Macroeconomics > EXAM > MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the questio (All)

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. | Attached mark scheme at the end of the document

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1) A utility function A) captures the maximum satisfaction of consumers. B) is useful only in microeconomics, not macroeconomics. C) captures the preferences of the representative household over co... nsumption and leisure goods. D) is a stand-in for a more complicated function. E) captures the representative firm's ability to produce goods and services. 1) 2) A consumption bundle A) is a particular combination of consumption and leisure. B) is a particular combination of work and leisure. C) measures the quality of a particular good. D) only measures a quantity of goods and services, but not the amount of leisure. E) is a method of bringing home consumption goods. 2) 3) A utility function A) needs to measure relative amounts of happiness for a single individual. B) is most useful if it can be influenced by others. C) measures relative happiness and income of consumers. D) needs to measure the absolute level of happiness. E) helps compare the relative happiness of two separate consumers. 3) 4) The preferences of the representative consumer over consumption and leisure are represented by use of a A) benefit function. B) production function. C) dynamic function. D) utility function. E) preference function. 4) 5) We assume that the representative consumer's preferences exhibit the properties that A) less consumption is preferred to more leisure and that consumption and leisure are both normal goods. B) more is sometimes preferred to less and that consumption and leisure are both normal goods. C) the consumer likes diversity and that more is sometimes preferred to less. D) more is preferred to less and that the consumer prefers diversity. E) they evolve over time and that more is always preferred to less. 5) 6) "More is always preferred to less" refers to A) more consumption and less leisure. B) choices between consumption and work. C) choices between happiness and utility. D) choices between work and leisure. E) choices between consumption and leisure. [Show More]

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