Introduction. The problems in this chapter examine some variations on the apartment market described in the text. In most of the problems we work with the true demand curve constructed from the reservation prices of the consumers rather than the “smoothed” demand curve that we used in the text
2.1 If there are two goods with positive prices and the price of one good is reduced, while income and other prices remain constant, then the size of the budget set is reduced. Topic: Budget Constraint Diculty: 1 % Correct Responses: 76 Discrimination Index: 24 Correct Answer: False