Question 1. 1. X and Y are substitute goods. X is on sale. Demand for Y will (Po

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Question 1.1. X and Y are substitute goods. X is on sale. Demand for Y will (Points : 2)       increase
      decrease
      stay the same
      none of the above

Question 2.2. Ellie received a big raise and is not buying Ramen noodle soup any more. One can conclude Ramen noodle soup is (Points : 2)       a normal good
      a superior good
      an inferior good
      a quality good

Question 3.3. Price of a name brand dress shoes drops by 50% and its sale increases by 75%. This is an example of (Points : 2)       change in demand
      change in quantity demanded
      equilibrium price
      competitive price

Question 4.4. Change in which of the following does not lead to change in demand? (Points : 2)       income
      price of related goods
      taste of consumers
      own price

Question 5.5. The relationship between price of one complementary good and the demand of the other complementary good is (Points : 2)       positive
      negative
      constant
      proportional

Question 6.6. Suppose that James buys coffee and apples, and he has a monthly budget of $100 to spend on the two goods. His budget constraint can be written as: p1*Qapples+p2*Qcoffee = $100. If the price of apple and coffee both double, then the slope of the budget constraint: (Points : 2)       Stays the same
      Becomes steeper
      Becomes flatter
      There is not enough information to determine

Question 7.7. The marginal rate of substitution is the same as (Points : 2)       diminishing marginal utility
      slope of the indifference curve
      slope of the budget line
      none of the above

Question 8.8. Along an indifference map, consumer's equilibrium is attained at(Points : 2)       the highest indifference curve
      the middle indifference curve
      the indifference curve tangent to the budget line
       the indifference curve touching the highest point of the budget line

Question 9.9. Given a consumer's budget line, the feasible region is (Points : 2)       the area to the right of the line
      the area to the left of the line or on the line
      both of the above
      none of the above

Question 10.10. Linus has the utility function U(x, y) = 2x + 3y. What is the MRS for this utility function? (Points : 2)       -2
      -2/3
      --3
      -5/6 Question 1.1. X and Y are substitute goods. X is on sale. Demand for Y will (Points : 2)       increase
      decrease
      stay the same
      none of the above

Question 2.2. Ellie received a big raise and is not buying Ramen noodle soup any more. One can conclude Ramen noodle soup is (Points : 2)       a normal good
      a superior good
      an inferior good
      a quality good

Question 3.3. Price of a name brand dress shoes drops by 50% and its sale increases by 75%. This is an example of (Points : 2)       change in demand
      change in quantity demanded
      equilibrium price
      competitive price

Question 4.4. Change in which of the following does not lead to change in demand? (Points : 2)       income
      price of related goods
      taste of consumers
      own price

Question 5.5. The relationship between price of one complementary good and the demand of the other complementary good is (Points : 2)       positive
      negative
      constant
      proportional

Question 6.6. Suppose that James buys coffee and apples, and he has a monthly budget of $100 to spend on the two goods. His budget constraint can be written as: p1*Qapples+p2*Qcoffee = $100. If the price of apple and coffee both double, then the slope of the budget constraint: (Points : 2)       Stays the same
      Becomes steeper
      Becomes flatter
      There is not enough information to determine

Question 7.7. The marginal rate of substitution is the same as (Points : 2)       diminishing marginal utility
      slope of the indifference curve
      slope of the budget line
      none of the above

Question 8.8. Along an indifference map, consumer's equilibrium is attained at(Points : 2)       the highest indifference curve
      the middle indifference curve
      the indifference curve tangent to the budget line
       the indifference curve touching the highest point of the budget line

Question 9.9. Given a consumer's budget line, the feasible region is (Points : 2)       the area to the right of the line
      the area to the left of the line or on the line
      both of the above
      none of the above

Question 10.10. Linus has the utility function U(x, y) = 2x + 3y. What is the MRS for this utility function? (Points : 2)       -2
      -2/3
      --3
      -5/6

Explanation / Answer

(1) decrease

(2)an inferior good

(3)change in demand

(4)
taste of consumers

(5)
negative

(6)
Stays the same

(7)

slope of the budget line

(8)the indifference curve touching the highest point of the budget line

(9)
the area to the left of the line or on the line

(10)
-2/3

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