Test Bank
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TEST BANK INTRODUCTION
The following Test Bank contains more than 300 multiple-choice questions on Chapters 3–21 of Microeconomic Theory: Basic Principles Principles and Extensions, Extensions, Ninth !ition" Consistent with the limitations of this format, these questions are generall# easier an! somewhat less mathematical than are the pro$lems in the te%t" &till, the multiple-choice questions are pro$a$l# a $it more anal#tical than is usual for assessments of this t#pe" But the questions clearl# are not inten!e! to su$stitute for the pro$lems $ut rather to ser'e as a !e'ice for instructors to offer offer stu!ents some con'enient re'iew or qui( materials"
Chapter 3 Preferences and Utiit! 1"
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3"
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)n!ifference cur'es a" are nonintersecting" $" are contour lines of a utilit# function" c" are negati'el# slope!" !" all of the a$o'e" +or an in!i'i!ual who consumes onl# two goo!s, x an! y, the opportunit# cost of consuming one more unit of X in terms of how much Y must $e gi'en up is reflecte! $# a" the in!i'i!uals marginal rate of su$stitution" $" the market prices of x an! y" c" the slope of the in!i'i!uals in!ifference cur'e" !" none of the a$o'e" )f $un!les of goo!s A an! B lie on the same in!ifference cur'e, one can assume the in!i'i!ual a" prefers $un!le A to $un!le B" $" prefers $un!le B to $un!le A" c" eno#s $un!le A an! B equall#" !" $un!le A contains the same goo!s as $un!le B"
.uestions / an! refer to an in!i'i!ual whose utilit# function is gi'en $# U x, y = / x + 2 y /" *
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*
4"
ith this utilit# function, the $un!le 3, 2 pro'i!es the same utilit# as the $un!le a" 2, 3" $" 2, /" c" 2, " !" 3, 3" +or this utilit# function, the MR a" !epen!s on the 'alues of x an! y" $" is alwa#s 0" c" is alwa#s 2" !" is alwa#s /" hich of the following utilit# functions represent the same preferences as U 1 x, y 2 = x ×y 5
*
a"
U x, y = 10 xy "
$" c"
U x, y = x ⋅ y! U x, y = ln x 6 ln y" !" 7ll of the a$o'e represent the same preferences"
120
Chapter 3"Preferences and Utiit!
8" *
:"
* ;"
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)f utilit# is gi'en $# U x, y =
1#1
xy , then the persons MR at the point x 9 , y 9 2 is
gi'en $# a" 0"/" $" 1"0" c" 2"" !" "0" )f utilit# is gi'en $# U x, y = x 2 + 2 xy + y 2 , this persons in!ifference cur'es are a" para$olas" $" h#per$olas" c" concentric circles" !" straight lines" hich of the following utilit# functions $est represents the i!ea that two goo!s, x an! y, are perfect complements5 a"
U x, y =
xy
$" c" !"
U x, y = x + y! U x, y = " x − y " " U x, y = min x, y!
10" *
)f an in!i'i!uals utilit# function is quasiconca'e, his or her MR will a" !iminish as x is su$stitute! for y" $" increase as x is su$stitute! for y" c" $e un!efine! e%cept in special cases" !" alwa#s !epen! onl# on the ratio of x to y"
11"
)f utilit# is gi'en $# U x, y 9
*
12"
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hich of the following utilit# functions #o$ld not $e consistent with the notion that x an! y are $oth =goo!s> with positi'e marginal utilities5 U x, y = x % y " a" $" U x, y = x + y ! c"
U x, y = x y "
!"
U x, y = x&y !
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