True/false

Question 1

a person with reflexive preferences is someone who does not shop carefully?

Answer 1

falsk

Question 2

it follows from the weak axiom of revealed preferences that if a consumer chooses x when he can afford y and chooses y when he could afford x, then his income must have changed between the two observations

Answer 2

falsk

Question 3

if a good is an inferior good then an increase in its price will increase the demand?

Answer 3

falsk

Question 4

if a consumer is a buyer of some goods and a seller of other, then change in price will generate an extra income effect in thee slushy equation due to the regulation of thee consumers endowment

Answer 4

falsk

Question 5

the demand curve is inelastic for an inferior good and elastic for normal goods

Answer 5

falsk

Question 6

a fixed factor is a factor of production that is used in fixed proportion to the level of output

Answer 6

falsk

Question 7

average fixed costs never increase with output

Answer 7

sann

Question 8

the possibility of more firms entering an industry in the long run tends to make long-run industry supply more price elastic than short run supply

Answer 8

sann

Question 9

in bertand model competition between two firms, each firm believes that if it changes output the rival firm will change output to

Answer 9

falsk

Question 10

in a pure exchange economy if the initial allocation is pareto optimal then competitive equilibrium is fair

Answer 10

falsk

Question 11

If preferences are convex, then for any commodity bundle x, the set of commodity bundles that are worse than x is a convex set.

Answer 11

falsk

Question 12

With quasilinear preferences, the slope of indifference curves is constant along all rays through the origin.

Answer 12

falsk

Question 13

Sharon spends all of her income on peaches and strawberries. Peaches are a normal good for her. Her income increased by 20 percent and prices did not change. Her consumption of strawberries could not have increased by more than 20 percent.

Answer 13

sann

Question 14

In economic theory, the demand for a good must depend only on income and its own price and not on the prices of other goods.

Answer 14

falsk

Question 15

Jack has a backward-bending labor supply curve. At wages of $5 an hour he chooses to work 50 hours a week. His boss wants him to work more hours per week and offers him $5 an hour for the first 50 hours per week and $7 an hour for every hour beyond 50 hours per week. Because of his backward -bending supply curve, Jack might actually choose to work fewer hours.
If leisure is an inferior good, then an increase in the wage rate will make a person work more.

Answer 15

falsk

Question 16

There is a positive consumer’s surplus when the total amount the consumer pays for something is less than the amount she would be willing to pay rather than do without it altogether.

Answer 16

sann

Question 17

The area under the marginal cost curve measures total variable costs.

Answer 17

sann

Question 18

A Stackelberg leader chooses his actions on the assumption that his rival will adjust to the leader’s actions in such a way as to maximize the rival’s profits.

Answer 18

sann

Question 19

If the initial endowment is on the contract curve, then there must always be a competitive equilibrium in which no trade takes place

Answer 19

sann

Question 20

According to Arrow’s impossibility theorem, it is impossible to find a social ordering that is complete, reflexive, and transitive.

Answer 20

falsk