Test Bank Complete_
Intermediate Microeconomics: A Modern Approach Tenth Edition (10th) 2024,
By Hal R. Varian, Marc Melitz
All Chapters 1-38| Latest Edition With Verified Answers| Rated A+
From: [Bestmaxsolutions.Stuvia
,Chapter 2: Budget Constraint ------------------------------------------------------------------------------------- 4
Chapter 3: Preferences -------------------------------------------------------------------------------------------- 27
Chapter 4: Utility --------------------------------------------------------------------------------------------------- 44
Chapter 5: Choice--------------------------------------------------------------------------------------------------- 62
Chapter 6: Demand ------------------------------------------------------------------------------------------------ 77
Chapter 7: Revealed Preference -------------------------------------------------------------------------------- 94
Chapter 8: Slutsky Equation ----------------------------------------------------------------------------------- 110
Chapter 9: Buying And Selling -------------------------------------------------------------------------------- 127
Chapter 10: Intertemporal Choice --------------------------------------------------------------------------- 143
Chapter 11: Asset Markets------------------------------------------------------------------------------------- 159
Chapter 12: Uncertainty ---------------------------------------------------------------------------------------- 175
Chapter 13: Risky Assets---------------------------------------------------------------------------------------- 192
Chapter 14: Consumer’s Surplus ------------------------------------------------------------------------------ 199
Chapter 15: Market Demand ---------------------------------------------------------------------------------- 215
Chapter 16: Equilibrium ---------------------------------------------------------------------------------------- 228
Chapter 17: Measurement ------------------------------------------------------------------------------------- 240
Chapter 18: Auctions -------------------------------------------------------------------------------------------- 250
Chapter 19: Technology ---------------------------------------------------------------------------------------- 270
Chapter 20: Profit Maximization ----------------------------------------------------------------------------- 284
Chapter 21: Cost Minimization ------------------------------------------------------------------------------- 294
Chapter 22: Cost Curves ---------------------------------------------------------------------------------------- 308
Chapter 23: Firm Supply ---------------------------------------------------------------------------------------- 322
Chapter 24: Industry Supply ----------------------------------------------------------------------------------- 329
Chapter 25: Monopoly ------------------------------------------------------------------------------------------ 347
Chapter 26: Monopoly Behavior ----------------------------------------------------------------------------- 366
Chapter 27: Factor Markets ----------------------------------------------------------------------------------- 377
Chapter 28: Oligopoly ------------------------------------------------------------------------------------------- 389
Chapter 29: Game Theory -------------------------------------------------------------------------------------- 407
Chapter 30: Game Applications ------------------------------------------------------------------------------ 426
Chapter 31: Behavioral Economics -------------------------------------------------------------------------- 446
,Chapter 32: Exchange ------------------------------------------------------------------------------------------- 456
Chapter 33: Production ----------------------------------------------------------------------------------------- 476
Chapter 34: Welfare --------------------------------------------------------------------------------------------- 495
Chapter 35: Externalities --------------------------------------------------------------------------------------- 511
Chapter 36: Public Goods -------------------------------------------------------------------------------------- 529
Chapter 37: Asymmetric Information ----------------------------------------------------------------------- 543
Chapter 38: Information Technology ----------------------------------------------------------------------- 559
,Chapter 2: Budget Constraint
Hal R. Varian: Intermediate Microeconomics: A Modern Approach Tenth Edition, (2024) Test Bank
MULTIPLE CHOICE
1. In Problem 1, If You Have An Income Of $18 To Spend, If Commodity 1 Cost $3 Per
Unit, And If Commodity 2 Costs $9 Per Unit, Then The Equation For Your Budget Line
Can Be Written
A. X1/3 X2/9 18.
B. (X1 X2)/12 18.
C. X1 3x2 6.
D. 4x1 10x2 19.
E. 12(X1 X2) 18.
ANS: C
The Budget Equation Is Derived By Dividing Income By The Price Per Unit Of Each
Good:
3x1+9x2=18⇒X1+3x2=63x_1 + 9x_2 = 18 \Rightarrow X_1 + 3x_2 = 63x1+9x2
=18⇒X1+3x2=6
This Shows The Combinations Of X₁ And X₂ That Can Be Purchased Within The $18
Budget.
2. In Problem 1, If You Have An Income Of $18 To Spend, If Commodity 1 Costs $3 Per
Unit, And If Commodity 2 Costs $9 Per Unit, Then The Equation For Your Budget Line
Can Be Written
A. X1/3 X2/9 18.
,B. 4x1 10x2 19.
C. X1 3x2 6.
D. (X1 X2)/12 18.
E. 12(X1 X2) 18.
ANS: C
Same Logic As Above: 3x1+9x2=18⇒X1+3x2=63x_1 + 9x_2 = 18 \Rightarrow X_1 +
3x_2 = 63x1+9x2=18⇒X1+3x2=6
This Represents The Correct Budget Line Based On Prices And Income.
3. In Problem 1, If You Have An Income Of $30 To Spend, If Commodity 1 Costs $5 Per
Unit, And If Commodity 2 Costs $10 Per Unit, Then The Equation For Your Budget Line
Can Be Written
A. 6x1 11x2 31.
B. (X1 X2)/15 30.
C. X1 2x2 6.
D. X1/5 X2/10 30.
E. 15(X1 X2) 30.
ANS: C
5x1+10x2=30
Divide All Terms By 5:
X1+2x2=6x_1 + 2x_2 = 6x1+2x2=6
This Is The Correct Budget Line Equation.
,4. In Problem 1, If You Have An Income Of $16 To Spend, If Commodity 1 Costs $2 Per
Unit, And If Commodity 2 Costs $4 Per Unit, Then The Equation For Your Budget Line
Can Be Written
A. X1 2x2 8.
B. 3x1 5x2 17.
C. (X1 X2)/6 16
D. X1/2 X2/4 16.
E. 6(X1 X2) 16.
ANS: A
Start From 2x1+4x2=162x_1 + 4x_2 = 162x1+4x2=16.
Divide By 2:
X1+2x2=8x_1 + 2x_2 = 8x1+2x2=8
Correct Representation Of Budget Constraint.
5. In Problem 1, If You Have An Income Of $80 To Spend, If Commodity 1 Costs $4 Per
Unit, And If Commodity 2 Costs $16 Per Unit, Then The Equation For Your Budget Line
Can Be Written
A. X1 4x2 20.
B. (X1 X2)/20 80.
C. X1/4 X2/16 80.
D. 5x1 17x2 81.
E. 20(X1 X2) 80.
, ANS: A
Budget: 4x1+16x2=804x_1 + 16x_2 = 804x1+16x2=80
Divide By 4:
X1+4x2=20x_1 + 4x_2 = 20x1+4x2=20
This Is The Correct Budget Equation.
6. In Problem 3, If You Could Exactly Afford Either 2 Units Of X And 7 Units Of Y, Or
4 Units Of X And 3 Units Of Y, Then If You Spent All Of Your Income On Y, How
Many Units Of Y Could You Buy?
A. 11
B. 7
C. 15
D. 6
E. None Of The Above.
ANS: A
Dif: 1
Let The Price Of X Be Pxp_Xpx, Y Be Pyp_Ypy.
From The First Bundle: 2Px+7Py=I2P_X + 7P_Y = I2Px+7Py=I
Second Bundle: 4Px+3Py=I4P_X + 3P_Y = I4Px+3Py=I
Subtract Equations:
(4Px+3Py)−(2Px+7Py)=0⇒2Px−4Py=0⇒Px=2Py(4P_X + 3P_Y) - (2P_X + 7P_Y) = 0
\Rightarrow 2P_X - 4P_Y = 0 \Rightarrow P_X = 2P_Y(4Px+3Py)−(2Px+7Py)=0⇒2Px
−4Py=0⇒Px=2Py
Plug Into One:
2(2Py)+7Py=11Py⇒I=11Py2(2P_Y) + 7P_Y = 11P_Y \Rightarrow I = 11P_Y2(2Py
)+7Py=11Py⇒I=11Py
Thus, If All Income Is Spent On Y:
I/Py=11I / P_Y = 11I/Py=11
Intermediate Microeconomics: A Modern Approach Tenth Edition (10th) 2024,
By Hal R. Varian, Marc Melitz
All Chapters 1-38| Latest Edition With Verified Answers| Rated A+
From: [Bestmaxsolutions.Stuvia
,Chapter 2: Budget Constraint ------------------------------------------------------------------------------------- 4
Chapter 3: Preferences -------------------------------------------------------------------------------------------- 27
Chapter 4: Utility --------------------------------------------------------------------------------------------------- 44
Chapter 5: Choice--------------------------------------------------------------------------------------------------- 62
Chapter 6: Demand ------------------------------------------------------------------------------------------------ 77
Chapter 7: Revealed Preference -------------------------------------------------------------------------------- 94
Chapter 8: Slutsky Equation ----------------------------------------------------------------------------------- 110
Chapter 9: Buying And Selling -------------------------------------------------------------------------------- 127
Chapter 10: Intertemporal Choice --------------------------------------------------------------------------- 143
Chapter 11: Asset Markets------------------------------------------------------------------------------------- 159
Chapter 12: Uncertainty ---------------------------------------------------------------------------------------- 175
Chapter 13: Risky Assets---------------------------------------------------------------------------------------- 192
Chapter 14: Consumer’s Surplus ------------------------------------------------------------------------------ 199
Chapter 15: Market Demand ---------------------------------------------------------------------------------- 215
Chapter 16: Equilibrium ---------------------------------------------------------------------------------------- 228
Chapter 17: Measurement ------------------------------------------------------------------------------------- 240
Chapter 18: Auctions -------------------------------------------------------------------------------------------- 250
Chapter 19: Technology ---------------------------------------------------------------------------------------- 270
Chapter 20: Profit Maximization ----------------------------------------------------------------------------- 284
Chapter 21: Cost Minimization ------------------------------------------------------------------------------- 294
Chapter 22: Cost Curves ---------------------------------------------------------------------------------------- 308
Chapter 23: Firm Supply ---------------------------------------------------------------------------------------- 322
Chapter 24: Industry Supply ----------------------------------------------------------------------------------- 329
Chapter 25: Monopoly ------------------------------------------------------------------------------------------ 347
Chapter 26: Monopoly Behavior ----------------------------------------------------------------------------- 366
Chapter 27: Factor Markets ----------------------------------------------------------------------------------- 377
Chapter 28: Oligopoly ------------------------------------------------------------------------------------------- 389
Chapter 29: Game Theory -------------------------------------------------------------------------------------- 407
Chapter 30: Game Applications ------------------------------------------------------------------------------ 426
Chapter 31: Behavioral Economics -------------------------------------------------------------------------- 446
,Chapter 32: Exchange ------------------------------------------------------------------------------------------- 456
Chapter 33: Production ----------------------------------------------------------------------------------------- 476
Chapter 34: Welfare --------------------------------------------------------------------------------------------- 495
Chapter 35: Externalities --------------------------------------------------------------------------------------- 511
Chapter 36: Public Goods -------------------------------------------------------------------------------------- 529
Chapter 37: Asymmetric Information ----------------------------------------------------------------------- 543
Chapter 38: Information Technology ----------------------------------------------------------------------- 559
,Chapter 2: Budget Constraint
Hal R. Varian: Intermediate Microeconomics: A Modern Approach Tenth Edition, (2024) Test Bank
MULTIPLE CHOICE
1. In Problem 1, If You Have An Income Of $18 To Spend, If Commodity 1 Cost $3 Per
Unit, And If Commodity 2 Costs $9 Per Unit, Then The Equation For Your Budget Line
Can Be Written
A. X1/3 X2/9 18.
B. (X1 X2)/12 18.
C. X1 3x2 6.
D. 4x1 10x2 19.
E. 12(X1 X2) 18.
ANS: C
The Budget Equation Is Derived By Dividing Income By The Price Per Unit Of Each
Good:
3x1+9x2=18⇒X1+3x2=63x_1 + 9x_2 = 18 \Rightarrow X_1 + 3x_2 = 63x1+9x2
=18⇒X1+3x2=6
This Shows The Combinations Of X₁ And X₂ That Can Be Purchased Within The $18
Budget.
2. In Problem 1, If You Have An Income Of $18 To Spend, If Commodity 1 Costs $3 Per
Unit, And If Commodity 2 Costs $9 Per Unit, Then The Equation For Your Budget Line
Can Be Written
A. X1/3 X2/9 18.
,B. 4x1 10x2 19.
C. X1 3x2 6.
D. (X1 X2)/12 18.
E. 12(X1 X2) 18.
ANS: C
Same Logic As Above: 3x1+9x2=18⇒X1+3x2=63x_1 + 9x_2 = 18 \Rightarrow X_1 +
3x_2 = 63x1+9x2=18⇒X1+3x2=6
This Represents The Correct Budget Line Based On Prices And Income.
3. In Problem 1, If You Have An Income Of $30 To Spend, If Commodity 1 Costs $5 Per
Unit, And If Commodity 2 Costs $10 Per Unit, Then The Equation For Your Budget Line
Can Be Written
A. 6x1 11x2 31.
B. (X1 X2)/15 30.
C. X1 2x2 6.
D. X1/5 X2/10 30.
E. 15(X1 X2) 30.
ANS: C
5x1+10x2=30
Divide All Terms By 5:
X1+2x2=6x_1 + 2x_2 = 6x1+2x2=6
This Is The Correct Budget Line Equation.
,4. In Problem 1, If You Have An Income Of $16 To Spend, If Commodity 1 Costs $2 Per
Unit, And If Commodity 2 Costs $4 Per Unit, Then The Equation For Your Budget Line
Can Be Written
A. X1 2x2 8.
B. 3x1 5x2 17.
C. (X1 X2)/6 16
D. X1/2 X2/4 16.
E. 6(X1 X2) 16.
ANS: A
Start From 2x1+4x2=162x_1 + 4x_2 = 162x1+4x2=16.
Divide By 2:
X1+2x2=8x_1 + 2x_2 = 8x1+2x2=8
Correct Representation Of Budget Constraint.
5. In Problem 1, If You Have An Income Of $80 To Spend, If Commodity 1 Costs $4 Per
Unit, And If Commodity 2 Costs $16 Per Unit, Then The Equation For Your Budget Line
Can Be Written
A. X1 4x2 20.
B. (X1 X2)/20 80.
C. X1/4 X2/16 80.
D. 5x1 17x2 81.
E. 20(X1 X2) 80.
, ANS: A
Budget: 4x1+16x2=804x_1 + 16x_2 = 804x1+16x2=80
Divide By 4:
X1+4x2=20x_1 + 4x_2 = 20x1+4x2=20
This Is The Correct Budget Equation.
6. In Problem 3, If You Could Exactly Afford Either 2 Units Of X And 7 Units Of Y, Or
4 Units Of X And 3 Units Of Y, Then If You Spent All Of Your Income On Y, How
Many Units Of Y Could You Buy?
A. 11
B. 7
C. 15
D. 6
E. None Of The Above.
ANS: A
Dif: 1
Let The Price Of X Be Pxp_Xpx, Y Be Pyp_Ypy.
From The First Bundle: 2Px+7Py=I2P_X + 7P_Y = I2Px+7Py=I
Second Bundle: 4Px+3Py=I4P_X + 3P_Y = I4Px+3Py=I
Subtract Equations:
(4Px+3Py)−(2Px+7Py)=0⇒2Px−4Py=0⇒Px=2Py(4P_X + 3P_Y) - (2P_X + 7P_Y) = 0
\Rightarrow 2P_X - 4P_Y = 0 \Rightarrow P_X = 2P_Y(4Px+3Py)−(2Px+7Py)=0⇒2Px
−4Py=0⇒Px=2Py
Plug Into One:
2(2Py)+7Py=11Py⇒I=11Py2(2P_Y) + 7P_Y = 11P_Y \Rightarrow I = 11P_Y2(2Py
)+7Py=11Py⇒I=11Py
Thus, If All Income Is Spent On Y:
I/Py=11I / P_Y = 11I/Py=11
