Question : 11) Any point above a given indifference curve ________ affordable : 1241121

11) Any point above a given indifference curve ________ affordable and is ________ to any point on the indifference curve.

A) is not; inferior

B) might or might not be; preferred

C) is not; preferred

D) might or might not be; inferior

E) is; preferred

12) Any point below a given indifference curve is

A) inferior to any point on the indifference curve.

B) preferred to any point on the indifference curve.

C) definitely affordable.

D) definitely unaffordable.

E) More information is needed to determine if the point is or is not affordable and if the point is or is not preferred.

13) We have asked Mac to rank his preferences between three market baskets, A, B, and C. If Mac prefers B to C but does not care if he gets A or B, then

A) A is on a higher indifference curve than B.

B) B and C are on the same indifference curve.

C) both A and B are on a higher indifference curve than C.

D) C is on a higher indifference curve than A.

E) B is on a higher indifference curve than C, but it is not possible to determine whether C is on a higher, lower, or the same indifference curve as A.

14) A preference map is a set of

A) indifference curves.

B) budget lines.

C) demand curves.

D) substitution curves.

E) marginal rate of substitution curves.

15) Which of the following statements is FALSE?

A) A consumer has only one indifference curve.

B) A consumer possesses a preference map.

C) An indifference curve is a curve that shows the combination of goods among which a consumer is indifferent.

D) The marginal rate of substitution is equal to the magnitude of the slope of the indifference curve.

E) Diminishing marginal rate of substitution means that the marginal rate of substitution decreases as more of the good is consumed.

16) A preference map is a

A) series of indifference curves.

B) positively sloped series of curves, which reflect a consumer’s preferences.

C) contour map of a consumer’s budget.

D) map showing how much a consumer prefers one good for another.

E) None of the above answers is correct.

17) An indifference curve is a line that shows combinations of goods among which a consumer

A) prefers one over the other.

B) places no value on any of the items.

C) can afford to buy all the combinations.

D) is indifferent.

E) believes that all combinations have the same marginal rate of substitution.

18) What is the difference between a budget line and an indifference curve?

A) One is measured in dollars while the other in units of goods.

B) One shows what is possible while the other shows what is preferred.

C) One shows a positive relationship, and the other shows a negative relationship.

D) The budget line is bowed in toward the origin, and the indifference curves are linear.

E) There is no difference.

19) In a preference map, consumption combinations on higher indifference curves

A) always cost more than any combination on a lower indifference curve.

B) always are preferred to combinations on lower indifference curves.

C) always cost less than any combination on a lower indifference curve.

D) always are less preferred than combinations on lower indifference curves.

E) are sometimes more preferred, sometimes less preferred, and sometimes equally preferred to any combination on a lower indifference curve.

20) The marginal rate of substitution is equal to the magnitude of the

A) slope of the demand curve.

B) price of the good measured along the x-axis.

C) slope of the indifference curve.

D) relative prices of the two goods.

E) price of the good measured along the y-axis.