759 760 An indifference curve is a line that shows all of the consumption bundles that an individual can purchase with a given income Incorrect yield the same total utility for an individual True Answer Correct yield the same marginal utility Incorrect have the same marginal rate of substitution Incorrect When Laurie asks Matt if he wants a large popcorn and small soda or a large soda and small popcorn Matt says Oh I m indifferent This means Matt doesn t want popcorn and soda Incorrect thinks both bundles give him the same utility True Answer Correct thinks both bundles give him no utility Incorrect thinks the utility he gained from popcorn and soda exactly equals their cost Incorrect 761 Figure and Table An Indifference Curve Map Reference Ref 10 1 Figure and Table Indifference Curve Map Look at the figure An Indifference Curve Map Which of the following statements is true Combination A is preferred to combination B Incorrect Combination B is preferred to combination D Incorrect Combination C is preferred to combination A Incorrect Combination B is preferred to combination C True Answer Correct Combinations of two goods that yield equal levels of utility are shown on a n curve indifference True Answer Correct budget Incorrect marginal utility Incorrect utility maximizing Incorrect The slope of a n curve shows the rate at which two goods can be exchanged the consumer s marginal utility by increasing marginal utility Incorrect indifference without affecting total utility True Answer Correct iso utility without affecting budget Incorrect indifference without affecting budget Incorrect An indifference curve shows combinations of two goods that yield equal prices Incorrect equal money income Incorrect equal satisfaction True Answer Correct increasing prices Incorrect If a consumer moves upward along an indifference curve his or her total utility remains constant True Answer Correct first decreases then increases Incorrect increases Incorrect first increases then decreases Incorrect If two combinations of two goods yield the same level of satisfaction then they are on the same price line Incorrect the same budget constraint Incorrect 762 763 764 765 766 767 768 769 770 the same indifference curve True Answer Correct different indifference curves Incorrect Higher indifference curves represent less utility than lower indifference curves Incorrect more utility than lower indifference curves True Answer Correct the same level of utility as lower indifference curves Incorrect unknown levels of utility compared to lower indifference curves Incorrect In terms of indifference curves an increase in total utility is represented by a shift to the right to a higher indifference curve True Answer Correct shift to the left to a lower indifference curve Incorrect movement upward along an indifference curve Incorrect movement downward along an indifference curve Incorrect If combination A lies on a higher indifference curve than combination B and combination B lies on a higher indifference curve than combination C it must be that the total utility associated with combination A is the total utility associated with combination C less than Incorrect more than True Answer Correct equal to Incorrect more than or equal to Incorrect A n is a curve that shows all of the consumption bundles that yield the same level of total utility for an individual budget line Incorrect indifference curve True Answer Correct utility function Incorrect marginal rate of substitution Incorrect 771 772 Reference Ref 10 2 Table Bundles of X and Y Look at the table Bundles of X and Y A consumer can choose among combinations of goods X and Y The table documents several bundles of X and Y and the utility produced by those combinations Given this information it can be said that bundles A and B are on the same indifference curve True Answer Correct bundles A and C are on the same indifference curve Incorrect bundle D is on the highest indifference curve Incorrect bundle C is on the highest indifference curve and bundles A and B are on the lowest indifference curve Incorrect Reference Ref 10 2 Table Bundles of X and Y Look at the table Bundles of X and Y A consumer can choose among combinations of goods X and Y The table documents several bundles of X and Y and the utility produced by those combinations Given this information it can be said that bundle D is preferred to bundles A and B Incorrect the consumer is indifferent among bundles A B and C Incorrect bundles C and D are both preferred to bundles A and B Incorrect bundle C is preferred to all other bundles True Answer Correct 773 774 775 776 Consumption bundles that yield equal levels of total utility are shown on a budget line Incorrect a marginal utility curve Incorrect an indifference curve True Answer Correct a utility maximizing curve Incorrect If a consumer moves downward along an indifference curve his or her total utility remains constant True Answer Correct first decreases then increases Incorrect decreases Incorrect first increases then decreases Incorrect Assume that two combinations of two goods yield the same level of satisfaction We can conclude that these combinations are on the same price line Incorrect the same budget constraint Incorrect the same indifference curve True Answer Correct different indifference curves Incorrect A curve that represents combinations of two goods that yield equal levels of satisfaction isa n indifference curve True Answer Correct budget curve Incorrect marginal utility curve Incorrect price consumption curve Incorrect 777 Which of the following statements is true Higher indifference curves represent less utility than lower curves Incorrect Higher indifference curves represent more utility than lower curves True Answer Correct Higher indifference curves represent the same utility as lower curves Incorrect Higher indifference curves may represent either more or less utility than lower curves Incorrect 778 In terms of indifference curves higher total utility is represented by a higher indifference curve True Answer Correct a lower indifference curve Incorrect movement leftward along an indifference curve Incorrect movement rightward along an indifference curve Incorrect 779 Greater levels of utility are represented by 780 indifference curves that are farther from the origin True Answer Correct indifference curves that are closer to the origin Incorrect moving up to the left on the same indifference curve Incorrect moving down to the
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