Question :
Figure 10-6
18) Refer to Figure 10-6. A change in the : 1387723
Figure 10-6
18) Refer to Figure 10-6. A change in the price of popcorn only is shown in
A) Panel A.
B) Panel B.
C) Panel C.
D) none of the above panels.
19) Refer to Figure 10-6. Which diagram demonstrates an increase in total utility following a decrease in the price of popcorn?
A) the movement from d to e in Panel A
B) the movement from f to g in Panel B
C) the movement from h to k in Panel C
D) none of the above
20) Refer to Figure 10-6. Which diagram demonstrates a decrease in total utility following an increase in the price of candy?
A) the movement from e to d in Panel A
B) the movement from g to f in Panel B
C) the movement from k to h in Panel C
D) none of the above
21) Suppose the consumer’s income increases while the prices of the goods remain constant. Then the
A) budget constraint shifts inward parallel to the original budget constraint.
B) budget constraint shifts outward parallel to the original budget constraint.
C) indifference curves shift outward away from the origin.
D) indifference curves become flatter.
Figure 10-7
Manuri has $300 to spend on Pilates classes and Yoga classes. The price of a group Pilates class is $20 and the price of a group Yoga class is $10. Manuri’s optimal bundle is given by “A” in Figure 10-7.
22) Refer to Figure 10-7. Suppose the price of Pilates sessions rises to $30 while income and the price of Yoga sessions remain unchanged. What is her new optimal bundle?
A) still remains at bundle A.
B) bundle B.
C) bundle C.
D) bundle D.
23) Refer to Figure 10-7. Suppose the price of Pilates sessions rise to $30 while income and the price of Yoga sessions remain unchanged. The substitution effect of this price change is represented by the movement from
A) A to B.
B) A to C.
C) A to D.
D) D to B.
24) Refer to Figure 10-7. Suppose the price of Pilates sessions rise to $30 while income and the price of Yoga sessions remain unchanged. The income effect of this price change is represented by the movement from
A) A to B.
B) B to C.
C) D to B.
D) D to C.
25) Which of the following statements about utility and preferences is false?
A) If Sidra prefers tea to coffee and coffee to hot chocolate, then she must prefer tea to hot chocolate.
B) Preferences can be ranked.
C) If two individuals, Ingrid and Inez, each consume the same bundle of goods, then both Inez and Ingrid must receive the same utility from the bundle.
D) Utility cannot be compared across consumers.
26) A curve that shows combinations of consumption bundles that give a consumer the same utility is called
A) a utility curve.
B) an indifference curve.
C) a preference curve.
D) a demand curve.
27) The slope of the indifference curve is referred to as
A) the marginal rate of substitution.
B) the price ratio.
C) the marginal rate of consumption.
D) the marginal tradeoff rate.
