2012 Quiz 1

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1. "At the price of GHC100, tickets for the Sonnie Badu’s music concert at national theatre are expensive. Yet, there are long queues (lines) of people who wish to buy them. Many people who desire tickets will not be able to find them." From this quote, we know that the price of the music concert tickets must be:

	below equilibrium
	above equilibrium
	equal to equilibrium
	none of the above

2. If point B lies above and to the right of A on a two-commodity indifference map, and the indifference curve passing through point A is characterized by a utility level of 1, then the utility level of the indifference curve passing through point B has utility

	greater than 1
	equal to 1
	less than 1
	equal to zero

3. Assume that the market for computers begins in equilibrium. Then, there is a decrease in a price of Pentium processors used in the production of computers. When the new equilibrium is reached,

	the price and quantity of computers will both have risen
	the price and quantity of computers will both have fallen
	the price of computers will have risen and the quantity will have fallen
	the price of computers will have fallen and the quantity will have risen

4. Assume that the market for the stock of Microsoft begins in equilibrium. Then, both buyers and sellers expect that the new Linux (a competitor of Microsoft Windows) will be a large success, reducing Microsoft sales. When the new equilibrium is reached,

	the price and quantity of the stock will both have risen
	the quantity of the stock will fall and the price will rise
	the quantity of the stock will fall but the effect on price cannot be determined
	the price of the stock will fall but the effect on quantity cannot be determined

5. Which of the following is a correct representation of the budget constraint in a world with only food and shelter, where M=income, = price of food, = shelter price, S=the quantity of shelter, and F=the quantity of food.

6. Indifference curves that intersect would be illogical constructs because

7. The marginal rate of substitution of good X for good Y is the number of units of good X that a customer will accept instead of good Y to increase his or her satisfaction.

	True
	False

8. The shape of a consumer’s indifference curve is generally assumed to be unaffected by price changes.

	True
	False

9. The shape of a consumer’s indifference curve is generally assumed to be unaffected by price changes.

	True
	False

10. A person’s tastes are like his or her fingerprints: they don’t change.

	True
	False

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