Principles of Microeconomics (Econ 2) Signature:
Drake University, Summer 2008
William M. Boal Printed name:
QUIZ #6 VERSION B
“Consumer Choice”
August 5, 2008
INSTRUCTIONS: This quiz is closed-book, closed-notes. Simple calculators are permitted, but graphing calculators or
calculators with alphabetical keyboards are NOT permitted. Numerical answers, if rounded, must be correct to at least 3
significant digits. Point values for each question are noted in brackets. Maximum total points are 100.
I. Multiple choice: Circle the one best answer to each question. [3 pts each: 48 pts total]
(1) Combinations of goods outside the budget line
a. are not affordable.
b. are exactly affordable.
c. can be purchased with money left over.
d. have a total cost of zero.
(2) Combinations of goods inside the budget line
a. are not affordable.
b. are exactly affordable.
c. can be purchased with money left over.
d. have a total cost of zero.
(3) Suppose the price of a can of orange juice is $1.25
and the price of a gallon of milk is $3.75. The
consumer's opportunity cost of a gallon of milk is
a. 1/3 of a can of orange juice.
b. 1.25 cans of orange juice.
c. 3 cans of orange juice.
d. 3.75 cans of orange juice.
(4) In the graph below, the shift in the budget line could
be caused by
a. an increase in income.
b. a decrease in income.
c. an increase in the price of food.
d. a decrease in the price of food.
e. an increase in the price of other goods.
f. a decrease in the price of other goods.
(5) In the graph below, the rotation of the budget line
could be caused by
a. an increase in income.
b. a decrease in income.
c. an increase in the price of gasoline.
d. a decrease in the price of gasoline.
e. an increase in the price of other goods.
f. a decrease in the price of other goods.
(6) If the consumer’s income and all prices decrease by
10%, then
a. the slope of the budget line does not change but the
intercepts do.
b. the slope of the budget line changes.
c. the budget line becomes curved away from the
origin.
d. the budget line does not change.
Other goods
Food
Gasoline
Other goods
