Question 1

Rosa is willing to pay $200 for the iPhone,but the actual price is $400.This means

Accepted Answer

A) Rosa will enjoy a consumer surplus of $200 if she buys the iPhone. 
B) Rosa will not buy an iPhone. 
C) Rosa will buy this product but will not receive any consumer surplus. 
D) The iPhone is overpriced. 
A) Rosa will enjoy a consumer surplus of $200 if she buys the iPhone. 
B) Rosa will not buy an iPhone. 
C) Rosa will buy this product but will not receive any consumer surplus. 
D) The iPhone is overpriced.

Question 2

Evaluating a supply and a demand curve independently,if the equilibrium price rises,

Accepted Answer

A) The consumer surplus will fall. 
B) The producer surplus will fall. 
C) The consumer surplus will increase. 
D) The producer surplus will increase. 
A) The consumer surplus will fall. 
B) The producer surplus will fall. 
C) The consumer surplus will increase. 
D) The producer surplus will increase.

Question 3

Use the law of diminishing utility to explain why a demand curve is typically downward-sloping.

Accepted Answer

The greater the quantity of a good that

Question 4

Refer to Figure 19.1.Ben's consumer surplus is equal to

Accepted Answer

A) $50. 
B) $100. 
C) $200. 
D) $0. 
A) $50. 
B) $100. 
C) $200. 
D) $0.

Question 5

When sellers price discriminate,

Accepted Answer

A) They are attempting to charge a price that is the maximum price each individual is willing to pay. 
B) They are trying to pit one group of buyers against another. 
C) They are trying to find a minimum price the individual is willing to pay. 
D) They are taking an illegal action. 
A) They are attempting to charge a price that is the maximum price each individual is willing to pay. 
B) They are trying to pit one group of buyers against another. 
C) They are trying to find a minimum price the individual is willing to pay. 
D) They are taking an illegal action.

Question 6

Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Table 19.3
Michael's Utility Schedule
$\begin{array} { | c | r | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Units of } \
\text { Cola }
\end{array} & \text { TU of Cola } & \begin{array} { c } 
\text { MU of } \
\text { Cola }
\end{array} & \begin{array} { c } 
\text { Units of } \
\text { Pretzels }
\end{array} & \begin{array} { c } 
\text { TU of } \
\text { Pretzels }
\end{array} & \begin{array} { c } 
\text { MU of } \
\text { Pretzels }
\end{array} \
\hline 1 & 40 & 40 & 1 & 30 & 30 \
\hline 2 & & 32 & 2 & & 20 \
\hline 3 & 96 & 24 & 3 & 66 & 16 \
\hline 4 & 112 & & 4 & 78 & \
\hline 5 & 124 & & 5 & 84 & \
\hline
\end{array}$ Refer to Table 19.3.If Michael has $48 to spend on cola and pretzels,what combination should he purchase in order to maximize his utility?

Accepted Answer

A) Four colas and four pretzels. 
B) Five colas and two pretzels. 
C) Three colas and five pretzels. 
D) Five colas and five pretzels. 
A) Four colas and four pretzels. 
B) Five colas and two pretzels. 
C) Three colas and five pretzels. 
D) Five colas and five pretzels.

Question 7

Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Table 19.3
Michael's Utility Schedule
$\begin{array} { | c | r | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Units of } \
\text { Cola }
\end{array} & \text { TU of Cola } & \begin{array} { c } 
\text { MU of } \
\text { Cola }
\end{array} & \begin{array} { c } 
\text { Units of } \
\text { Pretzels }
\end{array} & \begin{array} { c } 
\text { TU of } \
\text { Pretzels }
\end{array} & \begin{array} { c } 
\text { MU of } \
\text { Pretzels }
\end{array} \
\hline 1 & 40& 40 & 1 & 30 & 30 \
\hline 2 & & 32 & 2 & & 20 \
\hline 3 & 96 & 24 & 3 & 66 & 16 \
\hline 4 & 112 & & 4 & 78 & \
\hline 5 & 124 & & 5 & 84 & \
\hline
\end{array}$ Refer to Table 19.3.If Michael has $40 to spend on cola and pretzels,what is his maximum utility possible?

Accepted Answer

A) 40. 
B) 174. 
C) 190. 
D) 208. 
A) 40. 
B) 174. 
C) 190. 
D) 208.

Question 8

If Josh's income increases,then

Accepted Answer

A) His entire budget constraint will shift toward the origin. 
B) His entire budget constraint will shift away from the origin. 
C) His indifference curves will shift away from the origin. 
D) One end of his budget constraint will move away from the origin. 
A) His entire budget constraint will shift toward the origin. 
B) His entire budget constraint will shift away from the origin. 
C) His indifference curves will shift away from the origin. 
D) One end of his budget constraint will move away from the origin.

Question 9

The marginal utility for a good is computed as

Accepted Answer

A) Total utility divided by quantity. 
B) Quantity divided by total utility. 
C) The change in quantity divided by total utility. 
D) The change in total utility divided by the change in quantity. 
A) Total utility divided by quantity. 
B) Quantity divided by total utility. 
C) The change in quantity divided by total utility. 
D) The change in total utility divided by the change in quantity.

Question 10

The total consumer surplus is shown on a graph as

Accepted Answer

A) The area under the demand curve and below the actual price. 
B) The area under the demand curve and above the actual price. 
C) The area above the demand curve and above the actual price. 
D) The area above the demand curve and below the actual price. 
A) The area under the demand curve and below the actual price. 
B) The area under the demand curve and above the actual price. 
C) The area above the demand curve and above the actual price. 
D) The area above the demand curve and below the actual price.

Question 11

Which industry here is unlikely to exhibit price discrimination?

Accepted Answer

A) Airlines. 
B) New cars. 
C) Supermarkets. 
D) Colleges. 
A) Airlines. 
B) New cars. 
C) Supermarkets. 
D) Colleges.

Question 12

Jose goes to an all-you-can-eat buffet at a Chinese restaurant and consumes three plates of food.He does not go back for a fourth plate of food because

Accepted Answer

A) The price of the fourth plate is too high. 
B) He has reached the point of increasing marginal utility. 
C) The marginal utility of the fourth plate would no longer be positive. 
D) His total utility would increase with the fourth plate of food. 
A) The price of the fourth plate is too high. 
B) He has reached the point of increasing marginal utility. 
C) The marginal utility of the fourth plate would no longer be positive. 
D) His total utility would increase with the fourth plate of food.

Question 13

The market demand for a product is

Accepted Answer

A) The sum of all of the markets in the area. 
B) The sum of all of the marginal utilities among consumers. 
C) The total utility received for a good by all consumers in the market. 
D) The sum of all of the individual demands for that product. 
A) The sum of all of the markets in the area. 
B) The sum of all of the marginal utilities among consumers. 
C) The total utility received for a good by all consumers in the market. 
D) The sum of all of the individual demands for that product.

Question 14

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.If the price per unit of good X is $3,the consumer would maximize utility at point

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 15

All consumers in the market enjoy a consumer surplus.

Accepted Answer

A) True 
 B)False

Question 16

The rational consumer chooses a combination of two goods that is on the budget constraint and is tangent to the highest indifference curve possible.

Accepted Answer

A) True 
 B)False

Question 17

Sellers can increase total revenues by charging different individuals the maximum amount they are willing to pay.

Accepted Answer

A) True 
 B)False

Question 18

The benefit that consumers get when they buy goods at the equilibrium price but were willing to pay more is called

Accepted Answer

A) Marginal utility. 
B) The law of demand. 
C) Consumer surplus. 
D) Maximum price. 
A) Marginal utility. 
B) The law of demand. 
C) Consumer surplus. 
D) Maximum price.

Question 19

Refer to Figure 19.2.The total utility of two apples is

Accepted Answer

A) 2 utils. 
B) 5 utils. 
C) 6 utils. 
D) 11 utils. 
A) 2 utils. 
B) 5 utils. 
C) 6 utils. 
D) 11 utils.

Question 20

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.If the price per unit of good X is $1,the consumer would maximize utility by consuming

Accepted Answer

A) 25 units of Y. 
B) 21 units of Y. 
C) 15 units of Y. 
D) 10 units of Y. 
A) 25 units of Y. 
B) 21 units of Y. 
C) 15 units of Y. 
D) 10 units of Y.

Exam 19: Consumer Choice

Rosa is willing to pay $200 for the iPhone,but the actual price is $400.This means

Evaluating a supply and a demand curve independently,if the equilibrium price rises,

Use the law of diminishing utility to explain why a demand curve is typically downward-sloping.

Refer to Figure 19.1.Ben's consumer surplus is equal to

When sellers price discriminate,

If Josh's income increases,then

The marginal utility for a good is computed as

The total consumer surplus is shown on a graph as

Which industry here is unlikely to exhibit price discrimination?

Jose goes to an all-you-can-eat buffet at a Chinese restaurant and consumes three plates of food.He does not go back for a fourth plate of food because

The market demand for a product is

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.If the price per unit of good X is $3,the consumer would maximize utility at point

All consumers in the market enjoy a consumer surplus.

The rational consumer chooses a combination of two goods that is on the budget constraint and is tangent to the highest indifference curve possible.

Sellers can increase total revenues by charging different individuals the maximum amount they are willing to pay.

The benefit that consumers get when they buy goods at the equilibrium price but were willing to pay more is called

Refer to Figure 19.2.The total utility of two apples is

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.If the price per unit of good X is $1,the consumer would maximize utility by consuming

Economics: the Core Issues

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Theory Versus Reality

Elasticity

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The Competitive Firm

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Natural Monopolies: Deregulation

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