微观经济学-Chapter10.docVIP

微观经济学 Chapter10 1、You are graphing the budget line for an individual who consumes coffee and bread. How is the budget line affected when the consumers income increases? A. Both the horizontal and vertical intercepts decrease. B. Both the horizontal and vertical intercepts increase. C. Only the vertical intercept increases. D. Only the horizontal intercept increases. -------------------------------------------------------------------------------- 2、When the price of air travel rises, both the income and substitution effects play a role in the response. The income effect describes what happens due to A. the lower utility now received from air travel. B. the fact that many consumers will switch to traveling by car or by train. C. the lower utility now received from travel of any type. D. the fact that consumers find their incomes now to have a lower purchasing power. -------------------------------------------------------------------------------- 3、The downward slope of the budget line reflects the fact that A. as you buy more of one good, its price decreases. B. all goods are characterized by diminishing marginal utility. C. as you buy more of one good, you can afford less of the other. D. as you buy more of one good, you become worse off. -------------------------------------------------------------------------------- 4、Economic theory asserts that A. one cannot maximize utility without doing the math of calculating the ratios of marginal utility divided by price. B. one cannot maximize utility without taking an economics class that explains utility theory. C. consumers who watch market trends are better at maximizing their utility than others are. D. consumers naturally know which consumption choices will maximize their utility. -------------------------------------------------------------------------------- 5、An increase in the price of CDs A. reduces the marginal utility derived from each CD purchased. B. will not have a substitution effect. C. reduces the ma