Exercise Consumer Behaviour

1970 Words8 Pages
MANAGEMENT DEPARTMENT FACULTY OF MANAGEMENT AND HUMAN RESOURCE DEVELOPMENT UNIVERSITI TEKNOLOGI MALAYSIA _____________________________________________________________________________ SHD 1113 PRINCIPLES OF MICROECONOMICS SEMESTER I 2012/2013 EXERCISE 4 PART A 1. In the analysis of the household, utility refers to a. public utility. b. the level of satisfaction. c. the household’s capacity to consume. d. none of the above. 2. Which of the following is consistent with the principle of diminishing utility? a. The second piece of pie tasted better than the first. b. The second piece of pie was good, but it didn’t taste as good as the first piece. c. a and b. d. None of the above. 3. The slope of the household’s budget line is a. determined by the household’s tastes. b. the marginal rate of substitution. c. determined by the household’s money income. d. the ratio of the prices of goods consumed. 4. Sharmila has a budget line for CDs and scarves. CDs are on the vertical axis and scarves on the horizontal. Her budget line becomes steeper as a. the price of a CD falls. b.the price of a CD rises. c. her income falls. d. her income rises. 5. A consumer that spend all of her income on a good a. would be at a point outside of her budget constraint. b. would be at a point inside her budget constraint. c. would not be consuming positive quantities of all goods. d. must be consuming at a point where her budget constraint touches one of the axes. 6. Given Px = $2 and Py = $5 when income is $20, the maximum amount of good x that can be purchased is a. 5. b. 10. c. 15. d. cannot be determined. 7. If money income remain unchanged as both prices double,

More about Exercise Consumer Behaviour

Open Document