AGEC Final Exam Study Guide – Practice Questions, Flashcards &
Comprehensive Review
Which of the following is not a property of an indifference curve?
Convex to the origin
Concave to the origin
Downward sloping to the right
Cannot intersect with other indifference curves
Utility is maximized where the indifference curve is tangent to the budget line - ANS
✔✔Concave to the origin
The point where the indifference curve and the budget line are tangent is where consumers
maximize their utility given their budget constraint
True
False - ANS ✔✔True
An indifference curve identifies all combinations of all goods that gives us the same level of
utility
True
False - ANS ✔✔False
As we move upward to the right from the origin from one indifference curve to the next, utility
decreases
,True
False - ANS ✔✔False
How many farms were there in Louisiana in 2017?
47,386
27,386
17,386
37,386
7,386 - ANS ✔✔27,386
U.S. Gross National Product refers to the total value of goods and services produced only within
the U.S. either by foreign or domestic resources
True
False - ANS ✔✔False
The income approach of calculating GDP sums up the value of all purchases or expenditures
made by final consumers
True
False - ANS ✔✔False
The point where the indifference curve and the budget line are tangent represents the point
where consumers maximize their utility given their budget constraint
True
,False - ANS ✔✔True
Cross-price elasticity of demand measures
The responsiveness of the quantity of a good demanded with changes in income
The percent change in price when there is a percent change in quantity
The responsiveness of quantity demanded to changes in price
The percent change in the quantity demanded of good two when there is a change in the price
of good one - ANS ✔✔The percent change in the quantity demanded of good two when there is
a change in the price of good one
When population increases, which of the following is true for a demand curve, ceteris paribus?
There is no shift in the demand curve
You move upward along the demand curve
You move downward along the demand curve
The demand curve shifts to the right
The demand curve shifts to the left - ANS ✔✔The demand curve shifts to the right
In the product or commodity market which of the following is true?
, Households buy inputs or resources and businesses sell them
Households sell commodities and businesses buy them
Households sell inputs or resources and businesses buy them
Households buy commodities and businesses sell them
None of these - ANS ✔✔Households buy commodities and businesses sell them
A movement along the demand curve is referred to as a change in quantity demanded
True
False - ANS ✔✔True
For a producer, the optimum level of production is reached when:
One or more unit of the variable input adds to the revenue just what it costs
One more unit of the variable input adds more revenue than what it costs
One more unit of the variable input adds less to revenue than it costs
None of these - ANS ✔✔One more unit of the variable input adds to the revenue just what it
costs
Comprehensive Review
Which of the following is not a property of an indifference curve?
Convex to the origin
Concave to the origin
Downward sloping to the right
Cannot intersect with other indifference curves
Utility is maximized where the indifference curve is tangent to the budget line - ANS
✔✔Concave to the origin
The point where the indifference curve and the budget line are tangent is where consumers
maximize their utility given their budget constraint
True
False - ANS ✔✔True
An indifference curve identifies all combinations of all goods that gives us the same level of
utility
True
False - ANS ✔✔False
As we move upward to the right from the origin from one indifference curve to the next, utility
decreases
,True
False - ANS ✔✔False
How many farms were there in Louisiana in 2017?
47,386
27,386
17,386
37,386
7,386 - ANS ✔✔27,386
U.S. Gross National Product refers to the total value of goods and services produced only within
the U.S. either by foreign or domestic resources
True
False - ANS ✔✔False
The income approach of calculating GDP sums up the value of all purchases or expenditures
made by final consumers
True
False - ANS ✔✔False
The point where the indifference curve and the budget line are tangent represents the point
where consumers maximize their utility given their budget constraint
True
,False - ANS ✔✔True
Cross-price elasticity of demand measures
The responsiveness of the quantity of a good demanded with changes in income
The percent change in price when there is a percent change in quantity
The responsiveness of quantity demanded to changes in price
The percent change in the quantity demanded of good two when there is a change in the price
of good one - ANS ✔✔The percent change in the quantity demanded of good two when there is
a change in the price of good one
When population increases, which of the following is true for a demand curve, ceteris paribus?
There is no shift in the demand curve
You move upward along the demand curve
You move downward along the demand curve
The demand curve shifts to the right
The demand curve shifts to the left - ANS ✔✔The demand curve shifts to the right
In the product or commodity market which of the following is true?
, Households buy inputs or resources and businesses sell them
Households sell commodities and businesses buy them
Households sell inputs or resources and businesses buy them
Households buy commodities and businesses sell them
None of these - ANS ✔✔Households buy commodities and businesses sell them
A movement along the demand curve is referred to as a change in quantity demanded
True
False - ANS ✔✔True
For a producer, the optimum level of production is reached when:
One or more unit of the variable input adds to the revenue just what it costs
One more unit of the variable input adds more revenue than what it costs
One more unit of the variable input adds less to revenue than it costs
None of these - ANS ✔✔One more unit of the variable input adds to the revenue just what it
costs
