To describe the slope of an indifference curve, which of the following statements is true? a) Slopes will vary along an usual indifference curve for to normal goods that an individual is purchasing b) Slopes will be the same along an indifference curve for two perfect substitutes goods that an individual is purchasing c) Slopes will be a right angle for each indifference curve for two perfect complement goods that an individual is purchasing d) All of the above 2) A consumer has preferences over two goods X and Y and satisfies the property of ‘more is better’. If the consumer’s income doubles and prices remain unchanged then which of the following statements is necessarily false? a) The demand for good X will increase b) The demand for both goods will increase c) The demand for good Y will decrease d) The demand for both goods will decrease 3) Suppose an individual has preferences over two goods---good X and good Y. If this individual is maximising their utility and pX=pY then: a) Goods X and Y will be consumed in equal quantities. b) The marginal utility of good X must be equal to the marginal utility of good Y. c) The marginal utility of good X must exceed the marginal utility of good Y. d) The marginal utility of good Y must exceed the marginal utility of good X.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1) To describe the slope of an indifference curve, which of the following statements is true?

a) Slopes will vary along an usual indifference curve for to normal goods that an individual is purchasing

b) Slopes will be the same along an indifference curve for two perfect substitutes goods that an individual is purchasing

c) Slopes will be a right angle for each indifference curve for two perfect complement goods that an individual is purchasing

d) All of the above

A consumer has preferences over two goods X and Y and satisfies the property of ‘more is better’. If the consumer’s income doubles and prices remain unchanged then which of the following statements is necessarily false?

a) The demand for good X will increase

b) The demand for both goods will increase

c) The demand for good Y will decrease

d) The demand for both goods will decrease

Suppose an individual has preferences over two goods---good X and good Y. If this individual is maximising their utility and p_X=p_Y then:

a) Goods X and Y will be consumed in equal quantities.

b) The marginal utility of good X must be equal to the marginal utility of good Y.

c) The marginal utility of good X must exceed the marginal utility of good Y.

d) The marginal utility of good Y must exceed the marginal utility of good X.

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