Consumer Theory vs. Real Consumers

A. will always increase the quantity of labor supplied
B. will increase the amount of labor supplied if the substitution effect outweighs the income effect
C. will increase the amount of labor supplied if the income effect outweighs the substitution effect
D. will always decrease the amount of labor supplied

A. inferior effect
B. normal effect
C. substitution effect
D. complementary effect
E. income effect

A. X to point Y
B. X to point Z
C. Y to point X
D. Z to point X

A. Z
B. X
C. Y
D. the optimal point cannot be determined from this graph

A. a complementary good
B. an inferior good
C. a normal good
D. a substitute good

A. the slope of the indifference curve equals the slope of the budget constraint
B. the indifference curve is tangent to the budget constraint
C. the relative prices of the two goods equals the marginal rate of substitution
D. none of these answers are true
E. all of these answers are true

A. Indifference curves are downward sloping
B. indifference curves are bowed outward
C. Indifference curves do not cross each other
D. Higher indifference curve is preferred to lower ones

A. 2
B. 10
C. 1/2
D. 5

A. right angles
B. bowed outward
C. straight lines
D. nonexistent
E. bowed inward

A. an indifference curve
B. the budget constraint
C. the marginal rate of substitution
D. the consumption limits