MECO 6303 /MECO 6303 Final Exam 2. Questions With Answers. Complete Solution.

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MECO 6303 /MECO 6303 Final Exam 2. Questions With Answers. Complete Solution.Question 1 Figure 1 Refer to Figure 1. A consumer that chooses to spend all of her income on Diet Coke in the figure wil... l be at a point like Selected Answer: d. A, B, or C. Answers: a. D. b. C. c. C or E. d. A, B, or C. Question 2 2.2.2 Which of the following is a pure income effect for a particular consumer? Selected Answer: a. and b. of the above are pure income effects Answers: A 5% increase in her income A 5% increase in all of the prices she faces as a consumer A 5% decrease in the price some of the main items she purchases as a consumer All of the above are pure income effects a. and b. of the above are pure income effects Question 3 Along the demand curve Selected Answer: e. c and d of the above Answers: 0 out of 1 points 1 out of 1 points 0 out of 1 points a. the income effect must be positive b. the income effect must be negative c. the income effect may be positive or negative d. income effect and the substitution effect must be in the same direction e. c and d of the above Question 4 Which of the following is most likely an inferior good? Selected Answer: c. a bus ticket Answers: a. an antique car b. gasoline c. a bus ticket d. an airline ticket Question 5 5.2.1 The consumer buys Skittles and M&M’s (two types of candy) and has $20 to spend. T M&Ms is on the Y axis. he price of Skittles is $2 and the price of M&M's is $2. She will choose a consumption bundle where the slope of the budget line is Selected Answer: 1 Answers: 2. 1 1/2. 2/3. 1/3. Question 6 6.2.1 If a seller sells the idential product to two separate markets, and if the elasticity of demand in Market 1 is greater than the elasticity of demand in Market 2 (at every price), and if P1 is the price in Market 1, and P2 is the price in Market 2, then, in order to maximize profits, he should set the price so that Selected Answer: P1 > P2 Answers: P1 > P2 P1 = P2 P1 < P2 All of the above are possible [Show More]

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