ECON 312 Exam 1 Questions with
complete solution 2025
Bella's budget line for x and y depends on all of the following except:
A: the amount of money she has to spend on
B:the price of x
C: her preferences between x and y
D: the price of y - correct answer C: her preferences between x and y
If preferences are transitive, more is always preferred to less. - correct answer
False
A person with reflexive preferences is someone who does not shop carefully. -
correct answer False
If someone has the utility function U = 1,000 + 2 min {x, y}, then x and y are
perfect complements for that person. - correct answer True
A consumer with convex preferences who is indifferent between the bundles
(5, 2) and (11, 6) will like the bundle (8, 4) at least as well as the first two
bundles. - correct answer False
If there are two goods, if a consumer prefers more of each good to less, and if
she has a diminishing marginal rate of substitution, then her preferences are
convex. - correct answer True
If preferences are convex, then for any commodity bundle x, the set of
commodity bundles that are worse than x is a convex set. - correct answer
True
, Bill Katz prefers more of good 1 to less and he prefers less of good 2 to more.
Bill has convex preferences. If we draw his indifference curves with good 1 on
the horizontal axis and good 2 on the vertical axis, then his indifference curves
have positive slope but get steeper as they rise. - correct answer False
Complete Preferences - correct answer We assume that any two bundles can
be compared. That is, given any x-bundle and any y-bundle, we assume that
(x1, x2) >_ (y1, y2), or vice versa, the consumer is indifferent between two
bundles.
Reflexive Preferences - correct answer We assume that any bundle is at
least as good as itself: (x1, x2) >_ (x1, x2)
Transitive Preferences - correct answer If the consumer thinks that X is at
least as good as Y, and that Y is at least as good as Z, then X is at least as
good as Z.
If two goods are both desirable and preferences are convex, then:
A: there must be a kink in the indifference curves
B: indifference curves must be straight lines
C: if two bundles are indifferent, then an average of the two bundles is worse
than either one
D: The marginal rate of substitution is constant along indifference curves
E: None of the above - correct answer E: None of the above
If there are only two goods, if more of good 1 is always preferred to less, and
if less of good 2 is always preferred to more, then indifference curves:
A: slope downward
B: Slope upward
complete solution 2025
Bella's budget line for x and y depends on all of the following except:
A: the amount of money she has to spend on
B:the price of x
C: her preferences between x and y
D: the price of y - correct answer C: her preferences between x and y
If preferences are transitive, more is always preferred to less. - correct answer
False
A person with reflexive preferences is someone who does not shop carefully. -
correct answer False
If someone has the utility function U = 1,000 + 2 min {x, y}, then x and y are
perfect complements for that person. - correct answer True
A consumer with convex preferences who is indifferent between the bundles
(5, 2) and (11, 6) will like the bundle (8, 4) at least as well as the first two
bundles. - correct answer False
If there are two goods, if a consumer prefers more of each good to less, and if
she has a diminishing marginal rate of substitution, then her preferences are
convex. - correct answer True
If preferences are convex, then for any commodity bundle x, the set of
commodity bundles that are worse than x is a convex set. - correct answer
True
, Bill Katz prefers more of good 1 to less and he prefers less of good 2 to more.
Bill has convex preferences. If we draw his indifference curves with good 1 on
the horizontal axis and good 2 on the vertical axis, then his indifference curves
have positive slope but get steeper as they rise. - correct answer False
Complete Preferences - correct answer We assume that any two bundles can
be compared. That is, given any x-bundle and any y-bundle, we assume that
(x1, x2) >_ (y1, y2), or vice versa, the consumer is indifferent between two
bundles.
Reflexive Preferences - correct answer We assume that any bundle is at
least as good as itself: (x1, x2) >_ (x1, x2)
Transitive Preferences - correct answer If the consumer thinks that X is at
least as good as Y, and that Y is at least as good as Z, then X is at least as
good as Z.
If two goods are both desirable and preferences are convex, then:
A: there must be a kink in the indifference curves
B: indifference curves must be straight lines
C: if two bundles are indifferent, then an average of the two bundles is worse
than either one
D: The marginal rate of substitution is constant along indifference curves
E: None of the above - correct answer E: None of the above
If there are only two goods, if more of good 1 is always preferred to less, and
if less of good 2 is always preferred to more, then indifference curves:
A: slope downward
B: Slope upward
