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Economics Mcqs

If an increase in a consumer’s income causes the consumers to decrease her quantity demanded of a good, then the good is ?

Consumer Theory vs. Real Consumers, Economics Mcqs /
If an increase in a consumer’s income causes the consumers to decrease her quantity demanded of a good, then the good is ?

A. a substitute good
B. a normal good
C. a complementary good
D. an inferior good

If an increase in a consumer’s income causes the consumers to decrease her quantity demanded of a good, then the good is ? Read More »

Consumer Theory vs. Real Consumers, Economics Mcqs

Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis If indifference curves are bowed inward, as we move from having an abundance of good X to having an abundance of good Y, the marginal rate of substitution of good Y for good X (the slope of the indifference curve) ?

Consumer Theory vs. Real Consumers, Economics Mcqs /
Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis If indifference curves are bowed inward, as we move from having an abundance of good X to having an abundance of good Y, the marginal rate of substitution of good Y for good X (the slope of the indifference curve) ?

A. rises
B. stays the same
C. could rise or fall depending on the relative prices of the two goods.
D. falls

Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis If indifference curves are bowed inward, as we move from having an abundance of good X to having an abundance of good Y, the marginal rate of substitution of good Y for good X (the slope of the indifference curve) ? Read More »

Consumer Theory vs. Real Consumers, Economics Mcqs

The consumer’s optimal purchase of any two goods is the point where ?

Consumer Theory vs. Real Consumers, Economics Mcqs /
The consumer’s optimal purchase of any two goods is the point where ?

A. the budget constraint crosses the indifference curve
B. the two highest indifference curves cross
C. the consumer reaches the highest indifference curve subject to remaining on the budget constraint
D. the consumer has reached the highest indifference curve

The consumer’s optimal purchase of any two goods is the point where ? Read More »

Consumer Theory vs. Real Consumers, Economics Mcqs

Which of the following is not true regarding the outcome of a consumer’s optimization process ?

Consumer Theory vs. Real Consumers, Economics Mcqs /
Which of the following is not true regarding the outcome of a consumer’s optimization process ?

A. The marginal utility per dollar spent on each good is the same
B. The marginal rate of substitution between goods is equal to the ratio of the prices between goods
C. The consumer’s indifference curve is tangent to his budget constraint
D. The consumer has reached his highest indifference curve subject to his budget constraint
E. The consumer is indifferent between any two points on his budget constraint

Which of the following is not true regarding the outcome of a consumer’s optimization process ? Read More »

Consumer Theory vs. Real Consumers, Economics Mcqs

A change in the relative prices of which of the following pair of goods would likely cause the smallest substitution effect ?

Consumer Theory vs. Real Consumers, Economics Mcqs /
A change in the relative prices of which of the following pair of goods would likely cause the smallest substitution effect ?

A. right shoes and left shoes
B. petrol from BP and petrol from shell
C. kit-Kat chocolate snacks and Twix chocolate snacks
D. coke and Pepsi

A change in the relative prices of which of the following pair of goods would likely cause the smallest substitution effect ? Read More »

Consumer Theory vs. Real Consumers, Economics Mcqs

If leisure is a normal good, an increase in the wage ?

Consumer Theory vs. Real Consumers, Economics Mcqs /
If leisure is a normal good, an increase in the wage ?

A. will always increase the quantity of labor supplied
B. will increase the amount of labor supplied if the substitution effect outweighs the income effect
C. will increase the amount of labor supplied if the income effect outweighs the substitution effect
D. will always decrease the amount of labor supplied

If leisure is a normal good, an increase in the wage ? Read More »

Consumer Theory vs. Real Consumers, Economics Mcqs

The change in consumption that results when a price change moves the consumer along a given indifference curve is known as the ?

Consumer Theory vs. Real Consumers, Economics Mcqs /
The change in consumption that results when a price change moves the consumer along a given indifference curve is known as the ?

A. inferior effect
B. normal effect
C. substitution effect
D. complementary effect
E. income effect

The change in consumption that results when a price change moves the consumer along a given indifference curve is known as the ? Read More »

Consumer Theory vs. Real Consumers, Economics Mcqs

Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The income effect is represented by the movement from point ?

Consumer Theory vs. Real Consumers, Economics Mcqs /
Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The income effect is represented by the movement from point ?

A. X to point Y
B. X to point Z
C. Y to point X
D. Z to point X

Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The income effect is represented by the movement from point ? Read More »

Consumer Theory vs. Real Consumers, Economics Mcqs

Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 If the price of a belt is €10 and the price of a pair of socks is €5, the consumer will choose to buy the commodity bundle represented b point ?

Consumer Theory vs. Real Consumers, Economics Mcqs /
Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 If the price of a belt is €10 and the price of a pair of socks is €5, the consumer will choose to buy the commodity bundle represented b point ?

A. Z
B. X
C. Y
D. the optimal point cannot be determined from this graph

Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 If the price of a belt is €10 and the price of a pair of socks is €5, the consumer will choose to buy the commodity bundle represented b point ? Read More »

Consumer Theory vs. Real Consumers, Economics Mcqs