Tutorial Questions
ECON 130 tutorial questions
Tutorial 1 (week 3): Thinking like an economist.
MC1. Suppose Frieda is offered a free voucher that entitles her to one of the following: a movie, dinner at a restaurant, or a concert. Frieda values the movie at $15, dinner at $20 and the concert at $40. Frieda’s opportunity cost of going to dinner is: a) $15. b) $20. c) $40. d) $55.
Question 1. What are the essential elements of the basic competitive model?
Question 2. Consider a lake in a national park where everyone is allowed to fish as much as they want. What outcome would you predict? Might this problem be averted if the lake were privately owned and fishing licenses were sold?
Question 3. What is a model? Why do economists use models?
Tutorial 2 (week 4): Consumer choice.
MC1. Suppose consumption bundle A maximises Ben’s utility, subject to his budget constraint. Further, consumption bundle B gives Ben less utility than A. From this, we can infer that:
a) The cost of B is greater than Ben’s income.
b) The cost of B is less than Ben’s income.
c) The cost of B is equal to Ben’s income.
d) None of the above.
* Utility doesn’t necessarily correlate with cost
MC2. Suppose consumption bundle A maximises Dylan’s utility, subject to his budget constraint. Further, suppose that the cost of A is equal to Dylan’s income. An increase in income will:
a) Lower Dylan’s utility.
b) Raise Dylan’s utility.
c) Leave Dylan’s utility unchanged.
d) Not lower Dylan’s utility.
MC3. Suppose Ellen spends all her income on books and food. Following an increase in the price of books (with income fixed), Ellen consumes fewer books and less food. From this, we can infer that:
a) Books are normal goods, to Ellen.
b) Books are inferior goods, to Ellen.
c) Food is a normal good, to Ellen. Because the substitution effect saya it would rise
d) Food is an inferior good, to Ellen.
MC4. Suppose Gail is indifferent between consumption bundles A and B. Further,
Tutorial 1 (week 3): Thinking like an economist.
MC1. Suppose Frieda is offered a free voucher that entitles her to one of the following: a movie, dinner at a restaurant, or a concert. Frieda values the movie at $15, dinner at $20 and the concert at $40. Frieda’s opportunity cost of going to dinner is: a) $15. b) $20. c) $40. d) $55.
Question 1. What are the essential elements of the basic competitive model?
Question 2. Consider a lake in a national park where everyone is allowed to fish as much as they want. What outcome would you predict? Might this problem be averted if the lake were privately owned and fishing licenses were sold?
Question 3. What is a model? Why do economists use models?
Tutorial 2 (week 4): Consumer choice.
MC1. Suppose consumption bundle A maximises Ben’s utility, subject to his budget constraint. Further, consumption bundle B gives Ben less utility than A. From this, we can infer that:
a) The cost of B is greater than Ben’s income.
b) The cost of B is less than Ben’s income.
c) The cost of B is equal to Ben’s income.
d) None of the above.
* Utility doesn’t necessarily correlate with cost
MC2. Suppose consumption bundle A maximises Dylan’s utility, subject to his budget constraint. Further, suppose that the cost of A is equal to Dylan’s income. An increase in income will:
a) Lower Dylan’s utility.
b) Raise Dylan’s utility.
c) Leave Dylan’s utility unchanged.
d) Not lower Dylan’s utility.
MC3. Suppose Ellen spends all her income on books and food. Following an increase in the price of books (with income fixed), Ellen consumes fewer books and less food. From this, we can infer that:
a) Books are normal goods, to Ellen.
b) Books are inferior goods, to Ellen.
c) Food is a normal good, to Ellen. Because the substitution effect saya it would rise
d) Food is an inferior good, to Ellen.
MC4. Suppose Gail is indifferent between consumption bundles A and B. Further,