QUESTION #1: As you move down an indifference curve, the absolute value of the slope A) increases. B) decreases. C) remains constant. D) initially increases and then decreases.
QUESTION #1: As you move down an indifference curve, the absolute value of the slope A) increases. B) decreases. C) remains constant. D) initially increases and then decreases.
Chapter3: Preferences And Utility
Section: Chapter Questions
Problem 3.7P
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Transcribed Image Text:QUESTION #1: As you move down an indifference curve, the absolute value of the slope
A) increases.
B) decreases.
C) remains constant.
D) initially increases and then decreases.
QUESTION #2: The slope of the indifference curve is equal to which of the following?
A. One
B. Marginal utility
C. Marginal rate of substitution
D. None of these
QUESTION #3: Why is the indifference curve convex to origin?
A. Due to continuous decline of marginal rate of substitution
B. Due to law of diminishing marginal utility
C. Due to monotonic preferences
D. Both a and b
QUESTION #4: As we move down the indifference curve from left to right, the slope of theindifference curve
tends to which of the following?
A. Unity
B. Zero
C. Decline
D. Risk
QUESTION #5: In the indifference map, a higher IC indicates which of the following?
A. Lower level of satisfaction
B. Higher level of satisfaction
C. Same level of satisfaction
D. Either higher or same level of satisfaction
QUESTION #6: Leo has Php500 a week to spend on clothing and food. The price of clothing is Php25 and the price
of food is Php10. The pairs of clothing and food that are in the Leo's choice set include
_units of clothing and
_units of food.
A) 20; 50
B) 50; 50
C) 10; 25
D) 0; 500
Transcribed Image Text:QUESTION #7: Leo has Php500 a week to spend on food (f) and clothing (c). The price of food is Php10and the price of
clothing is Php25. What is the equation for Jane's budget constraint?
A) Food + Clothing < Php500
B) Php10 x Food + Php25 x Clothing > Php500
C) Php10x Food/Php25 x Clothing = Php500
D) Php10 x Food + Php25 x Clothing = Php500
Refer to the information provided in Figure 6.1 below to answer the questions that follow.
40
Eon's monthly budget constraint
B D
с
A) A.
B) B.
C) E.
D) D.
0
20
Number of hamburgers per month
QUESTION #8: Refer to Figure 6.1. Assume Eon is on budget constraint AC. If the price of a hamburgeris Php5, Tom's
monthly income is
A) Php20.
B) Php60.
C) Php100.
D) Php300.
QUESTION #9: Refer to Figure 6.1. The slope of budget constraint AC is
A)-5.0.
B)-2.0.
C) -0.5.
D) indeterminate from this information because prices are not given.
QUESTION #10: Refer to Figure 6.1. Assume Eon's budget constraint is AC. He does not spend hisentire income at
point
A) A.
B) B.
C) D.
D) E.
QUESTION #11: Refer to Figure 6.1. Assume Eon's budget is AC. Given his current monthly income hecannot purchase
the bundle of goods at point
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