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# .Ann’s indifference curve over two goods slopesupward. This means that Ann’s preference over the goods is not a.complete b.transitive c.convex d.monotonic e.None of the above. 2.Bob has a complete

.Ann’s indifference curve over two goods slopesupward. This means that Ann’s preference over the goods is not

a.complete b.transitive c.convex d.monotonic e.None of the above.

2.Bob has a complete preference over good 1 and good 2. The two bundles (𝑥!,𝑥")=(3,5)and (𝑦!,𝑦")=(4,8)are on the same indifference curve. This means that

a.Bob strictly prefers (𝑦!,𝑦")to (𝑥!,𝑥"). b.Bob’s preference is not transitive. c.Bob’s preference is not monotonic.

3.Ann strictly prefers the bundle (𝑥!,𝑥")over another bundle (𝑦!,𝑦")if (𝑥!+𝑥")−(𝑦!+𝑦")>5. If (𝑥!+𝑥")−(𝑦!+𝑦")≤5, then Ann is indifferent between the two bundles. Which of the following statement is true?

a.Ann’s preference is complete and transitive.b.Ann’s preference is complete but not transitive.c.Ann’s preference is transitive but not complete.d.Ann’s preference isneither complete nor transitive.

4.Both Bob and Charles have complete and transitive preferences. Diana’s preference is as follows: to compare two bundles 𝑋and 𝑌, Diana first asks her two best friends, Bob and Charles. If both Bob and Charles strictly prefer 𝑋to 𝑌, then Diana will also strictly prefer 𝑋to 𝑌; if both Bob and Charles strictly prefer 𝑌to 𝑋, then Diana will also strictly prefer 𝑌to 𝑋; if both Bob and Charles are indifferent between 𝑋and 𝑌, and Diana will also be indifferent between 𝑋and 𝑌. Which of the following statement is true?

a.Diana’s preference is complete and transitive.b.Diana’s preference is complete but not transitive.c.Diana’s preference is transitive but not complete.d.Diana’s preference is neither complete nor transitive.

5.Suppose that Esther’s preference is complete, transitive, monotonic and convex. Esther is indifferent between the bundles (4,6) and (2,14). What is Esther’s preference over the two bundles (3,10) and (1,13)

a.Esther strictly prefers (3,10) over (1,13).b.Esther strictly prefers (1,13) over (3,10).c.Esther is indifferent between (3,10) and (1,13).d.There is not enough information to make a conclusion.

6.Let the good on the horizontal axis be good 1 and the good on the vertical axis be good 2.The absolute value of the slope of the indifference curveis:(i) the consumer’s marginal rate of substitution 𝑀𝑅𝑆!,".(ii) the amount of good 2 that the consumer is willing to give up in exchange for the next infinitesimalunit of good 1.(iii) the amount of good 2 that the consumer is willing to accept in exchange for giving up the next infinitesimalunit of good 1.Which of the statements above is/are true?

a. Only (i)b. Only (ii)c. Only (iii)d. All of the above.

7.If Bob’s preference over good 1 and good 2 is convex, then

a.Bob must always prefer more of both goods to less. b.When the number of good 1 that Bob currently has becomes bigger, the number of good 2 that Bob is willing to give up in exchange for an extra unit of good 1 increases. c.When the number of good 1 that Bob currently has becomes bigger, the number of good 2 that Bob is willing to give up in exchange for an extra unit of good 1 decreases. d.None of the above.

May 12 2021 View more View Less