Question 1

Which of the following is an example of conspicuous consumption?

Accepted Answer

A)  Purchasing an expensive automobile to impress others 
B)  Avoiding cheap computers because low price indicates low quality 
C)  Purchasing of hip-hugger pants because pop stars wear them 
D)  Purchasing fast food because it is cheap and convenient 
A)  Purchasing an expensive automobile to impress others 
B)  Avoiding cheap computers because low price indicates low quality 
C)  Purchasing of hip-hugger pants because pop stars wear them 
D)  Purchasing fast food because it is cheap and convenient

Question 2

The consumption of an additional unit of a good provides additional satisfaction, which is called:

Accepted Answer

A)  total benefit. 
B)  marginal social benefit. 
C)  average utility. 
D)  marginal utility. 
A)  total benefit. 
B)  marginal social benefit. 
C)  average utility. 
D)  marginal utility.

Question 3

According to the principle of rational choice, if there is diminishing marginal utility:

Accepted Answer

A)  and the price received for supplying a good goes up, you supply less of that good. 
B)  and the price received for supplying a good goes up, you supply more of that good. 
C)  the decision producers face about how much to supply is not affected. 
D)  after a certain point, even if the price goes up, you don't supply more of that good. 
A)  and the price received for supplying a good goes up, you supply less of that good. 
B)  and the price received for supplying a good goes up, you supply more of that good. 
C)  the decision producers face about how much to supply is not affected. 
D)  after a certain point, even if the price goes up, you don't supply more of that good.

Question 4

Refer to the following figure.   Geri likes avocados; each additional avocado she consumes adds as much to her total utility as did the previous one. Which of the four graphs best represents Geri's marginal utility curve for avocados?

Accepted Answer

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

Question 5

As a consumer moves along an indifference curve:

Accepted Answer

A)  prices are held constant, but the consumer's budget changes. 
B)  the consumer's budget is held constant, but prices change. 
C)  prices and the consumer's budget are held constant, but total utility changes. 
D)  total utility is held constant, but prices, quantities, and the consumer's budget may change. 
A)  prices are held constant, but the consumer's budget changes. 
B)  the consumer's budget is held constant, but prices change. 
C)  prices and the consumer's budget are held constant, but total utility changes. 
D)  total utility is held constant, but prices, quantities, and the consumer's budget may change.

Question 6

Popeye cannot eat enough free spinach. With this information, we know that Popeye's:

Accepted Answer

A)  marginal utility for spinach never falls. 
B)  total utility for spinach is always rising. 
C)  total utility for spinach is falling. 
D)  marginal utility for spinach is falling. 
A)  marginal utility for spinach never falls. 
B)  total utility for spinach is always rising. 
C)  total utility for spinach is falling. 
D)  marginal utility for spinach is falling.

Question 7

Which of the following is an example of a focal point equilibrium?

Accepted Answer

A)  Purchase of an expensive automobile no one else owns to impress others 
B)  Avoidance of cheap computers because low price indicates low quality 
C)  Purchase of hip-hugger pants because pop stars wear them 
D)  Purchase of fast food because it is cheap and convenient 
A)  Purchase of an expensive automobile no one else owns to impress others 
B)  Avoidance of cheap computers because low price indicates low quality 
C)  Purchase of hip-hugger pants because pop stars wear them 
D)  Purchase of fast food because it is cheap and convenient

Question 8

Joseph Gallo poured two glasses of wine from the same bottle but put a more expensive price tag on one glass than on the other. He let people test both and asked them which they wanted, and most wanted the more expensive glass, not knowing that both had come from the same bottle. This result indicates that firms should:

Accepted Answer

A)  be careful about lowering the price of their product, because consumers may assume that a lower price means lower quality. 
B)  be careful about raising the price of their product, because the law of demand is always valid. 
C)  never lower the price of their product. 
D)  always raise the price of their product. 
A)  be careful about lowering the price of their product, because consumers may assume that a lower price means lower quality. 
B)  be careful about raising the price of their product, because the law of demand is always valid. 
C)  never lower the price of their product. 
D)  always raise the price of their product.

Question 9

If the price of one Weight Watchers frozen dinner is $2 and the price of one dozen jelly doughnuts is $1, which of the following would Kent, a utility-maximizing consumer, buy with his $6?

Accepted Answer

A)  3 frozen dinners 
B)  2 frozen dinners and 2 dozen jelly doughnuts 
C)  1 frozen dinner and 4 dozen jelly doughnuts 
D)  6 dozen jelly doughnuts 
A)  3 frozen dinners 
B)  2 frozen dinners and 2 dozen jelly doughnuts 
C)  1 frozen dinner and 4 dozen jelly doughnuts 
D)  6 dozen jelly doughnuts

Question 10

Total utility refers to the:

Accepted Answer

A)  total satisfaction one gets from the consumption of a product. 
B)  satisfaction one gets from the consumption of an additional unit of a product. 
C)  maximum satisfaction one can get from the consumption of a good. 
D)  satisfaction one gets from the consumption of an additional unit of a product times its price. 
A)  total satisfaction one gets from the consumption of a product. 
B)  satisfaction one gets from the consumption of an additional unit of a product. 
C)  maximum satisfaction one can get from the consumption of a good. 
D)  satisfaction one gets from the consumption of an additional unit of a product times its price.

Question 11

Refer to the graphs shown, which show indifference curve analysis with the associated demand curves.   The effect of a decrease in the price of X is shown by the movements from:

Accepted Answer

A)  A to B, D to E, or F to G. 
B)  A to B, D to F, or E to G. 
C)  B to C, D to F, or E to G. 
D)  B to C, D to E, or F to G. 
A)  A to B, D to E, or F to G. 
B)  A to B, D to F, or E to G. 
C)  B to C, D to F, or E to G. 
D)  B to C, D to E, or F to G.

Question 12

Refer to the graphs shown, which show indifference curve analysis with the associated demand curves.   The best explanation for a movement from point D to point E is:

Accepted Answer

A)  an outward rotation of the budget constraint along the x-axis, allowing the consumer to move from point A to point B. 
B)  a parallel shift of the budget constraint, allowing the consumer to move from point A to point C. 
C)  an inward rotation of the budget constraint along the x-axis, forcing the consumer to move from point B to point A. 
D)  an inward rotation of the budget constraint along the y-axis, forcing the consumer to move from point C to point B. 
A)  an outward rotation of the budget constraint along the x-axis, allowing the consumer to move from point A to point B. 
B)  a parallel shift of the budget constraint, allowing the consumer to move from point A to point C. 
C)  an inward rotation of the budget constraint along the x-axis, forcing the consumer to move from point B to point A. 
D)  an inward rotation of the budget constraint along the y-axis, forcing the consumer to move from point C to point B.

Question 13

Refer to the graph shown.   A consumer would be expected to change consumption from point A to point B in response to a(n):

Accepted Answer

A)  decrease in the price of carnival games. 
B)  decrease in the price of Ferris wheel rides. 
C)  increase in income. 
D)  decrease in income. 
A)  decrease in the price of carnival games. 
B)  decrease in the price of Ferris wheel rides. 
C)  increase in income. 
D)  decrease in income.

Question 14

Mary is maximizing utility by eating three pancakes and two eggs. The principle of rational choice says that if there is diminishing marginal utility and the price of eggs rises, Mary will choose to eat more pancakes and fewer eggs.

Accepted Answer

A) True 
 B)False

Which of the following is an example of conspicuous consumption?

The consumption of an additional unit of a good provides additional satisfaction, which is called:

According to the principle of rational choice, if there is diminishing marginal utility:

Refer to the following figure. Geri likes avocados; each additional avocado she consumes adds as much to her total utility as did the previous one. Which of the four graphs best represents Geri's marginal utility curve for avocados?

As a consumer moves along an indifference curve:

Popeye cannot eat enough free spinach. With this information, we know that Popeye's:

Which of the following is an example of a focal point equilibrium?

If the price of one Weight Watchers frozen dinner is $2 and the price of one dozen jelly doughnuts is $1, which of the following would Kent, a utility-maximizing consumer, buy with his $6?

Total utility refers to the:

Refer to the graphs shown, which show indifference curve analysis with the associated demand curves. The effect of a decrease in the price of X is shown by the movements from:

Refer to the graphs shown, which show indifference curve analysis with the associated demand curves. The best explanation for a movement from point D to point E is:

Refer to the graph shown. A consumer would be expected to change consumption from point A to point B in response to a(n):

Mary is maximizing utility by eating three pancakes and two eggs. The principle of rational choice says that if there is diminishing marginal utility and the price of eggs rises, Mary will choose to eat more pancakes and fewer eggs.

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters

Exam 19: The Logic of Individual Choice: the Foundation of Supply and Demand

Which of the following is an example of conspicuous consumption?

The consumption of an additional unit of a good provides additional satisfaction, which is called:

According to the principle of rational choice, if there is diminishing marginal utility:

Refer to the following figure. Geri likes avocados; each additional avocado she consumes adds as much to her total utility as did the previous one. Which of the four graphs best represents Geri's marginal utility curve for avocados?

As a consumer moves along an indifference curve:

Popeye cannot eat enough free spinach. With this information, we know that Popeye's:

Which of the following is an example of a focal point equilibrium?

If the price of one Weight Watchers frozen dinner is $2 and the price of one dozen jelly doughnuts is $1, which of the following would Kent, a utility-maximizing consumer, buy with his $6?

Total utility refers to the:

Refer to the graphs shown, which show indifference curve analysis with the associated demand curves. The effect of a decrease in the price of X is shown by the movements from:

Refer to the graphs shown, which show indifference curve analysis with the associated demand curves. The best explanation for a movement from point D to point E is:

Refer to the graph shown. A consumer would be expected to change consumption from point A to point B in response to a(n):

Mary is maximizing utility by eating three pancakes and two eggs. The principle of rational choice says that if there is diminishing marginal utility and the price of eggs rises, Mary will choose to eat more pancakes and fewer eggs.

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters