Question 1

When marginal utility is negative, total utility declines.

Accepted Answer

A) True 
 B)False  True

Question 2

If the price elasticity of demand is -0.80, how much of a price increase is needed in order to generate a 10 percent reduction in quantity demanded?

Accepted Answer

A 12.5 percent increase

Question 3

A demand curve reflecting a perfectly inelastic demand is _________.

Accepted Answer

vertical

Question 4

What happens to total utility when marginal utility becomes negative?

Accepted Answer

Total util

Question 5

Which one of the following statements is TRUE?

Accepted Answer

A)  The law of diminishing marginal utility does not apply to fashion items that are relatively new on the market. 
B)  The law of diminishing marginal utility does not apply to expensive items, such as cars, houses, and exotic vacations. 
C)  Consumers consider the expected marginal utility from a good in deciding whether to buy it. 
D)  Consumers will only buy goods which are not subject to diminishing marginal utility. 
A)  The law of diminishing marginal utility does not apply to fashion items that are relatively new on the market. 
B)  The law of diminishing marginal utility does not apply to expensive items, such as cars, houses, and exotic vacations. 
C)  Consumers consider the expected marginal utility from a good in deciding whether to buy it. 
D)  Consumers will only buy goods which are not subject to diminishing marginal utility.

Question 6

What economic concept explains why newspaper vending machines allow a consumer access to the entire inventory of newspapers, yet soft drink vending machines dispense only one drink at a time?

Accepted Answer

The concep

Question 7

The price elasticity of demand becomes relatively greater as more substitutes are easily available.

Accepted Answer

A) True 
 B)False

Question 8

Total utility derived from consuming one good declines when

Accepted Answer

A)  marginal utility is positive. 
B)  marginal utility is negative. 
C)  there is an opportunity cost associated with consuming more of the good. 
D)  the consumer receives a discounted price for the good. 
A)  marginal utility is positive. 
B)  marginal utility is negative. 
C)  there is an opportunity cost associated with consuming more of the good. 
D)  the consumer receives a discounted price for the good.

Question 9

If a 4 percent decrease in price leads to a 1 percent increase in quantity demanded, then the price elasticity of demand is _________.

Accepted Answer

The answer of If a 4 percent decrease in price...

Question 10

Table 4.6
  
-According to the data in Table 4.6, what is the elasticity of demand between a price of $12 and a price of $8?

Accepted Answer

A)  0.36 
B)  0.63 
C)  0.75 
D)  0.90 
A)  0.36 
B)  0.63 
C)  0.75 
D)  0.90

Question 11

What situation would make the demand for new housing relatively more price elastic?

Accepted Answer

A)  Construction firms have a difficult time finding experienced carpenters. 
B)  Home buyers are prosperous, and they don't feel constrained by financial limits. 
C)  There is a plentiful stock of desirable pre-existing homes. 
D)  Apartment rents are at an all-time high. 
A)  Construction firms have a difficult time finding experienced carpenters. 
B)  Home buyers are prosperous, and they don't feel constrained by financial limits. 
C)  There is a plentiful stock of desirable pre-existing homes. 
D)  Apartment rents are at an all-time high.

Question 12

Table 4.4
  
-According to Table 4.4, what is the total utility when four CDs are purchased?

Accepted Answer

A)  220 
B)  150 
C)  135 
D)  44 
A)  220 
B)  150 
C)  135 
D)  44

Question 13

Price elasticity of demand is the responsiveness

Accepted Answer

A)  of the quantity demanded to changes in price. 
B)  of the quantity demanded to changes in supply. 
C)  of the quantity demanded to changes in income. 
D)  of the quantity demanded to changes in quantity. 
A)  of the quantity demanded to changes in price. 
B)  of the quantity demanded to changes in supply. 
C)  of the quantity demanded to changes in income. 
D)  of the quantity demanded to changes in quantity.

Question 14

If the price elasticity of demand is -0.75, how will total consumer expenditures on the good be affected in response to a price decrease?

Accepted Answer

Total spen

Question 15

What is held constant as we measure the price elasticity of demand?

Accepted Answer

A)  The income level of the consumer. 
B)  The price of the good in question. 
C)  The quantity demanded of the good in question. 
D)  The utility level of the consumer. 
A)  The income level of the consumer. 
B)  The price of the good in question. 
C)  The quantity demanded of the good in question. 
D)  The utility level of the consumer.

Question 16

Generally, toothpaste is a small part of a consumer's income and is a necessity. Therefore, the demand for toothpaste

Accepted Answer

A)  is elastic. 
B)  is inelastic. 
C)  is unit-elastic. 
D)  is perfectly elastic. 
A)  is elastic. 
B)  is inelastic. 
C)  is unit-elastic. 
D)  is perfectly elastic.

Question 17

The price elasticity of demand is calculated using information on

Accepted Answer

A)  costs and wages. 
B)  prices and quantities. 
C)  taxes and prices. 
D)  income and prices. 
A)  costs and wages. 
B)  prices and quantities. 
C)  taxes and prices. 
D)  income and prices.

Question 18

If a 7 percent decrease in price leads to a 7 percent increase in quantity demanded, then the price elasticity of demand is _________.

Accepted Answer

The answer of If a 7 percent decrease in price...

Question 19

The price elasticity of demand measures

Accepted Answer

A)  changes in production cost in response to changes in technology. 
B)  changes in the cost of production in response to changes in the number of customers. 
C)  changes in the quantity demanded in response to changes in price. 
D)  changes in the price in response to changes in quantity demanded. 
A)  changes in production cost in response to changes in technology. 
B)  changes in the cost of production in response to changes in the number of customers. 
C)  changes in the quantity demanded in response to changes in price. 
D)  changes in the price in response to changes in quantity demanded.

Question 20

A rational consumer will

Accepted Answer

A)  consider the price of a good as part of his purchase decision. 
B)  buy all those goods which provide a positive level of utility. 
C)  spend all of his income on one good. 
D)  ignore opportunity costs. 
A)  consider the price of a good as part of his purchase decision. 
B)  buy all those goods which provide a positive level of utility. 
C)  spend all of his income on one good. 
D)  ignore opportunity costs.

When marginal utility is negative, total utility declines.

If the price elasticity of demand is -0.80, how much of a price increase is needed in order to generate a 10 percent reduction in quantity demanded?

A demand curve reflecting a perfectly inelastic demand is _________.

What happens to total utility when marginal utility becomes negative?

Which one of the following statements is TRUE?

What economic concept explains why newspaper vending machines allow a consumer access to the entire inventory of newspapers, yet soft drink vending machines dispense only one drink at a time?

The price elasticity of demand becomes relatively greater as more substitutes are easily available.

Total utility derived from consuming one good declines when

If a 4 percent decrease in price leads to a 1 percent increase in quantity demanded, then the price elasticity of demand is _________.

Table 4.6 -According to the data in Table 4.6, what is the elasticity of demand between a price of $12 and a price of $8?

What situation would make the demand for new housing relatively more price elastic?

Table 4.4 -According to Table 4.4, what is the total utility when four CDs are purchased?

Price elasticity of demand is the responsiveness

If the price elasticity of demand is -0.75, how will total consumer expenditures on the good be affected in response to a price decrease?

What is held constant as we measure the price elasticity of demand?

Generally, toothpaste is a small part of a consumer's income and is a necessity. Therefore, the demand for toothpaste

The price elasticity of demand is calculated using information on

If a 7 percent decrease in price leads to a 7 percent increase in quantity demanded, then the price elasticity of demand is _________.

The price elasticity of demand measures

A rational consumer will

Economics and the World of Scarcity

The United States Within the World Economy

Demand and Supply

The Firm: Production and Cost

The Two Extremes: Perfect Competition and Pure Monopoly

In Between the Extremes: Imperfect Competition

Market and Government Failures

Labor Economics

Unemployment, Inflation, and the Business Cycle

Aggregate Demand and Supply

The Fiscal Policy Approach to Stabilization

Money and Our Banking System

The Monetary Policy Approach to Stabilization

How Economies Grow

Trading With Other Nations

Financing World Trade

Filters

Exam 4: Consumer Decision Making and Consumer Reaction to Price Changes

When marginal utility is negative, total utility declines.

If the price elasticity of demand is -0.80, how much of a price increase is needed in order to generate a 10 percent reduction in quantity demanded?

A demand curve reflecting a perfectly inelastic demand is _________.

What happens to total utility when marginal utility becomes negative?

Which one of the following statements is TRUE?

What economic concept explains why newspaper vending machines allow a consumer access to the entire inventory of newspapers, yet soft drink vending machines dispense only one drink at a time?

The price elasticity of demand becomes relatively greater as more substitutes are easily available.

Total utility derived from consuming one good declines when

If a 4 percent decrease in price leads to a 1 percent increase in quantity demanded, then the price elasticity of demand is _________.

Table 4.6 -According to the data in Table 4.6, what is the elasticity of demand between a price of $12 and a price of $8?

What situation would make the demand for new housing relatively more price elastic?

Table 4.4 -According to Table 4.4, what is the total utility when four CDs are purchased?

Price elasticity of demand is the responsiveness

If the price elasticity of demand is -0.75, how will total consumer expenditures on the good be affected in response to a price decrease?

What is held constant as we measure the price elasticity of demand?

Generally, toothpaste is a small part of a consumer's income and is a necessity. Therefore, the demand for toothpaste

The price elasticity of demand is calculated using information on

If a 7 percent decrease in price leads to a 7 percent increase in quantity demanded, then the price elasticity of demand is _________.

The price elasticity of demand measures

A rational consumer will

Economics and the World of Scarcity

The United States Within the World Economy

Demand and Supply

The Firm: Production and Cost

The Two Extremes: Perfect Competition and Pure Monopoly

In Between the Extremes: Imperfect Competition

Market and Government Failures

Labor Economics

Unemployment, Inflation, and the Business Cycle

Aggregate Demand and Supply

The Fiscal Policy Approach to Stabilization

Money and Our Banking System

The Monetary Policy Approach to Stabilization

How Economies Grow

Trading With Other Nations

Financing World Trade

Filters