bài tập vi mô chapter 4

Practice Question for Chapter 4.

The theories of consumer behavior

PART 1: Answer true or false with a short explanation and use a graph if necessary

1. When two goods are complements, the indifference curves are L-shaped.

2. When two goods are substitutable, the indifference curves are right angles.

3. The marginal rate of substitution does not change for perfect substitutes.

4. At the optimum, the consumer chooses consumption of the two goods so that the

marginal rate of substitution equals the relative price ratio.

5. If a consumer wants more of a good when his income rises, economists call it an

inferior good.

6. If , , , , the consumer should consume more Y and less X

PART 2: Exercises

1. Answer the following questions based on the table.

A consumer can consume the following bundles of apples and bananas when the price of

apples is $2 each and the price of bananas is $3 each.

Apples Bananas

12 0

6 4

0 8

a. How much is this consumer's income?

b. Draw a budget constraint given this information. Label it BL1.

c. Construct a new budget constraint showing the change in the price of apples by $1. Label

this BL2.

d. Given the original prices for apples($2) and bananas ($3), construct a new budget

constraint if this consumer's income increased to $48. Label this BL3.

e. Construct a new budget constraint showing the change if the price of rice apples falls to $1

and the price of bananas falls to $1.5. Compare this budget constraint with BL3

2. Draw indifference curves that reflect the following preferences.