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
