Deck 10: The Rational Consumer

Question 1

On a sparsely populated island,an additional minute of high-speed Internet service would have a _____ marginal utility than in Toronto,while in Toronto,quiet evenings would carry a _____ marginal utility than on a deserted island.

A) lower;higher
B) higher;lower
C) lower;lower
D) higher;higher

Answer 1

higher;higher

Question 2

The amount by which total utility changes when an additional unit of a good is consumed is called _____ utility.

A) average
B) additional
C) maximum
D) marginal

Answer 2

marginal

Question 3

To say that you can't have too much of a good thing means that,for any good that you enjoy (e.g. ,pizza):

A) higher consumption will always lead to higher utility.
B) higher consumption will cause utility to decrease at an increasing rate.
C) higher consumption will increase utility,but only up to a point;after that,utility will start to decrease.
D) it is valid to measure utility in utils.

Answer 3

higher consumption will always lead to higher utility.

Question 4

Utility is the:

A) difference between a firm's total revenue and its total economic cost.
B) good not adequately provided by a free market and usually provided by the government.
C) satisfaction consumers derive from their consumption of goods and services.
D) lowest price that buyers are willing to pay for a given quantity of a good.

Question 5

The marginal utility of coffee consumption for Steve is the change in _____ generated by consuming an additional cup of coffee.

A) total utility
B) total consumption
C) total demand
D) price

Question 6

Economists describe the satisfaction consumers receive from consuming goods and services as:

A) utility.
B) income effects.
C) budget constraints.
D) substitution effects.

Question 7

Which statement BEST describes the principle of diminishing marginal utility? As an individual consumes more of a good:

A) the total utility obtained will eventually fall.
B) the total utility obtained will eventually become negative.
C) the addition to total utility obtained from the nth unit of the good will be less than that obtained from the immediately preceding unit of the good.
D) the marginal utility will eventually become negative.

Question 8

For economists,the satisfaction an individual derives from the consumption of goods and services is BEST described as:

A) happiness.
B) usefulness.
C) utility.
D) opportunity cost.

Question 9

The principle of diminishing marginal utility means that,when Sarah eats pizza,her satisfaction from the second slice of pizza is probably _____ that from the first.

A) greater than
B) equal to
C) less than
D) not comparable to

Question 10

At the quantity where total utility is maximized,marginal utility is:

A) rising.
B) at its average value.
C) at a maximum.
D) zero.

Question 11

An individual gets five units of utility from one slice of pizza and nine units of utility from two slices of pizza.The principle of diminishing marginal utility implies that the total utility from three slices of pizza will be _____ units of utility.

A) exactly 12
B) less than 13
C) less than 9
D) more than 14

Question 12

The utility of a good is determined by how much _____ a particular consumer obtains from it.

A) satisfaction
B) usefulness
C) cost
D) need fulfillment

Question 13

The amount by which an additional unit of a good or service changes a consumer's total satisfaction,all other things unchanged,is _____ utility.

A) marginal
B) maximum
C) average
D) expected

Question 14

In economics,the ability of a pumpkin pie to satisfy a want is referred to as its:

A) utility.
B) usefulness.
C) worthiness.
D) necessity.

Question 15

Utility is MOST closely related to:

A) usefulness.
B) satisfaction.
C) requirement.
D) necessity.

Question 16

Suppose bad weather and pollution dramatically reduce the supply of lobster in Nova Scotia next year.This would MOST likely lead to _____ in the marginal utility of lobster consumption.

A) an increase
B) a decrease
C) no change
D) substitution and income effects

Question 17

Economists identify the satisfaction a person derives from the consumption of goods and services as:

A) happiness.
B) usefulness.
C) utility.
D) pleasure.

Question 18

The relation between an individual's consumption bundle and his or her satisfaction is called a _____ function.

A) demand
B) production
C) consumption
D) utility

Question 19

Which good is MOST likely to display increasing marginal utility over some range?

A) chicken during the 1920s,when it was considered a luxury good
B) paint,because you need enough to paint at least one entire room
C) lobsters,which are so expensive that you must eat two to get your money's worth
D) peanut butter and jelly sandwiches

Question 20

How much _____ Susan obtains from eating green beans is a measure of the utility of green beans for her.

A) efficiency
B) usefulness
C) cost
D) satisfaction

Question 21

Assuming that diminishing marginal utility applies to both pomegranates and bananas,if Vanessa buys more pomegranates and fewer bananas,the _____ utility of pomegranates will _____,and the _____ utility of bananas will _____.

A) marginal;fall;marginal;rise
B) marginal;rise;marginal;fall
C) total;fall;marginal;rise
D) marginal;rise;total;rise

Question 22

The amount by which total utility _____ when an additional unit of a good is consumed is _____.

A) changes;average utility
B) increases;the income effect
C) decreases;maximum utility
D) changes;marginal utility

Question 23

Use the following to answer questions : $$\begin{array}{l}\hline \text { Table: The Utility of Macaroni and Cheese }\\\begin{array} { l r r r r r r r r } \hline \text { Number of servings } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 \\\text { Total utility } & 0 & 10 & 25 & 35 & 60 & 60 & 35 & 25 \\\hline\end{array}\end{array}$$

-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.The marginal utility she derives from the fifth serving she eats is _____ units.

A) 15
B) 10
C) 5
D) 0

Question 24

Use the following to answer questions : $$\begin{array}{l}\hline \text { Table: The Utility of Macaroni and Cheese }\\\begin{array} { l r r r r r r r r } \hline \text { Number of servings } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 \\\text { Total utility } & 0 & 10 & 25 & 35 & 60 & 60 & 35 & 25 \\\hline\end{array}\end{array}$$

-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.Carmen's total utility is maximized after she eats the _____ serving.

A) first
B) second
C) fourth
D) sixth

Question 25

Freddy has eaten three pogos while visiting Canada's Wonderland,and if he eats another,he will get sick on the roller coaster.Knowing this,and ignoring any impact that price might have on his decision,we can say that,for the fourth pogo,the:

A) total utility is less than zero.
B) marginal utility is less than zero.
C) total utility curve is still increasing.
D) marginal utility curve is still increasing.

Question 26

If total utility is rising as more salsa is consumed,we can definitely say that marginal utility is:

A) falling.
B) constant.
C) rising.
D) greater than zero.

Question 27

Use the following to answer questions : $$\begin{array}{l}\hline \text { Table: The Utility of Macaroni and Cheese }\\\begin{array} { l r r r r r r r r } \hline \text { Number of servings } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 \\\text { Total utility } & 0 & 10 & 25 & 35 & 60 & 60 & 35 & 25 \\\hline\end{array}\end{array}$$

-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.The marginal utility she derives from the second serving she eats is _____ units.

A) 35
B) 15
C) 10
D) 5

Question 28

Use the following to answer questions : $$\begin{array}{l}\text { Table: Exercise and Total Utility }\\\begin{array} { l c } \hline \begin{array} { l } \text { Hours of } \\\text { Exercise }\end{array} & \text { Total Utility } \\\hline 0 & 0 \\1 & 5 \\2 & 15 \\3 & 23 \\4 & 29 \\5 & 33 \\\hline\end{array}\end{array}$$

-If total utility is at a maximum,marginal utility is:

A) rising.
B) at its average value.
C) at a maximum.
D) zero.

Question 29

Use the following to answer questions : $$\begin{array}{l}\text { Table: Exercise and Total Utility }\\\begin{array} { l c } \hline \begin{array} { l } \text { Hours of } \\\text { Exercise }\end{array} & \text { Total Utility } \\\hline 0 & 0 \\1 & 5 \\2 & 15 \\3 & 23 \\4 & 29 \\5 & 33 \\\hline\end{array}\end{array}$$

-(Table: Exercise and Total Utility)Use Table: Exercise and Total Utility.The principle of diminishing marginal utility is seen:

A) nowhere,as marginal utility is always increasing.
B) immediately,from the first hour and beyond.
C) between the third and fourth hours.
D) after the second hour of exercise.

Question 30

Use the following to answer questions : $$\begin{array}{l}\hline \text { Table: The Utility of Macaroni and Cheese }\\\begin{array} { l r r r r r r r r } \hline \text { Number of servings } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 \\\text { Total utility } & 0 & 10 & 25 & 35 & 60 & 60 & 35 & 25 \\\hline\end{array}\end{array}$$

-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.The marginal utility she derives from the sixth serving she eats is _____ units.

A) -25
B) 0
C) 25
D) -15

Question 31

As you consume more turkey relative to mashed potatoes,the _____ of turkey eventually decreases.

A) price
B) usefulness
C) marginal utility
D) demand

Question 32

Which statement is TRUE if the principle of diminishing marginal utility applies?

A) When a customer at the Pie Palace continues to eat more pie,each additional piece of pie gives the same marginal utility.
B) When a customer at the Pie Palace continues to eat more pie,each additional piece of pie gives less marginal utility.
C) When a customer at the Pie Palace continues to eat more pie,each additional piece of pie lowers total utility.
D) The total utility of pie is at a maximum,while the marginal utility of pie is still increasing.

Question 33

Use the following to answer questions : $$\begin{array}{l}\text { Table: Exercise and Total Utility }\\\begin{array} { l c } \hline \begin{array} { l } \text { Hours of } \\\text { Exercise }\end{array} & \text { Total Utility } \\\hline 0 & 0 \\1 & 5 \\2 & 15 \\3 & 23 \\4 & 29 \\5 & 33 \\\hline\end{array}\end{array}$$

-(Table: Exercise and Total Utility)Use Table: Exercise and Total Utility.Marginal utility:

A) initially decreases but eventually increases as more exercise is consumed.
B) always decreases as more exercise is consumed.
C) initially increases but eventually decreases as more exercise is consumed.
D) initially increases but eventually stays constant as more exercise is consumed.

Question 34

Use the following to answer questions : $$\begin{array}{l}\text { Table: Exercise and Total Utility }\\\begin{array} { l c } \hline \begin{array} { l } \text { Hours of } \\\text { Exercise }\end{array} & \text { Total Utility } \\\hline 0 & 0 \\1 & 5 \\2 & 15 \\3 & 23 \\4 & 29 \\5 & 33 \\\hline\end{array}\end{array}$$

-When an individual continues to eat more turkey,if the principle of diminishing marginal utility applies,each additional serving yields:

A) more marginal utility.
B) less marginal utility.
C) the same amount of marginal utility.
D) less total utility.

Question 35

The amount by which total utility rises when an additional slice of pie is consumed is called:

A) average utility.
B) the law of diminishing returns.
C) incremental utility.
D) marginal utility.

Question 36

Use the following to answer questions : $$\begin{array}{l}\hline \text { Table: The Utility of Macaroni and Cheese }\\\begin{array} { l r r r r r r r r } \hline \text { Number of servings } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 \\\text { Total utility } & 0 & 10 & 25 & 35 & 60 & 60 & 35 & 25 \\\hline\end{array}\end{array}$$

-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.Carmen's marginal utility from eating macaroni becomes negative at the _____ serving.

A) first
B) second
C) fifth
D) sixth

Question 37

Use the following to answer questions : $$\begin{array}{l}\hline \text { Table: The Utility of Macaroni and Cheese }\\\begin{array} { l r r r r r r r r } \hline \text { Number of servings } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 \\\text { Total utility } & 0 & 10 & 25 & 35 & 60 & 60 & 35 & 25 \\\hline\end{array}\end{array}$$

-(Table: The Utility of Macaroni and Cheese)Use Table: The Utility of Macaroni and Cheese.Carmen loves eating macaroni and cheese on Thanksgiving.Carmen's marginal utility from eating macaroni and cheese is 0 for the _____ serving.

A) first
B) second
C) third
D) fifth

Question 38

The principle of diminishing marginal utility:

A) refers to the tendency of total utility to increase until an individual's budget is no longer constrained.
B) refers to the tendency of marginal utility to decline as the amount of consumption of a good or service increases.
C) indicates that,if a good is inferior,less of it will be purchased when income falls.
D) assumes all goods are normal.

Question 39

The marginal utility of eating sweet potatoes is the:

A) change in total utility from consuming an additional serving.
B) total utility divided by the number of servings consumed.
C) change in total utility divided by the number of servings consumed.
D) total utility divided by the change in the number of servings consumed.

Question 40

The law of diminishing marginal utility indicates that the slope of the marginal utility curve is generally:

A) negative.
B) vertical.
C) horizontal.
D) positive.

Question 41

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones
Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.The horizontal intercept for Faruq's budget line is _____ tacos.

A) 50
B) 10
C) 5
D) 100

Question 42

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones
(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if the price of a cup of tea falls to $0.50?

A) a
B) b
C) c
D) d

Question 43

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones
Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.If Faruq purchases 10 milkshakes,he can purchase _____ tacos.

A) 10
B) 50
C) 8
D) 18

Question 44

Chuck spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.The vertical intercept for Chuck's budget line is _____ milkshakes.

A) 50
B) 10
C) 5
D) 100

Question 45

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones
Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.If Faruq spends all of his income,the opportunity cost of one milkshake is equal to _____ tacos.

A) 2
B) 10
C) 5
D) 1/5

Question 46

Assuming that diminishing marginal utility applies to both goods,if a consumer buys more plastic bins and fewer door hooks,the _____ utility of plastic bins will _____,and the _____ utility of door hooks will _____.

A) marginal;fall;marginal;rise
B) marginal;fall;marginal;fall
C) total;fall;marginal;rise
D) marginal;rise;total;rise

Question 47

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones
Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.If Faruq spends all of his income,the opportunity cost of one taco equals _____ milkshakes.

A) 2
B) 10
C) 5
D) 1/5

Question 48

Joe's budget line reflects the _____ available to Joe if he spends _____ of his income.

A) consumption bundles;all
B) consumption bundles;part
C) utility;all
D) utility;part

Question 49

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones
(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone is $1.Which chart shows what will happen to her budget line if her income increases to $25?

A) a
B) b
C) c
D) d

Question 50

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones
(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if the price of both a cup of tea and a scone increase to $2?

A) a
B) b
C) c
D) d

Question 51

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones
(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if the price of a scone rises to $2?

A) a
B) b
C) c
D) d

Question 52

Use the following to answer questions : $$\begin{array} { l c c } \begin{array} { l } \text { Consumption } \\\text { Bundle }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Clams } \\\text { (kilograms) }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Potatoes } \\\text { (kilograms) }\end{array} \\\hline A & 0 & 10 \\B & 1 & 8 \\C & 2 & 6 \\D & 3 & 4 \\E & 4 & 2 \\F & 5 & 0\end{array}$$

-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.A(n)_____ in the price of potatoes would rotate the budget line,changing the intercept on the _____ axis and moving it _____ the origin.

A) increase;horizontal;away from
B) decrease;horizontal;toward
C) increase;vertical;away from
D) decrease;vertical;away from

Question 53

Use the following to answer questions : $$\begin{array} { l c c } \begin{array} { l } \text { Consumption } \\\text { Bundle }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Clams } \\\text { (kilograms) }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Potatoes } \\\text { (kilograms) }\end{array} \\\hline A & 0 & 10 \\B & 1 & 8 \\C & 2 & 6 \\D & 3 & 4 \\E & 4 & 2 \\F & 5 & 0\end{array}$$

-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.A(n)_____ in the price of clams would rotate the budget line,changing the intercept on the _____ axis and moving it _____ the origin.

A) increase;horizontal;away from
B) decrease;horizontal;away from
C) increase;vertical;toward
D) decrease;vertical;away from

Question 54

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones
Faruq spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.Put tacos on the horizontal axis and milkshakes on the vertical axis.The slope of Faruq's budget line is equal to:

A) -1/5.
B) -5.
C) 1/5.
D) 5.

Question 55

Use the following to answer questions : $$\begin{array} { l c c } \begin{array} { l } \text { Consumption } \\\text { Bundle }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Clams } \\\text { (kilograms) }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Potatoes } \\\text { (kilograms) }\end{array} \\\hline A & 0 & 10 \\B & 1 & 8 \\C & 2 & 6 \\D & 3 & 4 \\E & 4 & 2 \\F & 5 & 0\end{array}$$

-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.A(n)_____ in the price of clams would rotate the budget line,changing the intercept on the _____ axis and moving it _____ the origin.

A) increase;horizontal;toward
B) decrease;horizontal;toward
C) increase;vertical;toward
D) decrease;vertical;away from

Question 56

Chuck spends all of his income on tacos and milkshakes.His income is $100,the price of tacos is $10,and the price of milkshakes is $2.If the price of each good doubles and Chuck's income doubles:

A) Chuck's budget line will be unaffected.
B) Chuck's budget line will shift out.
C) Chuck's budget line will shift in.
D) Chuck will be able to buy more of both goods.

Question 57

Abdul spends all of his income on food (F)and shelter (S).His budget line is given by the equation 5F + 20S = 100.Which consumption bundle is part of his consumption possibilities?

A) 8 units of F and 3 units of S
B) 14 units of F and 2 units of S
C) 0 units of F and 6 units of S
D) 20 units of F and 15 units of S

Question 58

Use the following to answer questions :
Figure: Budget Lines for Tea and Scones
(Figure: Budget Lines for Tea and Scones)Use Figure: Budget Lines for Tea and Scones.For months now,Agnes has had $20 per month to spend on tea and scones.The price of each cup of tea and each scone has been $1.Which chart shows what will happen to her budget line if her income decreases to $10?

A) a
B) b
C) c
D) d

Question 59

Use the following to answer questions : $$\begin{array} { l c c } \begin{array} { l } \text { Consumption } \\\text { Bundle }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Clams } \\\text { (kilograms) }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Potatoes } \\\text { (kilograms) }\end{array} \\\hline A & 0 & 10 \\B & 1 & 8 \\C & 2 & 6 \\D & 3 & 4 \\E & 4 & 2 \\F & 5 & 0\end{array}$$

-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.A(n)_____ in the price of potatoes would rotate the budget line,changing the intercept on the _____ axis and moving it _____ the origin.

A) increase;horizontal;away from
B) decrease;horizontal;toward
C) increase;vertical;toward
D) decrease;vertical;toward

Question 60

Use the following to answer questions : $$\begin{array} { l c c } \begin{array} { l } \text { Consumption } \\\text { Bundle }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Clams } \\\text { (kilograms) }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Potatoes } \\\text { (kilograms) }\end{array} \\\hline A & 0 & 10 \\B & 1 & 8 \\C & 2 & 6 \\D & 3 & 4 \\E & 4 & 2 \\F & 5 & 0\end{array}$$

-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.An increase in income would:

A) rotate the budget line,changing the intercept on the horizontal axis.
B) shift the budget line to the left.
C) rotate the budget line,changing the intercept on the vertical axis.
D) shift the budget line to the right.

Question 61

A consumer's spending is restricted because of:

A) marginal utility.
B) total utility.
C) his or her budget constraint.
D) utility maximization.

Question 62

Use the following to answer questions : $$\begin{array} { l c c } \begin{array} { l } \text { Consumption } \\\text { Bundle }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Clams } \\\text { (kilograms) }\end{array} & \begin{array} { c } \text { Quantity } \\\text { of Potatoes } \\\text { (kilograms) }\end{array} \\\hline A & 0 & 10 \\B & 1 & 8 \\C & 2 & 6 \\D & 3 & 4 \\E & 4 & 2 \\F & 5 & 0\end{array}$$

-(Figure and Table: The Budget Line)Use Figure and Table: The Budget Line.A decrease in income would:

A) rotate the budget line,changing the intercept on the horizontal axis.
B) shift the budget line to the left.
C) rotate the budget line,changing the intercept on the vertical axis.
D) shift the budget line to the right.

Question 63

Use the following to answer questions :
Scenario: Tom's Budget Constraint
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
(Scenario: Tom's Budget Constraint)Use Scenario: Tom's Budget Constraint.If we place music downloads on the horizontal axis and movies on the vertical axis,the slope of Tom's budget line is:

A) -10.
B) -1/5.
C) -2.
D) -1/2.

Question 64

A decrease in a consumer's income will NOT:

A) shift the budget line away from the origin.
B) decrease the horizontal intercept.
C) decrease the vertical intercept.
D) reduce the individual's consumption possibilities.

Question 65

Adam has a monthly income of $20 that can be spent on books (B)and pencils (P).The price of a book is $5 and the price of a pencil is $0.50.Which bundle of books and pencils is affordable for Adam,but does not use all of his income?

A) 1 book and 30 pencils
B) no book and 40 pencils
C) 2 books and 20 pencils
D) 1 book and 22 pencils

Question 66

A line representing all possible combinations of two commodities that a consumer can purchase at a particular time,given the market prices of the commodities and the consumer's income,is a(n):

A) budget line.
B) consumption line.
C) income consumption curve.
D) indifference curve.

Question 67

Use the following to answer questions :
Figure: Budget Lines for Oranges and Apples
(Figure: Budget Lines for Oranges and Apples)Use Figure: Budget Lines for Oranges and Apples.For some time,Antonio has had $5 per month to spend on oranges and apples.The price of an orange is $0.50 and the price of an apple is $0.25.Which chart shows what will happen to his budget line if his income increases to $6?

A) A
B) B
C) C
D) D

Question 68

Use the following to answer questions :
Scenario: Tom's Budget Constraint
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
The slope of a budget line for a consumer buying two goods is equal to the _____ of the price of the good on the _____ axis divided by the price of the good on the _____ axis.

A) positive;vertical;horizontal
B) negative;horizontal;vertical
C) positive;horizontal;vertical
D) negative;vertical;horizontal

Question 69

Adam has a monthly income of $20 that can be spent on books (B)and pencils (P).The price of a book is $5 and the price of a pencil is $0.50.Which bundle of books and pencils is NOT affordable for Adam?

A) 4 books and no pencils
B) 2 books and 30 pencils
C) 1 book and 20 pencils
D) 2 books and 20 pencils

Question 70

Use the following to answer questions :
Scenario: Tom's Budget Constraint
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
(Scenario: Tom's Budget Constraint)Use Scenario: Tom's Budget Constraint.The combination of _____ music downloads and _____ movies lies OUTSIDE Tom's budget line (meaning Tom cannot afford this combination).

A) 50;10
B) 50;0
C) 0;5
D) 20;5

Question 71

Use the following to answer questions :
Figure: Budget Lines for Oranges and Apples
(Figure: Budget Lines for Oranges and Apples)Use Figure: Budget Lines for Oranges and Apples.For some time,Antonio has had $5 per month to spend on oranges and apples.The price of an orange is $0.50 and the price of an apple is $0.25.Which chart shows what will happen to his budget line if the price of an orange falls to $0.25?

A) A
B) B
C) C
D) D

Question 72

An increase in a consumer's income will NOT:

A) shift the budget line away from the origin.
B) increase the horizontal intercept.
C) increase the vertical intercept.
D) change the slope of the budget line.

Question 73

Use the following to answer questions :
Scenario: Tom's Budget Constraint
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
(Scenario: Tom's Budget Constraint)Use Scenario: Tom's Budget Constraint.The combination of _____ music downloads and _____ movies lies INSIDE Tom's budget line (meaning Tom can afford this combination,but he will not be spending the entire $50).

A) 50;10
B) 50;0
C) 0;5
D) 100;5

Question 74

Use the following to answer questions :
Figure: Budget Lines for Oranges and Apples
(Figure: Budget Lines for Oranges and Apples)Use Figure: Budget Lines for Oranges and Apples.For some time,Antonio has $5 per month to spend on oranges and apples.The price of an orange is $0.50 and the price of an apple is $0.25.Which chart shows what will happen to his budget line if the price of an apple rises to $0.50?

A) A
B) B
C) C
D) D

Question 75

Use the following to answer questions :
Scenario: Tom's Budget Constraint
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
(Scenario: Tom's Budget Constraint)Use Scenario: Tom's Budget Constraint.The combination of _____ music downloads and _____ movies lies ON Tom's budget line.

A) 50;10
B) 50;0
C) 0;5
D) 100;5

Question 76

Use the following to answer questions :
Figure: Budget Lines for Oranges and Apples
(Figure: Budget Lines for Oranges and Apples)Use Figure: Budget Lines for Oranges and Apples.For some time,Antonio has had $5 per month to spend on oranges and apples.The price of an orange is $0.50 and the price of an apple is $0.25.Which chart shows what will happen to his budget line if the price of an orange rises to $1.00 and the price of an apple rises to $0.50?

A) A
B) B
C) C
D) D

Question 77

Use the following to answer questions :
Figure: Budget Lines for Oranges and Apples
(Figure: Budget Lines for Oranges and Apples)Use Figure: Budget Lines for Oranges and Apples.For some time,Antonio has had $5 per month to spend on oranges and apples.The price of an orange is $0.50 and the price of an apple is $0.25.Which chart shows what will happen to his budget line if his income decreases to $2.50?

A) A
B) B
C) C
D) D

Question 78

Whatever the time period in question,Molly's spending will be _____ by her _____.

A) unlimited;marginal utility
B) limited;marginal utility
C) limited;budget
D) unlimited;budget

Question 79

Use the following to answer questions :
Figure: Budget Lines for Oranges and Apples
(Figure: Budget Lines for Oranges and Apples)Use Figure: Budget Lines for Oranges and Apples.For some time,Antonio has had $5 per month to spend on oranges and apples.The price of an orange is $0.50 and the price of an apple is $0.25.Which chart shows what will happen to his budget line if the prices of the two goods fall by 20%?

A) A
B) B
C) C
D) D

Question 80

Adam has a monthly income of $20 that can be spent on books (B)and pencils (P).The price of a book is $5 and the price of a pencil is $0.50.The equation for Adam's daily budget constraint can be written as:

A) 5(B)+ 0.50(P) $\le$ 20.
B) 0.50(B)+ 5(P) $\le$ 20.
C) 20(B)+ 0.50(P) $\le$ 5.
D) 0.50(B)+ 20(P) $\le$ 5.