Question 1

Demand curves slope downward because
A) the substitution effect, which is always positive, dominates or reinforces the income effect.
B) the substitution effect, which is always negative, dominates or reinforces the income effect.
C) the income effect, which is always positive, dominates or reinforces the substitution effect.
D) the income effect, which is always negative, dominates or reinforces the substitution effect.

Accepted Answer

The substitution effect, which is always negative, explains why consumers will buy less of a good as its price rises, substituting it with cheaper alternatives. This effect contributes to the downward slope of demand curves.

Question 2

refer to the following graph: -The consumer's demand curve for X is A) D₁. B) D₂. C) D₃. D) D₄.

Accepted Answer

The answer of refer to the following graph:

-The consumer's demand...

Question 3

An individual's demand curve for X
A) shows that the income effect is always negative.
B) depends on how the individual's utility-maximizing choices change when the price of X changes.
C) depends on how the individual's money income changes when the price of X changes.
D) depends on how the individual's preferences change when the price of X changes.
E) both a and c

Accepted Answer

An individual's demand curve for a good, such as X, is derived from how their utility-maximizing choices change when the price of that good changes, holding other factors constant. This reflects the relationship between the price of the good and the quantity demanded.

Question 4

refer to the following graphs:

The price of Y is $15 per unit.
-What 
A) 12
B) 15
C) 20
D) 25
E) none of the above

Accepted Answer

The answer of refer to the following graphs:
 
 ...

Question 5

refer to the following graphs:

The price of Y is $15 per unit.
-What is

A) 10
B) 12
C) 18
D) 20
E) none of the above

Accepted Answer

The answer of refer to the following graphs:
 
 ...

Question 6

If the total utility of five units of X is 45 units of utility and the marginal utility of the fifth unit is 3, then
A) the total utility of four units is 42 units.
B) the demand curve is likely to be upward sloping.
C) the good is a Giffen good.
D) the substitution effect is equal to 3.

Accepted Answer

The total utility of four units is found by subtracting the marginal utility of the fifth unit (3 units) from the total utility of five units (45 units), resulting in 42 units of total utility for four units.

Question 7

Fill-in-the-Blank
-Along an indifference curve ____________ is constant.

Accepted Answer

The answer of Fill-in-the-Blank
-Along an indifference curve ____________ is constant....

Question 8

Fill-in-the-Blank
-The rate at which a consumer is willing to substitute one good for another, holding utility constant, is given by the ____________ of an indifference curve. This rate is called the _________________________________.

Accepted Answer

The answer of Fill-in-the-Blank
-The rate at which a consumer is...

Question 9

Fill-in-the-Blank
-If at a given combination of X and Y, a consumer's marginal rate of substitution is 4, this means that the consumer is willing to give up ______ units of Y for another X or ______ units of X for another Y.

Accepted Answer

The answer of Fill-in-the-Blank
-If at a given combination of X...

Question 10

Fill-in-the-Blank
-If a consumer is choosing the levels of goods X and Y in order to maximize utility with a given budget the _________ equals the ____________ ratio of the goods.

Accepted Answer

The answer of Fill-in-the-Blank
-If a consumer is choosing the levels...

Question 11

Fill-in-the-Blank
-The rate at which a consumer can substitute one good for another in the market is given by the ______ of the budget line and is equal to the __________ratio of the two goods.

Accepted Answer

The answer of Fill-in-the-Blank
-The rate at which a consumer can...

Question 12

Sally consumes only two goods, A and B. The prices are P_A = $10 and P_B = $15. For the last units of each good the marginal utilities are MU_A = 30 and MU_B = 40. Sally should consume more ______ and less ______ because ____________ is greater than ____________. When Sally reaches equilibrium her MRS will be ______.

Accepted Answer

The answer of Sally consumes only two goods, A and...

Question 13

A. Demand curves slope downward because the __________________ effect of a price change is negative and dominates the _____________________ effect, which can be either positive or negative. Thus the ______ effect is negative.
B.	Market demand is the _____________ summation of the ______________ of all the consumers in the market.

Accepted Answer

The answer of A. Demand curves slope downward because the...

Question 14

The following questions refer to the following graph of a consumer's indifference curve.
 
-What is the consumer's marginal rate of substitution between points A and C? ______. Moving between these points, the consumer is willing to give up ______ units of Y for another X or ______ units of X for another Y.

Accepted Answer

The answer of The following questions refer to the following...

Question 15

The following questions refer to the following graph of a consumer's indifference curve.
 
-What is the consumer's marginal rate of substitution between points C and B? ______. Moving between these points the consumer is willing to give up ______ units of Y for another X or ______ units of X for another Y.

Accepted Answer

The answer of The following questions refer to the following...

Question 16

The following questions refer to the following graph of a consumer's indifference curve.
 
-At point C the consumer's marginal rate of substitution at point is approximately ______. This means that the consumer is willing to substitute at a rate of ______ units of Y for one more X or ______ X for one Y.

Accepted Answer

The answer of The following questions refer to the following...

Question 17

Use the following graph showing two budget lines, LR and LZ to answer the following questions. The consumer's income is $720.
 
-For budget line LR the price of Y is $______ and the price of X is $______. The equation for budget line LR is ________________________.

Accepted Answer

The answer of Use the following graph showing two budget...

Question 18

Use the following graph showing two budget lines, LR and LZ to answer the following questions. The consumer's income is $720.
 
-For budget line LM the price of Y is $______ and the price of X is $______. The equation for budget line LM is _____________________.

Accepted Answer

The answer of Use the following graph showing two budget...

Question 19

Use the following graph showing a consumer's budget line and some indifference curves to answer the following questions. The consumer's income is $600.
 
-The price of Y is $______ and the price of X is $______. The consumer should buy _____ unit of X and ______ units of Y. In equilibrium the marginal rate of substitution is _____.

Accepted Answer

The answer of Use the following graph showing a consumer's...

Question 20

Use the following graph showing a consumer's budget line and some indifference curves to answer the following questions. The consumer's income is $600.
 
-If the consumer is buying the combination at point A, the MRS is ________________ (greater, less) than the price _________, so the consumer should buy more ______ and less ______ in order to increase utility. The consumer would buy no combination on indifference curve III because _______________.

Accepted Answer

The answer of Use the following graph showing a consumer's...

Quiz 5: Theory of Consumer Behavior

Demand curves slope downward because

refer to the following graph: -The consumer's demand curve for X is

An individual's demand curve for X

refer to the following graphs: The price of Y is $15 per unit. -What is

refer to the following graphs: The price of Y is $15 per unit. -What is

If the total utility of five units of X is 45 units of utility and the marginal utility of the fifth unit is 3, then

Fill-in-the-Blank -Along an indifference curve ____________ is constant.

Fill-in-the-Blank -The rate at which a consumer is willing to substitute one good for another, holding utility constant, is given by the of an indifference curve. This rate is called the _____________________.

Fill-in-the-Blank -If at a given combination of X and Y, a consumer's marginal rate of substitution is 4, this means that the consumer is willing to give up units of Y for another X or units of X for another Y.

Fill-in-the-Blank -If a consumer is choosing the levels of goods X and Y in order to maximize utility with a given budget the _ equals the ____ ratio of the goods.

Fill-in-the-Blank -The rate at which a consumer can substitute one good for another in the market is given by the of the budget line and is equal to the ____ratio of the two goods.

Sally consumes only two goods, A and B. The prices are P_A = $10 and P_B = $15. For the last units of each good the marginal utilities are MU_A = 30 and MU_B = 40. Sally should consume more and less because __ is greater than . When Sally reaches equilibrium her MRS will be .

A. Demand curves slope downward because the ______ effect of a price change is negative and dominates the _ effect, which can be either positive or negative. Thus the effect is negative. B. Market demand is the _ summation of the ________ of all the consumers in the market.

The following questions refer to the following graph of a consumer's indifference curve. -What is the consumer's marginal rate of substitution between points A and C? . Moving between these points, the consumer is willing to give up units of Y for another X or __ units of X for another Y.

The following questions refer to the following graph of a consumer's indifference curve. -What is the consumer's marginal rate of substitution between points C and B? . Moving between these points the consumer is willing to give up units of Y for another X or __ units of X for another Y.

The following questions refer to the following graph of a consumer's indifference curve. -At point C the consumer's marginal rate of substitution at point is approximately . This means that the consumer is willing to substitute at a rate of units of Y for one more X or __ X for one Y.

Use the following graph showing two budget lines, LR and LZ to answer the following questions. The consumer's income is $720. -For budget line LR the price of Y is $ and the price of X is $. The equation for budget line LR is ____________________.

Use the following graph showing two budget lines, LR and LZ to answer the following questions. The consumer's income is $720. -For budget line LM the price of Y is $ and the price of X is $. The equation for budget line LM is _________________.

Quiz 5: Theory of Consumer Behavior

Demand curves slope downward because

refer to the following graph: -The consumer's demand curve for X is

An individual's demand curve for X

refer to the following graphs: The price of Y is $15 per unit. -What is

refer to the following graphs: The price of Y is $15 per unit. -What is

If the total utility of five units of X is 45 units of utility and the marginal utility of the fifth unit is 3, then

Fill-in-the-Blank -Along an indifference curve ____________ is constant.

Fill-in-the-Blank -The rate at which a consumer is willing to substitute one good for another, holding utility constant, is given by the ____________ of an indifference curve. This rate is called the _________________________________.

Fill-in-the-Blank -If at a given combination of X and Y, a consumer's marginal rate of substitution is 4, this means that the consumer is willing to give up ______ units of Y for another X or ______ units of X for another Y.

Fill-in-the-Blank -If a consumer is choosing the levels of goods X and Y in order to maximize utility with a given budget the _________ equals the ____________ ratio of the goods.

Fill-in-the-Blank -The rate at which a consumer can substitute one good for another in the market is given by the ______ of the budget line and is equal to the __________ratio of the two goods.

Use the following graph showing two budget lines, LR and LZ to answer the following questions. The consumer's income is $720. -For budget line LR the price of Y is $______ and the price of X is $______. The equation for budget line LR is ________________________.

Use the following graph showing two budget lines, LR and LZ to answer the following questions. The consumer's income is $720. -For budget line LM the price of Y is $______ and the price of X is $______. The equation for budget line LM is _____________________.

Fill-in-the-Blank -The rate at which a consumer is willing to substitute one good for another, holding utility constant, is given by the of an indifference curve. This rate is called the _____________________.

Fill-in-the-Blank -If at a given combination of X and Y, a consumer's marginal rate of substitution is 4, this means that the consumer is willing to give up units of Y for another X or units of X for another Y.

Fill-in-the-Blank -If a consumer is choosing the levels of goods X and Y in order to maximize utility with a given budget the _ equals the ____ ratio of the goods.

Fill-in-the-Blank -The rate at which a consumer can substitute one good for another in the market is given by the of the budget line and is equal to the ____ratio of the two goods.

Use the following graph showing two budget lines, LR and LZ to answer the following questions. The consumer's income is $720. -For budget line LR the price of Y is $ and the price of X is $. The equation for budget line LR is ____________________.

Use the following graph showing two budget lines, LR and LZ to answer the following questions. The consumer's income is $720. -For budget line LM the price of Y is $ and the price of X is $. The equation for budget line LM is _________________.