Agriculture Economics Quiz 9

If the price of gasoline increases significantly for several months:

consumers will purchase fewer large sports utility vehicles

When the price of gasoline increases, consumers will:

drive less; use public transportation more carpool more all of the other answers

Which term refers to "rate of change"?

marginal additional incremental all of the other three answers

A person who has eaten so much that she is physically sick has:

negative MU

If you are eating pizza at a wedding reception where the pizza is free, you should:

stop eating pizza when your total utility of eating pizza is at a maximum

For the average consumer beef and chicken are probably:

substitutes in consumption

To an economist, rational behavior means:

that consumers and producers are purposeful and consistent; that people do the best that they can given the constraints that they face; B and C only

Convexity of the indifference curve is due to

the Law of Diminishing Marginal Utility

An increase in the price of pork will affect:

the amount of chicken purchased; the amount of pork purchased relative prices of pork and chicken all of the other three answers

The limit to consumption is caused by:

the budget constraint

A consumer equilibrium is found where:

the budget line and indifference curve are tangent

A consumer maximizes utility by looking at the tangency of:

the budget line and the indifference curve

An individual demand curve for pizza can be derived with the following:

the price of pizza, the price of one other good, and income

If the budget constraint is given by M = P1Y1 + P2Y2 then:

the y-intercept is given by M/P2

If an indifference curve intersects a budget line at two points, we can surmise that:

there is a lower budget line where the indifference curve will intersect at only one point

If the budget constraint is given by M = P1Y1 + P2Y2 then:

there is neither borrowing nor saving

The Law of Diminishing Marginal Utility explains:

why we consume a variety of food

The mathematical representation of a consumer's equilibrium is:

MRS = - P1/P2

The slope of the indifference curve is equal to:

MRS; the marginal valuation of the two goods the rate of exchange of one good for another that leaves utility unchanged all of the other three answers

When a consumer is indifferent between consuming an additional unit of a good:

MU is equal to zero

Hamburgers and hamburger buns are an example of:

complements

Marginal utility refers to:

a change in utility when consumption is increased by one unit

An equilibrium is:

a point where there is no tendency to change

If consumers were not subject to the budget constraint, they would consume:

an infinite amount

Two indifference curves for a given consumer:

can never intersect

When an economist says that an apple gives a quantifiable level of utility, this is:

cardinal utility

The MRS:

changes value due to the Law of Diminishing Marginal Utility

Utils are:

imaginary numbers that measure satisfaction

An indifference curve that is convex to the origin and negatively sloped shows:

imperfect substitutability

For the average consumer apples and oranges are examples of:

imperfect substitutes

Increases in per-capita income, ceteris paribus, will lead to:

increase in beef consumption

An increase in the per-capita income in China would result in:

increased beef exports to China

The tangency of an indifference curve and a budget line:

is found where the slope of the indifference curve (MRS) is equal to the price ratio

If utility is increasing, then marginal utility is:

positive

A rational individual would never:

prefer oranges over apples, apples over bananas, and bananas over oranges

At all points along an indifference curve, an individual is:

realizing the same level of utility

All of the following are assumptions about consumer behavior except:

relativity

The traditional convex indifference curve that is associated with an average consumer gets its shape from:

the diminishing utility in the consumption process

Consumer choices depend on:

the interaction of preferences and relative prices

To determine the combination of pizza and tacos that will maximize a student's utility, an economist must know:

the marginal rate of substitution between pizza and tacos and the price ratio