Test Bank For Microeconomics and Behavior Robert H Frank 9th Edition

Test Bank For Microeconomics and Behavior Robert H Frank 9th Edition

Chapter 03

Rational Consumer Choice

Multiple Choice Questions
1.

If the consumer’s budget constraint is given by 10F + 5S = 100 where F is food and S is shelter, how much food can he buy if he purchases 2 units of shelter?
A. 10

B. 5

C. 20

D. 9

2.

If the consumer’s budget constraint is given by 10F + 5S = 100 where F is food and S is shelter, what is the opportunity cost of food in terms of shelter?
A. 5

B. 2

C. 15

D. 10

3.

If the consumer’s budget constraint is given by 4P + 2B = 50 where P is pizza and B is burgers, the following bundles of pizza and burger would be on the budget constraint:
A. P = 2; B = 21

B. P = 5; B = 10

C. P = 2; B = 24

D. P = 10; B = 20

4.

An increase in the price of one good will cause
A. an inward rotation of the budget curve.

B. an outward rotation of the budget curve.

C. a parallel shift in the budget curve.

D. an inside shift of the budget curve.

5.

An increase in income with no changes in the price of either good will cause
A. an inward shift of the budget curve.

B. an outward shift of the budget curve.

C. no change in the budget curve.

D. an inward rotation of the budget curve.

6.

Suppose you are choosing between milk and cookies. If the opportunity cost of cookies in terms of milk increases, then the budget curve will
A. shift inward.

B. rotate inward.

C. shift outward.

D. rotate outward.

7.

The “composite good” refers to
A. large purchases that cannot be incrementally divided.

B. an abstraction requiring more than a three dimensional graph.

C. income not spent on good X in a two-dimensional graphical presentation.

D. the notion that consumer pleasure cannot be modeled graphically.

8.

If the price of a good shown on the vertical axis of a budget graph is cut in half and the price of the good on the horizontal axis is cut by 75%, then the budget constraint shifts
A. left and becomes steeper.

B. right and becomes steeper.

C. left and becomes flatter.

D. right and becomes flatter.

9.

Which of the following are most likely to have indifference curves that are L-shaped?
A. Ice cream and frozen yogurt

B. Your textbook and its study guide

C. Coke and Pepsi

D. A white shirt and a blue shirt

10.

Your college has three meal plans. One is for 21 meals a week, another for 14 and a third offers only 7. You don’t know the price yet but you are certain the 21 would be best. However, your second choice would be to take only the 7 meal plan and if you had to pick a third choice it would be the 14 meal plan. This preference pattern doesn’t fit the indifference curve assumption of
A. completeness.

B. transitivity.

C. convexity.

D. none of these because it does not violate any of the assumptions.