Topic: The Theory of Individual Behavior Quiz ( MCQ and Answer )

What is the maximum amount of good Y that can be purchased if X and Y are the only two goods available for purchase and PX = $10, PY = $15, X = 30, and M = 600?

The rate at which a consumer is willing to substitute one good for another, while still maintaining a given level of satisfaction is called the

Which combination of the properties given below rules out indifference curves that intersect one another?

Joe consumes 10 units of food and 12 units of clothing. Since food is an inferior good, a gift to Joe of a $12 gift certificate at a clothing store will

Consider a two good world, with commodities X and Y. If Y is an inferior good, then an increase in consumer income cannot

If the price of a good purchased by a utility maximizing consumer goes down, all other things remain the same, and the consumer’s income is adjusted so that he can just barely attain his previous level of satisfaction, and if the consumer had indifference curves of the usual shape it will be found that

If widgets and gidgets are complements and both are normal goods, then an increase in the demand for widgets will result from

If sugar and Nutrasweet are substitutes, then we can be certain that a decrease in the price of sugar will lead to an increase in the consumption of ____?

If widgets and gidgets are complements and both are normal goods, then a decrease in the demand for widgets will result from

Consider a two good world, with commodities X and Y. Which of the following statements is correct?

Mitchell’s money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and income, Mitchell buys 50 units of X and 25 units of Y. Call this combination of X and Y bundle J. At bundle J Mitchell’s MRS is 2. At bundle J, if Mitchell increases consumption of Y by 1 unit how many units of X must he give up in order to satisfy his budget constraint?

Mitchell’s money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and income, Mitchell buys 50 units of X and 25 units of Y. Call this combination of X and Y bundle J. At bundle J Mitchell’s MRS is 2. Given these prices and income, what is Mitchell’s equilibrium consumption of X?

Mitchell’s money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and income, Mitchell buys 50 units of X and 25 units of Y. Call this combination of X and Y bundle J. At bundle J Mitchell’s MRS is 2. At bundle J, if Mitchell increases consumption of Y by 1 unit how many units of X can he give up and still reach the same level of utility?