ESFM2-L1 Score:
1.    Maria consumes only goods A and B. Her budget line depends on all following
variables except for
A the price of good A.
B amount of money she can spend on goods A and B.
C the price of good B.
D her preferences between goods A and B.
E Depends on all the above-listed variables.
2.    Let's have a linear budget line in a graph with the quantity of good 1 on the
horizontal and quantity of good 2 on the vertical axis. If price of good 1 falls and
price of good 2 increases,
A the budget line becomes flatter.
B the budget line becomes steeper.
C the budget line will make a parallel move downwards.
D the budget line will make a parallel move upwards.
3.    If the slope of the indifference curve in every point is -5, we know that
A one of the goods is bad.
B the goods are perfect complements.
C the goods are perfect substitutes.
D we are not able to choose any of the answers above.
4.    Let's have a good on a horizontal axis and a bad on a vertical axis. Then moving
to southeast (down and right) will
A increase utility of the consumer.
B reduce utility of the consumer.
C not change utility of the consumer.
D We cannot determine what happens with the utility.
5.    A positively sloped indifference curve violates the assumption of
A monotonicity.
B konvexity.
C completeness.
D transitivity.
E reflexivity.
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6.    During his stay in Brno, Roger consumers only pivo P and víno V. He is willing to
exchange beer and wine at a constant rate 1 liter of wine for 3 liters of beer. What
of the following may be his utility function?
A u(P,V) = P + V
B u(P,V) = 3P + V
C u(P,V) = P + V/3
D u(P,V) = P/3 + V
E u(P,V) = P/3 + V/9
7.    Mark's preferences for music are rational. He strictly prefers ACDC (A) to Beatles
(B) and Beatles (B) to Cher (C). Which of the following utility functions describes his
preferences?
A U(A) = 6, U(B) = -6, U(C) = 9
B U(A) = 6, U(B) = -6, U(C) = -9
C U(A) = 10, U(B) = 6, U(C) = 9
D U(A) = 1, U(B) = -3, U(C) = 4
E U(A) = 0, U(B) = 0, U(C) = 0
8.    If we make a monotonic transformation of a utility function, then
A the shape of the indifference curves changes.
B marginal rate of substitution does not change.
C marginal utility does not change.
D the shape of the budget line changes.
E More than one of the above answers are correct.
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