Question 1

The magnitude of the slope of an indifference curve is the marginal

Accepted Answer

The magnitude of the slope of an indifference curve represents the rate at which a consumer is willing to substitute one good for another while remaining indifferent (equally satisfied) with their overall level of satisfaction or utility. This is known as the marginal rate of substitution (MRS). Therefore, choice A is the correct answer. Choices B, C, and D are not related to the concept of the slope of an indifference curve.

Question 2

-The indifference curves in the figure above (I₁, I₂, and I₃) reflect Peter's consumption preferences. If Peter consumes 24 slices of pizza and 24 chocolate bars per month, he as satisfied as he would be consuming ________ slices of pizza and ________ chocolate bars per month.

Accepted Answer

Indifference curves represent combinations of goods that provide the same level of satisfaction. If Peter is equally satisfied with 24 slices of pizza and 24 chocolate bars, he would be on the same indifference curve with 48 slices of pizza and 12 chocolate bars, assuming the curve is convex and the trade-off between goods is consistent.

Question 3

Jodie has indifference curves for CDs and colas, with CDs on the vertical axis. The flatter her indifference curves are, the

Accepted Answer

Indifference curves represent the combinations of CDs and colas that give Jodie the same level of satisfaction. The slope of the indifference curve indicates the marginal rate of substitution (MRS), which is the amount of cola Jodie is willing to give up for one more CD. The flatter the indifference curve, the smaller the MRS and the less willing Jodie is to trade one good for another. Therefore, the correct choice is (C) smaller her marginal rate of substitution.

Question 4

Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants

Accepted Answer

This scenario describes the law of diminishing marginal rate of substitution (MRS), which states that as a consumer increases the quantity consumed of one good, they must decrease the quantity consumed of the other good in order to remain on the same indifference curve. Therefore, as Bobby has more and more pants, he will trade fewer and fewer shirts for yet another pair of pants, since he is already consuming a relatively large quantity of pants and values each additional pant less and less. This means that the MRS of pants for shirts decreases, leading to a decrease in the number of shirts Bobby is willing to trade for yet another pair of pants.

Question 5

Which of the following statements about the marginal rate of substitution is NOT correct?

Accepted Answer

The marginal rate of substitution measures the number of units of the good on the vertical axis that a consumer must be compensated with to give up a unit of the good on the horizontal axis, not the other way around.

Question 6

The marginal rate of substitution is equal to the

Accepted Answer

The marginal rate of substitution (MRS) measures how much of one good a consumer is willing to give up in order to obtain an additional unit of another good while remaining indifferent between the two. This is measured by the slope of the indifference curve at a point. Therefore, the correct answer is C, the magnitude of the slope of the indifference curve. Choices A, B, and D are incorrect because they do not accurately describe the concept of MRS.

Question 7

In an indifference curve diagram, the quantities of good Y are measured along the vertical axis and the quantities of good X are measured along the horizontal axis. The marginal rate of substitution is defined as

Accepted Answer

The marginal rate of substitution (MRS) measures how much of good Y (the vertical axis) the consumer is willing to give up in exchange for one more unit of good X (the horizontal axis). Therefore, option B is the correct choice as it describes the definition of MRS accurately. Option A describes the concept of opportunity cost rather than MRS, option C describes relative price, and option D is a vague statement that does not accurately describe the concept of MRS.

Question 8

-Lizzie's preferences are shown in the figure above. Which of the following combinations of goods does Lizzie prefer the most?

Accepted Answer

Lizzie prefers combinations of goods that are on higher indifference curves. Indifference curve U2 is higher than U1, so Lizzie prefers combinations of goods on U2. Of the given options, only (A) is on U2.

Question 9

The magnitude of the slope of an indifference curve

Accepted Answer

The magnitude of the slope of an indifference curve is equal to the marginal rate of substitution (MRS), which measures the rate at which a consumer is willing to trade one good for another while remaining indifferent to the level of satisfaction.

Question 10

-Lizzie's preferences are shown in the figure above. Lizzie is just as happy to have ________ as she is to have ________.

Accepted Answer

The answer of 
-Lizzie's preferences are shown in the figure...

Question 11

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming ________ to consuming ________.

Accepted Answer

The answer of 
-Lizzie's preferences are shown in the figure...

Question 12

The marginal rate of substitution is equal to the ________.

Accepted Answer

The marginal rate of substitution measures the rate at which a consumer is willing to trade off one good for another while remaining at the same level of utility. It is equal to the magnitude of the slope of the indifference curve, indicating how much of one good a consumer is willing to give up for an additional unit of another good. The other options (A, C, D) do not directly measure the marginal rate of substitution.

Question 13

-The indifference curves in the figure above (I₁, I₂, and I₃) reflect Peter's consumption preferences. Which of the following combinations of goods does Peter prefer the most?

Accepted Answer

Peter prefers the combination of goods that is on the highest indifference curve. I₃ is the highest indifference curve, and the combination of goods that is on I₃ is 40 slices of pizza and 20 chocolate bars.

Question 14

The marginal rate of substitution is

Accepted Answer

The marginal rate of substitution (MRS) is the rate at which a consumer is willing to give up one good to obtain an additional unit of another good while remaining on the same level of utility (indifference curve). In other words, it represents the amount of one good that a consumer is willing to forego in order to obtain an extra unit of the other good.

Question 15

The rate at which a person is willing to give up a gallon of gasoline to get one more pound of coffee and remain on the same indifference curve is called his or her

Accepted Answer

The situation described in the question is an example of the marginal rate of substitution (MRS), which is the rate at which a person is willing to trade one good for another while remaining on the same indifference curve. The MRS represents the relative value that the person places on the two goods and is a key concept in determining consumer behavior and preferences. Option A refers to the relative cost of coffee in terms of gasoline, which is not directly related to the MRS. Option B, the indifference cost of coffee, is not a commonly used term in economics. Option C, personal price of coffee, does not accurately capture the concept of the MRS.

Question 16

An indifference diagram has movies on the vertical axis and sodas on the horizontal axis. As the consumption of sodas increases, the marginal rate of substitution ________ and the indifference curve becomes ________.

Accepted Answer

The marginal rate of substitution (MRS) measures the rate at which a consumer is willing to exchange one good for another while remaining on the same indifference curve. As the consumption of sodas increases, the marginal utility of sodas falls and the marginal utility of movies remains constant. Thus, the consumer is willing to give up fewer movies for each additional soda, indicating a lower MRS. This causes the indifference curve to become flatter. Therefore, the correct choice is A, which states that the marginal rate of substitution falls and the indifference curve becomes flatter.

Question 17

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming ________ to consuming ________.

Accepted Answer

Lizzie's preferences indicate that she prefers more of a good to less, so she would prefer 4 comic books and 12 cookies over 2 comic books and 12 cookies.

Question 18

-The indifference curves in the figure above (I₁, I₂, and I₃) reflect Peter's consumption preferences. Peter prefers consuming ________ to consuming ________.

Accepted Answer

The answer of 
-The indifference curves in the figure above...

Question 19

As Sam moves rightward along his indifference curve, his marginal rate of substitution

Accepted Answer

According to the law of diminishing marginal utility, as a consumer consumes more of a good, the marginal utility derived from each additional unit decreases. Therefore, as Sam moves rightward along his indifference curve (consuming more of one good), his marginal rate of substitution (the rate at which he is willing to trade one good for another) will decrease, indicating diminishing marginal utility.

Question 20

The rate at which Sam is willing to give up a gallon of gasoline to get one more pound of coffee, and remain on the same indifference curve is called his

Accepted Answer

The scenario described pertains to the concept of marginal rate of substitution (MRS) which refers to the rate at which a consumer is willing to trade one good for another while remaining at the same level of satisfaction (indifference curve). Therefore, the correct answer is D. Option A refers to the opportunity cost of coffee, which is the value of the next best alternative foregone while choosing coffee. Option B is incorrect as it refers to the opportunity cost of gasoline, which is the value of the next best alternative foregone when using gasoline. Option C is incorrect as it states personal price of coffee, which is not a commonly used term in economics.

Quiz 9: Possibilities, Preferences, and Choices

The magnitude of the slope of an indifference curve is the marginal

-The indifference curves in the figure above (I₁, I₂, and I₃) reflect Peter's consumption preferences. If Peter consumes 24 slices of pizza and 24 chocolate bars per month, he as satisfied as he would be consuming slices of pizza and chocolate bars per month.

Jodie has indifference curves for CDs and colas, with CDs on the vertical axis. The flatter her indifference curves are, the

Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants

Which of the following statements about the marginal rate of substitution is NOT correct?

The marginal rate of substitution is equal to the

In an indifference curve diagram, the quantities of good Y are measured along the vertical axis and the quantities of good X are measured along the horizontal axis. The marginal rate of substitution is defined as

-Lizzie's preferences are shown in the figure above. Which of the following combinations of goods does Lizzie prefer the most?

The magnitude of the slope of an indifference curve

-Lizzie's preferences are shown in the figure above. Lizzie is just as happy to have as she is to have .

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming to consuming .

The marginal rate of substitution is equal to the ________.

-The indifference curves in the figure above (I₁, I₂, and I₃) reflect Peter's consumption preferences. Which of the following combinations of goods does Peter prefer the most?

The marginal rate of substitution is

The rate at which a person is willing to give up a gallon of gasoline to get one more pound of coffee and remain on the same indifference curve is called his or her

An indifference diagram has movies on the vertical axis and sodas on the horizontal axis. As the consumption of sodas increases, the marginal rate of substitution and the indifference curve becomes .

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming to consuming .

-The indifference curves in the figure above (I₁, I₂, and I₃) reflect Peter's consumption preferences. Peter prefers consuming to consuming .

As Sam moves rightward along his indifference curve, his marginal rate of substitution

The rate at which Sam is willing to give up a gallon of gasoline to get one more pound of coffee, and remain on the same indifference curve is called his

Quiz 9: Possibilities, Preferences, and Choices

The magnitude of the slope of an indifference curve is the marginal

-The indifference curves in the figure above (I1, I2, and I3) reflect Peter's consumption preferences. If Peter consumes 24 slices of pizza and 24 chocolate bars per month, he as satisfied as he would be consuming ________ slices of pizza and ________ chocolate bars per month.

Jodie has indifference curves for CDs and colas, with CDs on the vertical axis. The flatter her indifference curves are, the

Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants

Which of the following statements about the marginal rate of substitution is NOT correct?

The marginal rate of substitution is equal to the

In an indifference curve diagram, the quantities of good Y are measured along the vertical axis and the quantities of good X are measured along the horizontal axis. The marginal rate of substitution is defined as

-Lizzie's preferences are shown in the figure above. Which of the following combinations of goods does Lizzie prefer the most?

The magnitude of the slope of an indifference curve

-Lizzie's preferences are shown in the figure above. Lizzie is just as happy to have ________ as she is to have ________.

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming ________ to consuming ________.

The marginal rate of substitution is equal to the ________.

-The indifference curves in the figure above (I1, I2, and I3) reflect Peter's consumption preferences. Which of the following combinations of goods does Peter prefer the most?

The marginal rate of substitution is

The rate at which a person is willing to give up a gallon of gasoline to get one more pound of coffee and remain on the same indifference curve is called his or her

An indifference diagram has movies on the vertical axis and sodas on the horizontal axis. As the consumption of sodas increases, the marginal rate of substitution ________ and the indifference curve becomes ________.

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming ________ to consuming ________.

-The indifference curves in the figure above (I1, I2, and I3) reflect Peter's consumption preferences. Peter prefers consuming ________ to consuming ________.

As Sam moves rightward along his indifference curve, his marginal rate of substitution

The rate at which Sam is willing to give up a gallon of gasoline to get one more pound of coffee, and remain on the same indifference curve is called his

-The indifference curves in the figure above (I₁, I₂, and I₃) reflect Peter's consumption preferences. If Peter consumes 24 slices of pizza and 24 chocolate bars per month, he as satisfied as he would be consuming slices of pizza and chocolate bars per month.

-Lizzie's preferences are shown in the figure above. Lizzie is just as happy to have as she is to have .

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming to consuming .

-The indifference curves in the figure above (I₁, I₂, and I₃) reflect Peter's consumption preferences. Which of the following combinations of goods does Peter prefer the most?

An indifference diagram has movies on the vertical axis and sodas on the horizontal axis. As the consumption of sodas increases, the marginal rate of substitution and the indifference curve becomes .

-Lizzie's preferences are shown in the figure above. Lizzie definitely prefers consuming to consuming .

-The indifference curves in the figure above (I₁, I₂, and I₃) reflect Peter's consumption preferences. Peter prefers consuming to consuming .