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ECONOMICS 200 WEB QUIZ #1 CONSUMER THEORY – THE BASICS

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ECONOMICS 200 WEB QUIZ #1 CONSUMER THEORY – THE BASICS

Question 1 of 3

1

The assumption that preferences are complete requires the consumer

Select one of the following:

  • to rank any two baskets

  • to say that basket C is preferred to basket A if basket B is preferred to basket A and basket C is preferred to basket B

  • to rank a basket with more units of all goods higher than a basket with fewer units of all goods

  • to have a diminishing marginal rate of substitution

Explanation

Question 2 of 3

1

Irena likes Rajiv twice as much as she likes Royston. This is an example of

Select one of the following:

  • ordinal preferences

  • cardinal preferences

  • transitivity

  • diminishing marginal utility

Explanation

Question 3 of 3

1

Identify the truthfulness of the following statements. I. Ordinal utility gives us information about which basket the consumer prefers and quantitative information about the intensity of the preference. II. Cardinal utility gives us information about which basket the consumer prefers but not about the intensity of those preferences.

Select one of the following:

  • Both I and II are true

  • Both I and II are false

  • I is true; II is false

  • I is false; II is true

Explanation

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