1) If Ralph rides the bus to work which is considered an inferior good/service. After Ralph applies for and accepts a new management job at twice his old salary he starts to make changes. Based on what you have learned about changes in income and consumer choices, what will most likely happen to Ralph's use of public transportation?

Group of answer choices

Ralph would discontinue riding the bus and switch to riding his bike.

Ralph would discontinue riding the bus and purchase a car.

It will decrease since Ralph will ask his boss if he can telework to avoid the long commute.

Ralph would continue riding the bus.

2) What is involved in the step-by-step process of finding the choice with the maximum utility?

Group of answer choices

It involves a comparison of the budget constraint and net gains in satisfaction.

It involves a comparison of several budget constraints.

It involves a comparison of the marginal utility gained and lost from different choices along the budget constraint.

It involves a comparison of the relative prices of various goods

3) What will happen if a good that is normal has a decrease in price which causes a substitution effect?

Group of answer choices

It will cause a substitution effect that is negative and an income effect that is positive.

It will cause a substitution effect that is positive and an income effect that is negative.

It will cause a substitution effect that is positive and an income effect that is positive.

The consumer will continue to purchase more of the lower priced good until his/her budget is exhausted

4) Why do most demand curves have a negative slope?

Group of answer choices

Because as prices increase firms will supply more goods to the market.

Because consumers try to substitute away from the consumption for a commodity when the commodity's price rises because of the substitution effect.

Because consumers substitute higher quality goods for lower quality goods because of the substitution effect.

Because the income effect causes consumers to reduce consumption of a commodity when income falls because an increase in price reduces real income.