1 .		Which of the following is not an assumption made in this chapter in order to study household and firm behavior?    perfectly competitive markets   households have knowledge of all prices and quantities   firms have knowledge of all wages and costs   the substitution effect dominates the income effect in labor markets
2 .		If Carla has no wealth and is making a monthly income of $500, which of the following is not in her choice set? (The price of a dinner is $20, the price of a computer game is $50, and the price of a kayak trip is $100.)    2 dinners, 4 games, and 2 kayak trips   10 dinners, 5 games, and 2 kayak trips   20 dinners, 1 game, and 1 kayak trip   10 dinners, 2 games, and 2 kayak trips
3 .		Consider a simple budget constraint. If the price of the good on the vertical axis rises, then we would expect the slope of the budget constraint to:    get flatter.   get steeper   not change, but the budget constraint to shift inward.   not change, but the budget constraint to shift outward.
4 .		Which of the following statements is true regarding utility?    The total satisfaction one gets from one's consumption of a product is called marginal utility.   The total utility received from the consumption of a good is maximized when marginal utility is at a maximum.   According to the law of diminishing marginal utility, the more we consume of something, the smaller the total satisfaction received from that good.   When choosing between two goods, a rational consumer will choose the product that gives the greatest total utility per dollar.   If you buy one sandwich that gives you marginal utility of 400 and a second one that gives you marginal utility of 250, the total utility of eating two sandwiches is 650.
5 .		Generally speaking, if you consume less of something, your total utility will _____ and your marginal utility will _____.    rise, fall   fall, fall   fall, rise   rise, rise
6 .		When the price of Beanie Babies rose, Sal bought fewer of them. He said that the reason he bought fewer was because it was now a better investment for him to buy baseball cards. Sal's behavior reflects:    the substitution effect.   the income effect.   a violation of the law of demand.   diminishing marginal utility.
7 .		The consumer surplus in an entire market is:     the total value that consumers place on the good.   the total value of all sales in the market.   the total value that consumers place on the good less the price consumers pay.   the amount that the quantity supplied exceeds quantity demanded.
8 .		If the income effect dominates the substitution effect for the supply curve in the labor market, the labor supply curve will be:    flat.   vertical.   upward sloping.   downward sloping.