Question :
121) Refer to Figure 6-9. In part (i), the line : 1384193
121) Refer to Figure 6-9. In part (i), the line joining points A, B, and C is known as ________, which shows how ________.
A) a price-consumption line; consumption changes as relative prices change, with money income constant
B) an income-consumption line; consumption changes as income changes, with relative prices held constant
C) a price-consumption line; consumption changes as money income and relative prices change
D) an income-consumption line; consumption changes with changing relative prices and constant income
E) an indifference map; the value of various combinations of two goods changes
122) Refer to Figure 6-9. In part (ii), the line joining points X, Y, and Z is known as ________, which shows how ________.
A) a price-consumption line; consumption changes as relative prices change, with money income constant
B) an income-consumption line; consumption changes as income changes, with relative prices held constant
C) a price-consumption line; consumption changes as money income and relative prices change
D) an income-consumption line; consumption changes with changing relative prices and constant income
E) an indifference map; the value of various combinations of two goods changes
123) Refer to Figure 6-10. The line connecting points A, B and C is ________. The line connecting points D, E and F is ________.
A) the price-consumption line; the demand curve
B) the income-consumption line; the demand curve
C) the income-consumption line; the budget line
D) the budget line; the price-consumption line
E) the demand curve; the budget line
124) Refer to Figure 6-10. The two diagrams in Figure 6-10 are showing
A) the change in Chris’s preferences toward specialty coffee.
B) that Chris is indifferent between bundles A, B and C.
C) the derivation of Chris’s demand curve for specialty coffee.
D) that Chris is indifferent between points D, E and F.
E) the derivation of Chris’s indifference curve for specialty coffee.
125) Refer to Figure 6-10. Suppose Chris’s income is such that he is able to buy no more than 10 specialty coffees per week. If Chris is maximizing his utility at this level of income, how many specialty coffees is he consuming per week?
A) 2
B) 4
C) 5
D) 6
E) 10
126) Refer to Figure 6-10. In general, the absolute value of the slope of the budget lines is equal to ________, which reflects the ________ of specialty coffees in terms of all other goods.
A) the relative price ratio (Pspecialty coffee/Pall other goods); opportunity cost
B) the relative price ratio (Pall other goods/Pspecialty coffee); demand
C) the quantity of all other goods consumed divided by the quantity of specialty coffees consumed; quantity
D) $15/value of all other goods; opportunity cost
E) the dollar value of all other goods divided by the number of specialty coffees consumed per week; demand
127) Refer to Figure 6-11. Suppose the consumer begins at E1. The income and substitution effects of the reduction in the price of X are represented as follows:
A) the distance Q1d shows the substitution effect and the distance Q2e shows the income effect.
B) the distance de shows the income effect and the distance cd shows the substitution effect.
C) the distance Q1Q2 shows the income effect and the distance Q2Q3 shows the substitution effect.
D) the distance Q1Q2 shows the substitution effect and the distance Q2Q3 shows the income effect.
E) the distance Q1Q3 shows the substitution effect and the distance Q2Q3 shows the income effect.
128) Refer to Figure 6-11. The line joining points E1 and E3 is known as ________, which shows how ________.
A) a price consumption line; consumption changes as one price changes, with money income held constant
B) an income consumption line; consumption changes as income changes, with relative prices held constant
C) a price consumption line; consumption changes as money income and relative prices change
D) an income consumption line; consumption changes with changing relative prices and constant income
129) Refer to Figure 6-12. Sophie’s movement from point A to point B is the
A) substitution effect of a decrease in the price of paperback novels.
B) total effect of an increase in the price of paperback novels.
C) income effect of an increase in the price of paperback novels.
D) result of a change in her preferences between movies an paperback novels.
E) total effect of a decrease in income.
130) Refer to Figure 6-12. Sophie’s movement from point A to point C is
A) the income effect of an increase in the price of paperback novels.
B) the total effect of a decrease in the price of paperback novels.
C) the income effect of a decrease in the price of paperback novels.
D) the substitution effect of an increase in the price of paperback novels.
E) the total effect of a change in money income.
