Marshall's Cardinal Analysis Quiz

Consumption behavior

Consumers' behavior

Very difficult

<p>Consumption behavior</p> Signup and view all the answers

<p>The income-consumption curve is a graph showing consumption bundles chosen at various income levels.</p> Signup and view all the answers

<p>The income effect is the change in consumption resulting from a change in real income. It can come from external sources or from income being freed up by a price change.</p> Signup and view all the answers

<p>The effect of a change in available income is depicted by the income-consumption curve as it shows the consumption bundles chosen at different income levels.</p> Signup and view all the answers

<p>The income-consumption curve is related to the substitution effect as they both influence consumer choices in response to changes in income and prices.</p> Signup and view all the answers

<p>The income effect reveals the change in quantity demanded brought by a change in real income.</p> Signup and view all the answers

<p>An increase in the money income of the consumer will shift the budget line outward parallel to itself.</p> Signup and view all the answers

<p>The income–consumption curve is the set of tangency points of indifference curves with the various budget constraint lines, with prices held constant, as income increases shifting the budget constraint out.</p> Signup and view all the answers

<p>For normal goods, the demand for the good increases as money income rises.</p> Signup and view all the answers

<p>The consumer's choice of bundle changes as the feasible set available to them changes with the increase in income.</p> Signup and view all the answers

<p>The consumer's preferences, monetary income, and prices play an important role in solving the consumer's optimization problem.</p> Signup and view all the answers

<p>The income effect reveals the change in quantity demanded brought by a change in real income.</p> Signup and view all the answers

<p>A fifty-percent decrease in the price of bread will increase the free money available to the consumer by the same amount.</p> Signup and view all the answers

<p>The comparative statics investigates the effects of changes in exogenous variables on the chosen values of the endogenous variables, revealing the impact of changes in prices and money incomes of the consumers.</p> Signup and view all the answers

<p>An inferior good is one for which demand decreases with a rise in income of the consumer.</p> Signup and view all the answers

<p>The optimal bundle is chosen by the consumer to maximize their utility subject to a budget constraint.</p> Signup and view all the answers

<p>A rise in income may lead to the demand for a good to rise, fall, or not change at all, depending on the preferences of the consumer.</p> Signup and view all the answers