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.   Problems 3, 7, and
8

Show transcribed image text A Multiple Choice. Answer all 15 uestions. Circle one answer (2 points each) q m. Based on the supply & model, in which of the following cases is the chan ambiguous? a. Demand goes up, supply goes down. b. Demand goes down, supply goes up. Demand goes up, supply stays the same. d. Demand goes up, supply goes up. e, None of the above. 2. What do we mean when we say that a consumer's preferences are complete? a. The consumer is never confused (every bundle is on some indifference curve) b. The consumer prefers a mix. c. The consumer prefers more to less. If the consumer prefers x to Y and Y to Z, then she prefers X to Z. 3. With good 1 on the horizontal axis and good 2 on the vertical axis, what is the slope of a a consumer's budget line? (Note: M- Income, Price of good 1, Pr Price of good 2, MRs Marginal rate of substitution of good i for good 2) M Rs1.2 4. Which of the following is TRUE about MRS12? a. it is equal to the ratio of marginal utilities, b. it measures a consumer's willingness to give up good 2 in order to obtain more good 1. c it is equal to the absolute value of the slope of an indifference curve. All of the above. e. Answers b and c are TRUE, but a is FALSE. Which of the following demands is likely to be characterized by both a low substitution effect and a high income effect? a. The demand for salt. b. The demand for fancy restaurant meals. ca The demand for soft drinks. emand for apartments. A student's d

A Multiple Choice. Answer all 15 uestions. Circle one answer (2 points each) q m. Based on the supply & model, in which of the following cases is the chan ambiguous? a. Demand goes up, supply goes down. b. Demand goes down, supply goes up. Demand goes up, supply stays the same. d. Demand goes up, supply goes up. e, None of the above. 2. What do we mean when we say that a consumer's preferences are complete? a. The consumer is never confused (every bundle is on some indifference curve) b. The consumer prefers a mix. c. The consumer prefers more to less. If the consumer prefers x to Y and Y to Z, then she prefers X to Z. 3. With good 1 on the horizontal axis and good 2 on the vertical axis, what is the slope of a a consumer's budget line? (Note: M- Income, Price of good 1, Pr Price of good 2, MRs Marginal rate of substitution of good i for good 2) M Rs1.2 4. Which of the following is TRUE about MRS12? a. it is equal to the ratio of marginal utilities, b. it measures a consumer's willingness to give up good 2 in order to obtain more good 1. c it is equal to the absolute value of the slope of an indifference curve. All of the above. e. Answers b and c are TRUE, but a is FALSE. Which of the following demands is likely to be characterized by both a low substitution effect and a high income effect? a. The demand for salt. b. The demand for fancy restaurant meals. ca The demand for soft drinks. emand for apartments. A student's d