Practi的ce Midterm 1.docVIP

ECON 101 Introductory Microeconomic Analysis PRACTICE MIDTERM 1 Figure 21-5 1. Refer to Figure 21-5. Which of the indifference curves shown involve(s) diminishing marginal rate of substitution (MRS)? a. graph (a) b. graph (b) c. graph (c) d. All of the above 2. The following diagram shows one indifference curve representing the preferences for goods x and y for one consumer. What is the marginal rate of substitution between points A and B? a. ? b. 4/3 c. 2 d. 3 Figure 21-6 3. Refer to Figure 21-6. It would be possible for the consumer to reach I2 if a. the price of Y decreases. b. the price of X decreases. c. income increases. d. All of the above would be correct. 4. The consumers optimum is where a. MUx/MUy = Py/Px b. MUx/Py = MUy/Px c. Px/MUx = Py/MUy d. MUx/MUy = Px/Py Figure 21-7 5. Refer to Figure 21-7. Assume that the consumer depicted in the figure has an income of $20. The price of Skittles is $2 and the price of MMs is $4. This consumer will choose a consumption bundle where the marginal rate of substitution is a. 2. b. 2/3. c. 1/2. d. 1/3. 6. Refer to Figure 21-7. Assume that the consumer depicted in the figure faces prices and income such that she optimizes at point B. According to the graph, what change would force the consumer to move to point A? a. a decrease in the price of Skittles b. a decrease in the price of MMs c. an increase in the price of Skittles d. an increase in the price of MMs 7. All other things being equal, if the cost of the inputs used in the production of some good declines, we would expect to see: a. P*↓ Q*↑ b. P*↓ Q*↓ c. P*↑ Q*↑ d. P*↑ Q*↓ 8. Under which of the following conditions would none of the burden of a tax fall on producers? a. Consumers have to pay the tax b. Demand is perfectly inelastic c. Supply is perfectly inelastic d. Demand is perfectly elastic 9. Given a consumers indifference curves, the demand curve for a go