Question 1

1pts

Hold the prices of goods, as well as Amy's preferences, constant. If Amy's income increases, then

Group of answer choices

both her indifference curves and budget line change.

her indifference curves change, but her budget line does not change.

her budget line changes, but her indifference curves do not change.

neither her indifference curves nor her budget line change.

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Question 2

1pts

A consumer maximizes utility when she consumes at a point where

Group of answer choices

the marginal utility of each good is the same.

the marginal utility per dollar spent on each good is the same.

the price of each good is the same.

All of the above statements are true.

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Question 3

1pts

Abby, Bobbi, and Deborah each buy ice cream and paperback novels to enjoy on hot summer days. Ice cream costs $5 per gallon, and paperback novels cost $8 each. Abby has a budget of $80, Bobbi has a budget of $60, and Deborah has a budget of $40 to spend on ice cream and paperback novels. Which of the following statements is correct?

Group of answer choices

Each woman faces the same budget constraint.

The slope of the budget line is the same for each woman.

The area underneath the budget line is larger for Deborah than for Abby.

All of the above are correct.

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Question 4

1pts

Economists represent a consumer's preferences using

Group of answer choices

demand curves.

budget line.

indifference curves.

supply curves.

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Question 5

1pts

Indifference curves graphically represent

Group of answer choices

an income level sufficient to allow an individual to achieve a given level of satisfaction.

the constraints faced by individuals.

an individual's preferences.

the relative price of commodities.

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Question 6

1pts

An increase in a consumer's income

Group of answer choices

increases the slope of the consumer's budget line.

has no effect on the slope of the consumer's budget line.

decreases the slope of the consumer's budget line.

has no effect on the consumer's budget line.

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Question 7

1pts

A consumer who doesn't spend all of her income

Group of answer choices

would be at a point outside of her budget line.

would be at a point inside her budget line.

must not be consuming positive quantities of all goods.

must be consuming at a point where her budget line touches one of the axes.

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Question 8

1pts

Scenario 2

Suppose the price of hot wings is $10, the price of beer is $1, and the consumer's income is $50. In addition, suppose the consumer's budget constraint illustrates hot wings on the horizontal axis and beer on the vertical axis.

Refer to Scenario 2.If the price of beer doubles to $2, then the

Group of answer choices

budget line intersects the vertical axis at 25 beers.

slope of the budget constraint rises to -2.

slope of the budget constraint falls to -4.

budget constraint shifts inward in a parallel fashion.

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Question 9

1pts

A budget line shows

Group of answer choices

the maximum utility that a consumer can achieve for a given level of income.

a series of bundles that cost the consumer the same amount of money.

a series of bundles that give the consumer the same level of utility.

All of the above are correct.

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Question 10

1pts

As long as a consumer remains on the same indifference curve,

Group of answer choices

she is indifferent to all points that lie on any other indifference curve.

she is unable to decide which bundle of goods to choose.

she is indifferent among the points on that curve.