Question 1

What consumption patterns would you observe if goods were characterized by increasing marginal utility?

Accepted Answer

People wou

Question 2

Since utility cannot be measured, why do economists use it as a concept?

Accepted Answer

To construct a theor

Question 3

If the elasticity of demand for paperback books is -1.7 in the range between $6 and $8, what happens to total consumer expenditures on paperback books when the price rises from $6 to $8?

Accepted Answer

A)  Total consumer expenditures will increase. 
B)  Total consumer expenditures will decrease. 
C)  Total consumer expenditures will remain unchanged. 
D)  We cannot determine what will happen to total consumer expenditures unless we also know something about the publishers' costs. 
A)  Total consumer expenditures will increase. 
B)  Total consumer expenditures will decrease. 
C)  Total consumer expenditures will remain unchanged. 
D)  We cannot determine what will happen to total consumer expenditures unless we also know something about the publishers' costs.

Question 4

Which one of the following is TRUE?

Accepted Answer

A)  The relative elasticity of demand decreases as the number of available substitutes increases. 
B)  Items that take up a small portion of your budget will have a fairly elastic demand. 
C)  The long-run elasticity of demand for an item will be greater than the short-run elasticity. 
D)  The demand for items that are labor-intensive in their production methods will be fairly elastic. 
A)  The relative elasticity of demand decreases as the number of available substitutes increases. 
B)  Items that take up a small portion of your budget will have a fairly elastic demand. 
C)  The long-run elasticity of demand for an item will be greater than the short-run elasticity. 
D)  The demand for items that are labor-intensive in their production methods will be fairly elastic.

Question 5

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

Accepted Answer

The answer of If the numeric value of elasticity is...

Question 6

Which one of the following is NOT a determinant of the price elasticity of demand?

Accepted Answer

A)  The number and availability of substitutes 
B)  The relative importance of this item in the consumer's overall budget 
C)  The time frame allowed for adjustment 
D)  The state of technology used in producing the good 
A)  The number and availability of substitutes 
B)  The relative importance of this item in the consumer's overall budget 
C)  The time frame allowed for adjustment 
D)  The state of technology used in producing the good

Question 7

An electric utility announced an increase in rates for residential customers. The announcement contained a statement saying that customers could conserve their energy usage and likely would not see any increase in their total monthly electric bill. What is the implication of this statement?

Accepted Answer

A)  That the demand for electricity is perfectly elastic. 
B)  That the demand for electricity is elastic within the range of the rate increase. 
C)  That the demand for electricity is inelastic within the range of the rate increase. 
D)  That the demand for electricity is unit-elastic within the range of the rate increase. 
A)  That the demand for electricity is perfectly elastic. 
B)  That the demand for electricity is elastic within the range of the rate increase. 
C)  That the demand for electricity is inelastic within the range of the rate increase. 
D)  That the demand for electricity is unit-elastic within the range of the rate increase.

Question 8

If the price elasticity of demand is -1.00, how much of a price decrease is needed in order for quantity demanded to rise by 15 percent?

Accepted Answer

A 15 perce

Question 9

If your total utility in consuming 3 glasses of root beer is 53 utils, and the marginal utility of the fourth glass is 7 utils, what would be the total utility of consuming four glasses?

Accepted Answer

The answer of If your total utility in consuming 3...

Question 10

What do you have to know in order to calculate the price elasticity of demand?

Accepted Answer

A)  How many consumers would like to buy the good but don't because of the price 
B)  How much was spent on advertising for the good 
C)  How much marginal utility the average consumer derives from the good 
D)  How much of the good was purchased at each of two different prices 
A)  How many consumers would like to buy the good but don't because of the price 
B)  How much was spent on advertising for the good 
C)  How much marginal utility the average consumer derives from the good 
D)  How much of the good was purchased at each of two different prices

Question 11

Marginal utility

Accepted Answer

A)  is the change in total utility due to a one-unit change in the consumption of a good or service. 
B)  refers to the satisfaction a consumer gets from finding a low price for a good he desires. 
C)  will be negative as long as the consumer has to pay for the good. 
D)  is the total satisfaction derived from the consumption of a given quantity of a good or service. 
A)  is the change in total utility due to a one-unit change in the consumption of a good or service. 
B)  refers to the satisfaction a consumer gets from finding a low price for a good he desires. 
C)  will be negative as long as the consumer has to pay for the good. 
D)  is the total satisfaction derived from the consumption of a given quantity of a good or service.

Question 12

Marginal utility is the

Accepted Answer

A)  total satisfaction gained from consuming goods or services. 
B)  additional satisfaction from consuming one more unit of a good or service. 
C)  additional profit gained from consuming a good or service. 
D)  total value from consuming goods or services. 
A)  total satisfaction gained from consuming goods or services. 
B)  additional satisfaction from consuming one more unit of a good or service. 
C)  additional profit gained from consuming a good or service. 
D)  total value from consuming goods or services.

Question 13

How does the price elasticity of demand for a good depend on the proportion of the consumer's budget devoted to expenditures on that good?

Accepted Answer

Goods that make up a large por

Question 14

The law of diminishing marginal utility

Accepted Answer

A)  asserts that you become worse off as you consume more. 
B)  explains why you buy more of one good as its price declines. 
C)  does not apply to luxury goods. 
D)  does not apply to essentials, such as food and shelter. 
A)  asserts that you become worse off as you consume more. 
B)  explains why you buy more of one good as its price declines. 
C)  does not apply to luxury goods. 
D)  does not apply to essentials, such as food and shelter.

Question 15

Economic theory asserts that people will buy more of an item when its price rises, because they derive more utility from high-price items.

Accepted Answer

A) True 
 B)False

Question 16

How does the law of diminishing marginal utility explain the fact a consumer will increase the quantity of a good she purchases when its price declines?

Accepted Answer

The consumer judges whether the satisfac

Question 17

The price elasticity of demand is affected by

Accepted Answer

A)  the costs of producing the good. 
B)  the wages paid to workers who provide the service or produce the good. 
C)  the number of substitutes consumers can find for the good. 
D)  the transportation costs of getting the good to market. 
A)  the costs of producing the good. 
B)  the wages paid to workers who provide the service or produce the good. 
C)  the number of substitutes consumers can find for the good. 
D)  the transportation costs of getting the good to market.

Question 18

A demand curve reflecting a perfectly elastic demand is _________.

Accepted Answer

The answer of A demand curve reflecting a perfectly elastic...

Question 19

What characterizes a demand curve depicting a perfectly inelastic demand?

Accepted Answer

The demand

Question 20

Table 4.5
  
-Using Table 4.5, when does marginal utility become negative?

Accepted Answer

A)  With the third glass of water 
B)  With the fourth glass of water 
C)  With the fifth glass of water 
D)  With the sixth glass of water 
A)  With the third glass of water 
B)  With the fourth glass of water 
C)  With the fifth glass of water 
D)  With the sixth glass of water

What consumption patterns would you observe if goods were characterized by increasing marginal utility?

Since utility cannot be measured, why do economists use it as a concept?

If the elasticity of demand for paperback books is -1.7 in the range between $6 and $8, what happens to total consumer expenditures on paperback books when the price rises from $6 to $8?

Which one of the following is TRUE?

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

Which one of the following is NOT a determinant of the price elasticity of demand?

An electric utility announced an increase in rates for residential customers. The announcement contained a statement saying that customers could conserve their energy usage and likely would not see any increase in their total monthly electric bill. What is the implication of this statement?

If the price elasticity of demand is -1.00, how much of a price decrease is needed in order for quantity demanded to rise by 15 percent?

If your total utility in consuming 3 glasses of root beer is 53 utils, and the marginal utility of the fourth glass is 7 utils, what would be the total utility of consuming four glasses?

What do you have to know in order to calculate the price elasticity of demand?

Marginal utility

Marginal utility is the

How does the price elasticity of demand for a good depend on the proportion of the consumer's budget devoted to expenditures on that good?

The law of diminishing marginal utility

Economic theory asserts that people will buy more of an item when its price rises, because they derive more utility from high-price items.

How does the law of diminishing marginal utility explain the fact a consumer will increase the quantity of a good she purchases when its price declines?

The price elasticity of demand is affected by

A demand curve reflecting a perfectly elastic demand is _________.

What characterizes a demand curve depicting a perfectly inelastic demand?

Table 4.5 -Using Table 4.5, when does marginal utility become negative?

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

What consumption patterns would you observe if goods were characterized by increasing marginal utility?

Since utility cannot be measured, why do economists use it as a concept?

If the elasticity of demand for paperback books is -1.7 in the range between $6 and $8, what happens to total consumer expenditures on paperback books when the price rises from $6 to $8?

Which one of the following is TRUE?

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

Which one of the following is NOT a determinant of the price elasticity of demand?

An electric utility announced an increase in rates for residential customers. The announcement contained a statement saying that customers could conserve their energy usage and likely would not see any increase in their total monthly electric bill. What is the implication of this statement?

If the price elasticity of demand is -1.00, how much of a price decrease is needed in order for quantity demanded to rise by 15 percent?

If your total utility in consuming 3 glasses of root beer is 53 utils, and the marginal utility of the fourth glass is 7 utils, what would be the total utility of consuming four glasses?

What do you have to know in order to calculate the price elasticity of demand?

Marginal utility

Marginal utility is the

How does the price elasticity of demand for a good depend on the proportion of the consumer's budget devoted to expenditures on that good?

The law of diminishing marginal utility

Economic theory asserts that people will buy more of an item when its price rises, because they derive more utility from high-price items.

How does the law of diminishing marginal utility explain the fact a consumer will increase the quantity of a good she purchases when its price declines?

The price elasticity of demand is affected by

A demand curve reflecting a perfectly elastic demand is _________.

What characterizes a demand curve depicting a perfectly inelastic demand?

Table 4.5 -Using Table 4.5, when does marginal utility become negative?

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