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

If the price elasticity of demand for a product is greater than 1, then

Table 4.4 -What is true of the consumer whose utility values are given in Table 4.4?

If the price elasticity of demand is -0.20, what will happen to quantity demanded when the price rises by 20 percent?

When there are a variety of substitute goods easily available, then demand for the good in question is relatively _________ elastic.

Which one of the following would make the demand for satellite subscription TV relatively less elastic?

The law of diminishing marginal utility asserts that total utility becomes negative when marginal utility begins to diminish.

When expenditures on the good in question are a relatively small portion of your income, then your demand for the good in question will be relatively _________ elastic.

When demand is perfectly inelastic,

If the price of movie admission declines and in response you attend twice as many movies as you would otherwise, then your expected marginal utility from the last movie you choose to see will be zero.

Utility is a term economists use to refer to

What happens to total consumer spending on a good when there is a price increase in the range in which demand is unit-elastic?

What happens to total consumer spending on a good when there is a price increase in the range in which demand is inelastic?

If your total utility in consuming 2 pieces of pizza is 25 utils and your total utility in consuming 3 pieces of pizza is 30 utils, what is the marginal utility provided by the third piece?

If the numeric value of elasticity is less than one, we say that demand for the good in question is _________.

What happens to total consumer spending on a good when there is a price decrease in the range in which demand is unit-elastic?

Table 4.5 -Using Table 4.5, diminishing marginal utility begins after the _____________ glass of water is consumed.

How does the time allowed for adjustment affect the price elasticity of demand for a good?

Economic theory asserts that

If an increase in price decreases total consumer expenditures on a good, then we know that the demand is _________ within that price range.

If the elasticity of demand for dry cleaning is -0.85 in the range between $3 and $2 per item, how will total consumer expenditures on dry cleaning be affected when dry cleaners lower prices from $3 to $2?