyticLOC: Utility and consumer choice TOP: Perfect substitutes

MSC: Applicative

61 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

ANS: D DIF: 2 REF: 21-2 NAT: AnalyticLOC: Utility and consumer choice TOP: Perfect substitutes

MSC: Applicative

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62 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?

c very close substitutes

d very close complements

MSC: Analytical

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64 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

MSC: Applicative

65 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

MSC: Interpretive

66 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

MSC: Interpretive

67 "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

MSC: Interpretive

Tiêu đề	The Theory of Consumer Choice
Trường học	University of Economics and Business Ho Chi Minh City
Chuyên ngành	Economics
Thể loại	Sách hướng dẫn thực hành
Thành phố	Ho Chi Minh City

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Số trang	79
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