Assessment 2: Attempt review https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=165
UNISA 2024 ECS2601-24-S1 Welcome Message Assessment 2
QUIZ
Started on Thursday, 28 March 2024, 8:54 PM
State Finished
Completed on Thursday, 28 March 2024, 10:43 PM
Time taken 1 hour 49 mins
Marks 17.00/20.00
Grade 85.00 out of 100.00
Question 1
Complete
Mark 1.00 out of 1.00
Suppose a consumer faces a rise in the price of product A while the consumer's
income remains unchanged. Which of the following statements about the income
effect is FALSE?
a. Between the income and substitution effects, the entire change in the
quantity demanded by the consumer is covered.
b. There is no income effect because the consumer's income is unchanged.
c. If the product is normal, the income effect works in the same direction as the
substitution effect.
d. If the product is inferior, the income effect works in the opposite direction to
the substitution effect.
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Question 2
Complete
Mark 1.00 out of 1.00
If good X consumes a large portion of the budget, a price increase of X…
a. has a very large substitution effect, because consumers cannot easily absorb
the expense of the price increase and so they substitute.
b. has a small income effect because the income effect is measured with
nominal income constant.
c. has a small substitution effect since large budget items have few
substitutes.
d. has a large income effect, because the consumer budget is heavily affected
by price increases in big-ticket items.
Question 3
Complete
Mark 1.00 out of 1.00
The magnitude of the subsitution effect and income effect in this graph reperesnts ...
a. Complement goods.
b. Normal good.
c. Inferior good.
d. Giffen Good.
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Question 4
Complete
Mark 1.00 out of 1.00
If two perfect complements, a keyboard and a computer, are being considered and
the price of the keyboard only is increased, then the substitution effect of the price
change will …
a. be negative because keyboards are inferior goods.
b. be negative because keyboards and computers are perfect substitutes.
c. be 0 because it is impractical to have more keyboards and fewer computers.
d. be positive because the consumer feels poorer.
Question 5
Complete
Mark 1.00 out of 1.00
Which of the following describes the Giffen good case? When the price of the good …
a. rises, the income effect is opposite to and greater than the substitution
effect, and
consumption falls.
b. falls, the income effect is in the same direction as the substitution effect, and
consumption rises.
c. falls, the income effect is in the opposite direction to the substitution effect,
and
consumption falls.
d. falls, the income effect is in the opposite direction to the substitution effect,
and
consumption rises.
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Question 6
Complete
Mark 1.00 out of 1.00
Assume that juice is a normal good. If the price of juice rises, then the substitution
effect results in the person buying … of the good, and the income effect results in the
person buying … of the good.
a. more, less
b. less, more
c. less, less
d. more, more
Question 7
Complete
Mark 0.00 out of 1.00
The substitution effect of a price decrease for a good with a normal indifference
curve pattern …
a. is always inversely related to the price change.
b. is measured by the horizontal distance between the original and the new
indifference curves.
c. measures the change in consumption of the good that is due to the
consumer’s feeling of being richer.
d. is su�cient information to plot an ordinary demand curve for the commodity
being considered.
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