1 The indifference curves that a rational person would have for Euros and their equivalent in Cents would be:

AL-shaped

BA straight line with positive slope

CA straight line with negative slope

DConcave

2Say a consumer is choosing between wine and cheese. The price of wine is 10 and the price of cheese is 5. If the consumer is consuming a mixture of wine and cheese such that the marginal rate of substitution of cheese for wine is 4 and if the consumer is assumed to have well behaved preferences (represented by negatively sloped convex indifference curves), then the consumer is purchasing:

AToo much cheese

BToo much wine

CJust the right amount of both goods

DPurchasing more than what her income would allow

3Say a consumer considered soy milk and skim milk perfect substitutes for each other at a ratio of 1:1.If the skim milk is cheaper than soy milk this consumer would buy:

Asome of both goods, but more skim milk

Bjust skim milk

Csome of both goods but more soy milk

Dwe can't really say with the information given

4If all consumers are perfectly rational according to microeconomic models, then in equilibrium they should:

AAll have the same marginal rate of substitution

BAlways buy more of the least expensive good

CAll end up with the same bundle of goods

DAll have the same level of satisfaction