2017-5-30 Thinkwell | Test for Chapter 3 Test for Chapter 3 Take: 1 | 05/30/17 Directions:
Choose the best answer. 1) Examine the graph below. If the price of good X is
$1, and the consumer is using budget constraint 1,
the price of good Y must be $2. true false 2) The marginal rate of substitution is greater than the
slope of the budget constraint; that is, the
consumer is willing to give up more soda than the
market requires at point http://my.thinkwell.com/twtest/printrandom.cfm a. b. c. d. 1/8 2017-5-30 Thinkwell | Test for Chapter 3 3) Refer to the graph below. U0, U1, and U2 are
indifference curves for a consumer choosing ice
cream cones and soda. The equilibrium position for
this consumer is any point on the budget constraint. point a. point d. point c. 4) When the price of good X falls, more of that good
find any combination of goods that falls on the
will be consumed. To find the highest satisfaction budget line.
from a combination of goods, the consumer will
find a combination that falls on the new budget line and is tangent to an indifference curve.
find a combination of goods that maximizes the consumer’s utility within the constraint of his
new budget.
both B and C. 5) An indifference curve that lies tangent to the
budget constraint illustrates the combination of
goods X and Y that provide the consumer the least
satisfaction. http://my.thinkwell.com/twtest/printrandom.cfm true false 2/8 2017-5-30 Thinkwell | Test for Chapter 3 6) Jack likes to play golf. Although he is experiencing
diminishing marginal utility, his marginal utility
remains positive. We can say that Jack’s total utility
is increasing at a decreasing rate. increasing at an increasing rate. decreasing at a decreasing rate. decreasing at an increasing rate. 7) When marginal utility becomes negative, total utility
begins to increase. true false 8) Suppose Valerie is consuming one novel per week
Yes. She does not want to change her
and one movie per week. Further assume that the consumption.
marginal utility of novels is 40 utils, and the
No. She needs to buy more novels and see
marginal utility of movies is 50 utils. If each novel fewer movies.
and each movie costs $4.00, is Valerie attaining
No. She needs to buy fewer novels and see
consumer equilibrium? more movies.
There is not enough information to answer the question.
9) If a person is receiving greater utility per dollar
from consuming apples than from consuming
oranges, then the person is maximizing her total
utility. http://my.thinkwell.com/twtest/printrandom.cfm true false 3/8 2017-5-30 Thinkwell | Test for Chapter 3 10) The economic interpretation of an indifference
curve is a map of the consumer's preferences.
all combinations of two goods that a consumer
can afford.
the rate at which the consumer is willing to
trade one good for another to remain equally
satisfied.
the maximum amounts of the two goods that the
consumer will accept, given his / her budget. 11) An indifference curve is a set of points representing three; unequally
combinations of ________ goods that a consumer three; equally
finds __________ desirable and satisfying. two; unequally two; equally
12) When a consumer optimizes his / her satisfaction at the consumer can increase his / her satisfaction
a point at which an indifference curve is tangent to only by increasing his / her income.
the budget constraint,
two indifference curves will intersect at the tangency point.
the consumer cannot increase his / her income. the consumer is likely to be at a sub-optimal level of consumption.
13) The slope of a consumer’s budget constraint is the
opportunity cost of buying one good in terms of
how much of the other that he gives up. http://my.thinkwell.com/twtest/printrandom.cfm true false 4/8 2017-5-30 Thinkwell | Test for Chapter 3 14) If a consumer’s income increases, that consumer’s
budget constraint shifts inward toward the origin. does not change. pivots on the vertical axis. shifts outward away from the origin. 15) When a consumer’s income decreases, the
consumer’s budget constraint shifts outward. shifts inward. pivots on one of the axes. does not move. 16) Examine the budget constraint for a consumer who
has an income of $4. What is the price of paper? http://my.thinkwell.com/twtest/printrandom.cfm $2 each $0.50 each $4 each $1.50 each 5/8 2017-5-30 Thinkwell | Test for Chapter 3 17) Examine the budget constraint. If the consumer has 0
an income of $4, how many units of scissors can 1
he or she buy after buying 6 units of paper? 2 4 18) The slope of a consumer’s budget constraint represents the ___________ of buying one good in terms of
the quantity of the other good the consumer gives up.
19) Examine the budget constraint for a consumer who
has an income of $4. What is the slope of this
constraint? http://my.thinkwell.com/twtest/printrandom.cfm −1/2 1/2 −2 2 6/8 2017-5-30 Thinkwell | Test for Chapter 3 20) If the total utility of one pie is 5 utils, and the total
utility of two pies is 4 utils, the marginal utility of
the second pie is 9 utils. 1 util. -1 util. -9 utils. 21) Mary likes pie. Her total utility is the ____________
satisfaction from eating _____________ pie(s). additional; one more additional; all the total; one more total; units of 22) In a two-good model, total utility is maximized
when the marginal utilities per dollar spent on each
good are equal.
the total utilities per dollar spent on each good
are equal.
the marginal utilities per dollar spent on each
good are maximized.
the total utilities per dollar spent on each good
are maximized. 23) If Bill is receiving a greater utility per dollar from
consuming boats than from consuming houses,
then Bill is not maximizing his total utility. http://my.thinkwell.com/twtest/printrandom.cfm true false 7/8 2017-5-30 Thinkwell | Test for Chapter 3 24) The consumer is willing to give up more of good Y
to get more of good X than the market requires at
point F. B. D. E. 25) Examine the indifference map below. If this purchase more of good X and less of good Y.
consumer is consuming combination E, then we can purchase more of good Y and less of good X.
predict that he / she will eventually remain at this point. try to get to point B to maximize satisfaction. http://my.thinkwell.com/twtest/printrandom.cfm 8/8

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