1 )Suppose the price of rice increases and you view rice as an inferior good. The substitution effect results in a ________ change in rice consumption, and the income effect leads to a ________ change in rice consumption.

A) positive, positive

B) positive, negative

C) negative, positive

D) negative, negative

2. Use the following statements to answer this question:

I.The income-consumption curve for perfect complements is an upward sloping straight line.

II.The price-consumption curve for perfect complements is an upward sloping straight line.

A) I and II are true.

B) I is true and II is false.

C) II is true and I is false.

D) I and II are false.

3.The magnitude of the slope of an indifference curve is:

A) called the marginal rate of substitution.

B) equal to the ratio of the total utility of the goods.

C) always equal to the ratio of the prices of the goods.

D) all of the above

E) A and C only