MBA 651 - CHAPTER 4 CONNECT EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
Due to the complexities of human thought process: - Answers behavior models are abstractions of the
way we make decisions.
behavior models are simplifications of real-world human decision-making.
Consumer ______ represent the possible goods and services consumers can afford to consume and
consumer ______ determine which of these goods will be consumed. - Answers opportunities,
preferences
If a consumer spends all of his or her income on either good X or good Y or a combination of both,
then the budget line is given by which of the following? - Answers PxX + PyY = M
When consumer income changes and prices are held constant, the slope of the budget line...? -
Answers does not change
If the prices of BOTH good X and good Y double, what is the effect on the budget line (x is measured
on the horizontal axis, y on the vertical axis)? - Answers Budget line shifts to left
The budget set defines combinations of goods and services - Answers that are affordable
True or false: If a consumer is consuming their equilibrium consumption bundle and the price of one
of the goods decreases while all other prices are unchanged, the consumer can reach a higher level of
satisfaction. - Answers True
Given fixed prices, when consumer income increases, the budget line shifts to the ______________-
(left/right). - Answers right
When income is constant and the price of good X, PX, decreases, what is the effect on the budget line
(x is measured on the horizontal axis, y on the vertical axis)? - Answers The budget line rotates
counterclockwise.
In the case of a budget constraint for two normal goods, X and Y, an increase in a consumer's income
will _____. - Answers have the same effect as a decrease in the price of both X and Y
shift the budget constraint to the right
The affordable bundle that generates the most consumer satisfaction is given at _____. - Answers -
consumer equilibrium
-MRS = PxPy
The movement along a given indifference curve due to a change in the relative prices of goods is
called the ____________ effect - Answers substitution
True or false: If a consumer is consuming their equilibrium consumption bundle and the price of one
of the goods changes, this will not change the consumer's equilibrium consumption bundle. - Answers
false
A buy-one-get-one free deal makes the budget line between the first and the second unit of the good
_______. - Answers horizontal
When consumer income changes and prices are held constant, the slope of the budget line_______? -
Answers does not change
Workers' behavior can be analyzed using which of the following? - Answers indifference curves
When income is constant and the price of good X, PX, increases, what is the effect on the budget line
(x is measured on the horizontal axis, y on the vertical axis)? - Answers the budget line rotates
clockwise
A change in a consumer's income changes consumption patterns because changes in income -
Answers expand or contract the budget constraint.
The substitution effect reflects how a consumer will react to - Answers a different market rate of
substitution.
A buy-one-get-one free deal....? - Answers reduces only the price of the second unit purchased.
Given a fixed opportunity set that consists of 24 hours, workers will generally try to consume a bundle
of labor and leisure that does which of the following? - Answers Achieves the highest affordable
indifference curve
Indifference curve analysis is a helpful tool used to derive....? - Answers the demand curve
The market demand curve is the ____________ summation of all the individual demand curves. -
Answers horizontal
An increase in the price of good X rotates the budget line, alters the equilibrium bundle, and... -
Answers indicates different quantities demanded at different prices.
provides two points on a demand curve.
Due to the complexities of human thought process: - Answers behavior models are abstractions of the
way we make decisions.
behavior models are simplifications of real-world human decision-making.
Consumer ______ represent the possible goods and services consumers can afford to consume and
consumer ______ determine which of these goods will be consumed. - Answers opportunities,
preferences
If a consumer spends all of his or her income on either good X or good Y or a combination of both,
then the budget line is given by which of the following? - Answers PxX + PyY = M
When consumer income changes and prices are held constant, the slope of the budget line...? -
Answers does not change
If the prices of BOTH good X and good Y double, what is the effect on the budget line (x is measured
on the horizontal axis, y on the vertical axis)? - Answers Budget line shifts to left
The budget set defines combinations of goods and services - Answers that are affordable
True or false: If a consumer is consuming their equilibrium consumption bundle and the price of one
of the goods decreases while all other prices are unchanged, the consumer can reach a higher level of
satisfaction. - Answers True
Given fixed prices, when consumer income increases, the budget line shifts to the ______________-
(left/right). - Answers right
When income is constant and the price of good X, PX, decreases, what is the effect on the budget line
(x is measured on the horizontal axis, y on the vertical axis)? - Answers The budget line rotates
counterclockwise.
In the case of a budget constraint for two normal goods, X and Y, an increase in a consumer's income
will _____. - Answers have the same effect as a decrease in the price of both X and Y
shift the budget constraint to the right
The affordable bundle that generates the most consumer satisfaction is given at _____. - Answers -
consumer equilibrium
-MRS = PxPy
The movement along a given indifference curve due to a change in the relative prices of goods is
called the ____________ effect - Answers substitution
True or false: If a consumer is consuming their equilibrium consumption bundle and the price of one
of the goods changes, this will not change the consumer's equilibrium consumption bundle. - Answers
false
A buy-one-get-one free deal makes the budget line between the first and the second unit of the good
_______. - Answers horizontal
When consumer income changes and prices are held constant, the slope of the budget line_______? -
Answers does not change
Workers' behavior can be analyzed using which of the following? - Answers indifference curves
When income is constant and the price of good X, PX, increases, what is the effect on the budget line
(x is measured on the horizontal axis, y on the vertical axis)? - Answers the budget line rotates
clockwise
A change in a consumer's income changes consumption patterns because changes in income -
Answers expand or contract the budget constraint.
The substitution effect reflects how a consumer will react to - Answers a different market rate of
substitution.
A buy-one-get-one free deal....? - Answers reduces only the price of the second unit purchased.
Given a fixed opportunity set that consists of 24 hours, workers will generally try to consume a bundle
of labor and leisure that does which of the following? - Answers Achieves the highest affordable
indifference curve
Indifference curve analysis is a helpful tool used to derive....? - Answers the demand curve
The market demand curve is the ____________ summation of all the individual demand curves. -
Answers horizontal
An increase in the price of good X rotates the budget line, alters the equilibrium bundle, and... -
Answers indicates different quantities demanded at different prices.
provides two points on a demand curve.
