(1.) Tina must make a decision about the number of bottles of sports drink and how many cases of water she wants to purchase for her soccer practices. Tina decided to buy four cases of water and 16 bottles of sports drink.

As she waited in line to check out, Tina noticed there was a special display offering five cases of water for the price of four. Tina opted to pick up an additional case of water, even though she might not use it until next week.

Tina exhibited the economic principle of __________, because she decided that five cases of water and 16 bottles of sports drink was better than four cases of water and 16 bottles of sports drink.

• a.)
• utility theory
• b.)
• non-satiation
• c.)
• completeness
• d.)
• transitivity

(2.) Paula liked to consume both water and sports drinksduring her basketball games, but she always began with water. Knowing her own preferences helped in her decision of how much water versus how much sports drink to purchase.

Which of the following choices would be characteristic of the law of diminishing returns for Paula?

• a.)
• As Paula drinks more and more bottles of water, she would continue to want more water and would not desire the sports drink.
• b.)
• If Paula only drinks water at practice, she would no longer crave sports drinks.
• c.)
• If Paula denies the water and just drinks the sports drink, she would no longer want to drink water at practice anymore.
• d.)
• As Paula drinks more and more bottles of water, she would be more likely to want to trade off a bottle of water for a bottle of sports drink.

(3.) This preference map shows the indifference curves and various points, based on the possible combinations of refillable water bottles and crackers.

Which statement is true,based on the preference map above?

• a.)
• Option A is the most affordable option.
• b.)
• Option C is preferable to both options B and D.
• c.)
• Options C and D are equally desirable.
• d.)
• Point B is the optimal choice.

(4.) Which of the following will occur when consumer incomes decrease?

• a.)
• The optimal utility levels will increase.
• b.)
• The purchase of normal goods will increase.
• c.)
• The budget constraint will shift outward.
• d.)
• The purchase of inferior goods will increase.