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Microeconomics An Intuitive Approach With Calculus 2nd Edition Thomas Nechyba Test Bank 1
Microeconomics An Intuitive Approach With Calculus 2nd Edition Thomas Nechyba Test Bank 1
TRUEFALSE
(A) True
(B) False
Answer : (B)
(A) True
(B) False
Answer : (A)
(A) True
(B) False
Answer : (B)
4. There are no quasilinear tastes that have elasticity of substitution equal to 1 everywhere.
(A) True
(B) False
Answer : (A)
5. There are no quasilinear tastes that have constant elasticity of substitution.
(A) True
(B) False
Answer : (B)
(A) True
(B) False
Answer : (A)
(B) False
Answer : (A)
substitution is equal to .
False
Answer : (B)
9. All homogeneous functions (of any degree) are homothetic but not all homothetic functions are
homogeneous (of some degree).
False
Answer : (B)
10. If tastes are Cobb-Douglas, they can be represented by a utility function that is homogeneous of
degree k where k can take on any positive value.
False
Answer : (A)
11. When two goods are perfect substitutes, averages are better than extremes, resulting a
diminishing marginal rate of substitution.
(A) True
(B) False
Answer : (B)
(A) True
(B) False
Answer : (A)
MULTICHOICE
13. Suppose consumer cannot taste the difference between Miller Lite and Bud Light, but Miller Lite
is sold in 12 ounce cans while Bud Light is sold in 8 ounce cans. In a graph with cans of Miller Lite
on the horizontal and cans of Bud Light on the vertical axis, which of the following is the correct
slope for this consumer's indifference curves:
(A)
(B) -1
(C)
Answer : (C)
14. Consider the utility function . Which of the following are true statements about
the indifference maps represented by this function.
(B) MRS=-1 along a ray steeper than the 45 degree line if and only if .
(C) MRS=-1 along a ray shallower than the 45 degree line if and only if .
Answer : (A)
ESSAY
15. Suppose our tastes are homothetic. It is often observed that people become more rigid --- more
set in their ways --- as they get older. Can you translate this observation into "economics-speak" by
discussing which feature of our tastes is likely the be changing as we get older?
Graders Info :
The feature of our tastes that is indicative of "flexibility" is the degree of substitutability in our
indifference map. The more substitutable we think of goods, the more flexible we are in terms,
whereas we become more inflexible as our tastes treat goods as relatively more complementary.
Graders Info :
The parameter is increasing from a value as low as -1 to a value as high as --- causing our
elasticity of substitution to fall from a value as high as to one as low as 0 as we grow older.
17. Suppose the only characteristic of beer that a consumer cares about is alcohol content.
Currently, Bud Light and Miller Lite both have the same alcohol content.
a. Illustrate the consumer's indifference curves in a graph with ounces of Miller Lite on the
horizontal and ounces of Bud Light on the vertical axis.
b. Suppose that the producers of Bud Light lower the price of Bud Light. How will your answer to (a)
change?
c. Suppose that the producers of Bud Light lower the alcohol content of their beer by 50%. How will
your answer to (a) change?
d. Since we identify tastes with indifference maps, would you say that the consumer's tastes have
changed in (b) or (c)?
e. How could we change the units we use to measure Miller Lite in order to get the indifference map
in (c) to again look like the one in (a)?
Graders Info :
b. The answer will not change --- prices affect budgets, not tastes.
c. The indifference curves will again be straight lines, but this time with slope of -2.
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CHAPTER XVII.
BEWITCHED.
I his tidy little house in New Amsterdam, Adam sat reading a letter
from Governor William Phipps, written at Boston.
“I forgyve you yr merrie empersonashun and all ye other things alsoe, save ye going
away without goode-bye,” he read, “but let it pass. I wd write to say God Blesse you
bothe. And as I have never known such a goode blade as yrs in fight, I wd offer you to
make you my commander of ye forces to goe in war against ye French, where they do
threat to harasse our peeple as of yore——”
Adam halted here and looked up at the battered old sword on the wall.
His thought went truant, to his helpmate, away for a few minutes’ walk
to Goody Dune’s. He shook his head at the Governor’s generous offer.
“Well, well, William,” he said aloud, “I don’t know. I don’t know what
may be the matter, but—no more fighting for me, old comrade. I think it
must be that I—am bewitched.”
THE END.
Transcriber’s Notes:
Missing or obscured punctuation was silently
corrected.
Typographical errors were silently corrected.
Inconsistent spelling and hyphenation were made
consistent only when a predominant form was
found in this book.
*** END OF THE PROJECT GUTENBERG EBOOK WHEN A
WITCH IS YOUNG: A HISTORICAL NOVEL ***
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