Select the statement that is unlikelyto happen when Miguel scales down from 40 to 25 hours per week, thus lowering his income.

• Miguel will buy more inferior goods.
• Miguel will buy fewer normal goods.
• Miguel will purchase goods that provide him with the highest level of utility.
• Miguel's budget constraint will shift outward.

Cross-price elasticity refers to the change in demand that happens as a result of change in __________.

• change in the price of the good itself
• price of complement or substitute goods
• consumer taste or preferences
• income

Jacob recently graduated from college and was promoted from intern to a paid position.

Which of the following is most likely to change in his spending habits?

• Jacob will not respond as much to price changes in normal goods.
• Jacob's budget constraint will shift to the left if shown on a graph.
• Jacob will purchase fewer normal goods and more inferior goods.
• Jacob will purchase more normal goods.

A Chinese restaurant and a Thai restaurant both sold buffet meals at the single price of $15 per person.When the Thai restaurant reduced their price to $12 per person,the number of dinners sold at the Chinese restaurant decreased from 100 to 75.

What isthe cross-price elasticity for dinners at the two restaurants, using the midpoint formula?

• 1
• -1.5
• 1.28
• -0.28

Which of the following is true if two indifferences curves cross each other on a preference map?

• The curves are from the same rational individual.
• The curves would represent two different individuals.
• If the curves are from the same rational individual, then they do not violate the assumptions of consumer choice theory.
• The curves are an example of consistent preferences.

Select the statement below that is true.

• Completeness means that none of the items in a set should be missing.
• Non-satiation means that more is always better.
• Indifference means that only a particular combination of goods are preferable to the consumer.
• The consumer's preference is indicated by the Y axis.

Which of the following statements is true of perfectly elastic demand?

• Buying less of another item in order to purchase medications needed to sustain life
• Not buying a good at all anymore when the price goes up a little
• Buying the same amount of salt regardless of price fluctuations
• Continuing to buy gasoline when the price goes up in order to commute to work

Which of the following would most likely have an income elasticity of 3?

• Clothing from a second-hand store
• Dinner at a local pizzeria
• A high-end luxury car
• A cell phone

Which definition below defines perfectly elastic demand?

• Any change in price always results in a very significantchange in demand.
• This is a situation in which a change in price will never change a consumer's decision to buy a certain good.
• A change in price of one good affects a consumer's decision to purchase a different good.
• This is the degree to which demand changes inresponseto achange of price.

Which of the following causes the budget constraint to make a non-parallel shift inward?

• The consumer's satisfaction goes up.
• The budget goes up.
• The consumer's income goes up.
• The price of one item goes up.

Which of the following is an example of own-price elasticity?

• The change in quantity of canoes demanded when the price of kayaks changed
• The change in quantity of steaks purchased after the price of seafood increased at a local market
• The change in quantity demanded after the price of a 32" television decreased by $70
• The change in demand for inferior goods after a series of lay-offs in a small town

Which scenario below is an example of completeness?

• If a guest at a banquet can purchase a raffle ticket for gift baskets that are nearly identical, she will choose to purchase a ticket for the basket that has an additional gift.
• For $7, a shopper can buy a gallon of milk and one box of an expensive cereal or a gallon of milk and two boxes of a cheaper cereal. He decides to purchase a gallon of milk and one box of cheaper cereal, keeping the leftover cash.
• A consumer is able to compare possible combinations and quantities of bath towels and wash cloths she is purchasing for her bathroom to determine the best combination based on her preferences.
• A consumer is able to logically rank his preferences for the three different price combinations for a flight that he will purchase for an upcoming trip.

Last month, Robert's income was $1,000, and he went to the movies twice. This month, Robert's income increased to $2,000, and he went to the movies five times.

Determine the income elasticity using the midpoint formula.

• 0.5
• 2.5
• -2.1
• 1.28

Which of the following best describes an indifference curve?

• A graph that shows how the price of substitute goods causes a consumer to prefer one bundle of goods over another
• A graph that shows the change in demand for goods and services when income changes
• A graph that shows the change in demand for a good when the price of its complementary good changes
• A graph that shows different bundles of goods for which a consumer has equal preference

Which of the following is an example of the law of diminishing returns?

• If Shane and Marie order an additional bucket of popcorn, it will provide more satisfaction to them than the first bucket.
• As Shana continues to win more and more first place awards, each additional first place award means more to her than the previously earned ones.
• The rate of utility gained decreases each additional hour that Isabella stays up to study, because her studying provides less benefit to her as she starts to get tired.
• As Alice consumes more tea, each additional cup of tea provides her with more satisfaction than the previous one.

Select the cross-price elasticity amount below that is categorized as a substitute.

• 0
• -0.23
• 0.71
• -1.2

When Sam's Sandwiches were priced at $6, he sold 70 each day during lunch. When he reduced the price to $4 a sandwich, he sold 80 each day.

Using the midpoint formula, the own price elasticity for Sam's Sandwiches would be __________.

• 0.50
• 1.33
• -0.67
• -0.33

Which statement defines a budget constraint?

• This maximizes the consumer's utility.
• This represents thecombinations of two items that spend all of the consumer's money allotted for those items.
• When the price of one item goes up, the consumer purchases more of a second item.
• When the price on one item increases, the consumer purchases less of both items.