MCQ Academy - English
Free Online MCQ Practice Tests in English
Popular Quiz Papers
Latest Quizzes
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume that X is a normal good, Y is an inferior good and that the price of good Y decreases. Then, which of the following effect is known with certainty.
Correct answer(s):
- The income and substitution effect reinforce one another leading to an overall decrease the consumption of good X
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume that X is a normal good, Y is an inferior good and that the price of good Y increases. Then, which of the following effect is known with certainty.
Correct answer(s):
- The income and substitution effect will have competing effects leading to an indeterminate impact on the consumption of good Y
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume that both X and Y are normal goods and that the price of good Y increases. Then, which of the following effect is known with certainty.
Correct answer(s):
- There will be an indeterminate effect on the consumption of good X
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume that both X and Y are normal goods and that the price of good Y decreases. Then, which of the following effect is known with certainty.
Correct answer(s):
- The income and substitution effect will reinforce one another leading to an overall increase in the consumption of good Y
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume that both X and Y are normal goods and that the price of good X increases. Then, which of the following effect is known with certainty.
Correct answer(s):
- The income and substitution effect reinforce one another leading to an overall decrease the consumption of good X
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume that both X and Y are inferior goods and the price of good Y increases. Then the substitution effect will lead consumers to consume
Correct answer(s):
- More of good X and less of good Y
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume that X is a normal good, Y is an inferior good and the price of good X increases. Then the substitution effect will lead consumers to consume
Correct answer(s):
- Less of good X and more of good Y
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume goods X and Y are normal goods and the price of good X decreases. Then the substitution effect will lead consumers to consume
Correct answer(s):
- More of good X and less of good Y
When the price of one good decreases, the associated substitution effect is represented by a
Correct answer(s):
- Move along a given indifference curve holding real income constant
When the price of one good increases, the associated income effect is represented by a move from one indifference curve to a
Correct answer(s):
- Lower indifference curve since real income is now lower
Consider a two good world, with commodities X and Y. If X is an inferior good, then an increase in consumer income cannot
Correct answer(s):
- Decrease the demand for Y
Sam Voter prefers Jack to Rob, Rob to Mark, and Jack to Mark. Sam’s preferences
Correct answer(s):
- Are transitive
Given that income is $300, the price of good Y is $15, and the price of good X is $20. What is the vertical intercept of the budget line?
Correct answer(s):
- 20
The maximum quantity of good Y that is affordable is:
Correct answer(s):
- M/PY
Suppose earnings are given by E = $50 + $20(24 – L), where E is earnings and L is the hours of leisure. What is the price to the worker of consuming an additional hour of leisure?
Correct answer(s):
- $20
The total earnings of a worker are represented by E = 150 + $12(24 – L), where E is earnings and L is the number of hours of leisure. How much will the worker earn if he takes 16 hours of leisure per day?
Correct answer(s):
- $246
A price decrease causes a consumer’s “real” income to:
Correct answer(s):
- Increase
The substitution affect isolates the change in the consumption of a good caused by:
Correct answer(s):
- The change in the relative prices of two goods
If the price of good X decreases, what will happen to the budget line?
Correct answer(s):
- It will become flatter
Given that income is $750 and PX = $32 and PY = $8, what is the market rate of substitution between goods X and Y?
Correct answer(s):
- -4