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If the consumer budget constraint is given by 10F + 5S = 100 where F is food and S i

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 modelled graphically

8.I prefer 10 apples and 6 oranges to 9 apples and 3 oranges. This is an example of:  

A. transitivity

B. completeness

C. more is better

D. convexivity

9.If the slope of the budget constraint increases for larger value of X:  

A. price of X reduction for large quantities purchased

B. price of x increase for large quantities

C. a constant price of X for all quantities purchased

D. price of X and a nominal income increase for the consumer

10.If budget line A is parallel to budget line B then which of the following cannot be true:  

A. the consumer has the same nominal income

B. good X has become relatively more expensive compared to good Y

C. the price of good X has increased

D. the price of good X has decreased

Dec 14 2019 View more View Less

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