Question : 11) A change in the slope of a budget constraint : 1377345

 

11) A change in the slope of a budget constraint indicates:

A) a change in the price of either good which causes a change in the opportunity cost.

B) a change in the consumer’s income.

C) a change in the price of either good without a change in the opportunity cost.

D) a change in the consumer’s tastes and preferences.

 

12) Assume that an individual spends his income on sweaters and shirts. If the price of a sweater increases:

A) the opportunity cost of buying sweaters increases.

B) the opportunity cost of buying sweaters decreases.

C) the opportunity cost of buying shirts increases.

D) there is no change in the opportunity cost of consuming either good.

 

13) If the price of the good measured along the vertical axis increases without a change in the price of the good measured along the horizontal axis, the consumer’s budget constraint:

A) pivots rightward without a change in the intercept on the horizontal axis.

B) pivots leftward without a change in the intercept on the horizontal axis.

C) shifts to the right.

D) shifts to the left.

 

14) A decrease in the price of either good will cause a consumer’s budget constraint to:

A) pivot leftward.

B) pivot rightward.

C) shift leftward.

D) shift rightward.

 

15) If quantity of tea is measured on the horizontal axis and quantity of coffee is measured on the vertical axis, an increase in the price of coffee will cause the budget constraint to:

A) pivot leftward along the vertical axis.

B) pivot rightward along the vertical axis.

C) pivot leftward along the horizontal axis.

D) pivot rightward along the horizontal axis.

16) Which of the following will lead to a change in the opportunity cost of buying a pen and a pencil?

A) An increase in the consumer’s income

B) A decrease in the consumer’s income

C) A two-fold increase in the prices of both pens and pencils

D) A two-fold increase in the price of pens and a three-fold increase in the price of pencils

 

17) If quantity of milk is measured on the horizontal axis and quantity of juice is measured on the vertical axis, a decrease in the price of milk will cause the budget constraint to:

A) pivot rightward along the vertical axis.

B) pivot rightward along the horizontal axis.

C) shift inward.

D) shift outward.

 

The following figure illustrates the budget constraint of a consumer of jeans and sweaters.

 

 

18) Refer to the figure above. A change in the budget constraint from B1 to B2 indicates:

A) an increase in the price of sweaters.

B) a decrease in the price of sweaters.

C) an increase in the consumer’s income.

D) a decrease in the consumer’s income.

19) Refer to the figure above. A change in the budget constraint from B2 to B3 indicates:

A) a decrease in the price of jeans.

B) a decrease in the price of sweaters.

C) an increase in the consumer’s income.

D) a decrease in the consumer’s income.

 

20) Refer to the figure above. If the price of a sweater is $3 and the budget constraint of the consumer is B3, his income is:

A) $45.

B) $90.

C) $135.

D) $270.

 

21) A consumer has $100 to be spent on tables and chairs. If his income increases to $200, the prices of the goods remaining unchanged, his budget constraint:

A) pivots inward along the vertical axis.

B) pivots outward along the horizontal axis.

C) shifts inward.

D) shifts outward.

 

 

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