Exam 6: Demand and Welfare

Assume an individual has 14 hours per day for either work or leisure.Using an indifference curve graph,derive an individual's labor supply curve.In your answer,explain what might cause the individual's labor supply curve to eventually bend backwards.

(Essay)

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Question 21

What effect does a compensated price change have on a consumer's well-being?

(Multiple Choice)

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Question 22

Refer to Figure 6.4.What area represents the decrease in consumer surplus when the price of computers increases from $1,000 to $1,500?

(Multiple Choice)

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Question 23

Suppose that an individual has chosen not to work.Then a change in the wage rate:

(Multiple Choice)

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Question 24

Refer to Figure 6.4.If the price of computers is $1,000,then consumer surplus is given by the area represented by:

(Multiple Choice)

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Question 25

Refer to Figure 6.4.If the price of computers is $1,000,then expenditures on computers is represented by the area:

(Multiple Choice)

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Question 26

A change in price that is accompanied by a change in income sufficient to leave a consumer's well-being unchanged is called:

(Multiple Choice)

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Question 27

Refer to Figure 6.1.Assume that L1 represents the budget line before a price change.The income effect is shown by the movement:

(Multiple Choice)

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Question 28

Suppose a consumer's nominal income is $50,000 and the cost-of-living index is 1.3.The consumer's real income is:

(Multiple Choice)

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Question 29

The relative cost of achieving a fixed standard of living in different situations is called:

(Multiple Choice)

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Question 30

Refer to Figure 6.1.Assume that L1 represents the budget line before a price change.Which change in budget lines represents compensation?

(Multiple Choice)

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Question 31

Madison has an income of $50,which she spends on Pizza (P)and soft drinks (S).Her marginal rate of substitution is MRS_PS = S/P.The price of pizza (P_P)is $5 and the price of soft drinks (P_S)is $2.50.Finally,the formula for her indifference curves is given by S = 2U/P (a)Find Madison's uncompensated demand curve for pizza. (b)Find Madison's compensated demand curve for pizza.

(Essay)

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Question 32

For low wages,the leisure demand curve slopes ; for higher wages it slopes .

(Multiple Choice)

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Question 33

A compensated increase in the price of a good:

(Multiple Choice)

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Question 34

The substitution effect of a price change ________ consistent with the Law of Demand.

(Multiple Choice)

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Question 35

Refer to Figure 6.1.Assume that L1 represents the budget line before a price change.Point B represents the:

(Multiple Choice)

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Question 36

Suppose an individual consumes just pizza and soda.Using a graph,explain how the substitution bias causes the Lespeyres price index to overstate the true change in the cost of living resulting from an increase in the price of pizza.

(Essay)

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Question 37

Suppose Eddie's demand curve for text messages is T = 150 - 500P_t,where T stands for the number of text messages and P_t represents the price of text messages.What is Eddie's consumer surplus if P_t = $0.20 per message?

(Multiple Choice)

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Question 38

______ measures the percent change in the cost of a fixed consumption bundle.

(Multiple Choice)

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Question 39

When the price of a good decreases:

(Multiple Choice)

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Question 40

Showing 21 - 40 of 74

Assume an individual has 14 hours per day for either work or leisure.Using an indifference curve graph,derive an individual's labor supply curve.In your answer,explain what might cause the individual's labor supply curve to eventually bend backwards.

What effect does a compensated price change have on a consumer's well-being?

Refer to Figure 6.4.What area represents the decrease in consumer surplus when the price of computers increases from $1,000 to $1,500?

Suppose that an individual has chosen not to work.Then a change in the wage rate:

Refer to Figure 6.4.If the price of computers is $1,000,then consumer surplus is given by the area represented by:

Refer to Figure 6.4.If the price of computers is $1,000,then expenditures on computers is represented by the area:

A change in price that is accompanied by a change in income sufficient to leave a consumer's well-being unchanged is called:

Refer to Figure 6.1.Assume that L1 represents the budget line before a price change.The income effect is shown by the movement:

Suppose a consumer's nominal income is $50,000 and the cost-of-living index is 1.3.The consumer's real income is:

The relative cost of achieving a fixed standard of living in different situations is called:

Refer to Figure 6.1.Assume that L1 represents the budget line before a price change.Which change in budget lines represents compensation?

For low wages,the leisure demand curve slopes ; for higher wages it slopes .

A compensated increase in the price of a good:

The substitution effect of a price change ________ consistent with the Law of Demand.

Refer to Figure 6.1.Assume that L1 represents the budget line before a price change.Point B represents the:

Suppose an individual consumes just pizza and soda.Using a graph,explain how the substitution bias causes the Lespeyres price index to overstate the true change in the cost of living resulting from an increase in the price of pizza.

Suppose Eddie's demand curve for text messages is T = 150 - 500P_t,where T stands for the number of text messages and P_t represents the price of text messages.What is Eddie's consumer surplus if P_t = $0.20 per message?

______ measures the percent change in the cost of a fixed consumption bundle.

When the price of a good decreases:

Introduction

Supply and Demand

Balancing Benefits and Costs

Consumer Preferences

Constraints, Choices, and Demand

Technology and Production

Cost

Profit Maximization

Choices Involving Time

Choices Involving Risk

Choices Involving Strategy

Behavioral Economics

Equilibrium and Efficiency

Market Intervention

General Equilibrium, Efficiency, and Equity

Monopoly

Pricing Policies

Oligopoly

Externalities and Public Goods

Asymmetric Information

Filters

Exam 6: Demand and Welfare

Assume an individual has 14 hours per day for either work or leisure.Using an indifference curve graph,derive an individual's labor supply curve.In your answer,explain what might cause the individual's labor supply curve to eventually bend backwards.

What effect does a compensated price change have on a consumer's well-being?

Refer to Figure 6.4.What area represents the decrease in consumer surplus when the price of computers increases from $1,000 to $1,500?

Suppose that an individual has chosen not to work.Then a change in the wage rate:

Refer to Figure 6.4.If the price of computers is $1,000,then consumer surplus is given by the area represented by:

Refer to Figure 6.4.If the price of computers is $1,000,then expenditures on computers is represented by the area:

A change in price that is accompanied by a change in income sufficient to leave a consumer's well-being unchanged is called:

Refer to Figure 6.1.Assume that L1 represents the budget line before a price change.The income effect is shown by the movement:

Suppose a consumer's nominal income is $50,000 and the cost-of-living index is 1.3.The consumer's real income is:

The relative cost of achieving a fixed standard of living in different situations is called:

Refer to Figure 6.1.Assume that L1 represents the budget line before a price change.Which change in budget lines represents compensation?

For low wages,the leisure demand curve slopes ______; for higher wages it slopes ______.

A compensated increase in the price of a good:

The substitution effect of a price change ________ consistent with the Law of Demand.

Refer to Figure 6.1.Assume that L1 represents the budget line before a price change.Point B represents the:

Suppose an individual consumes just pizza and soda.Using a graph,explain how the substitution bias causes the Lespeyres price index to overstate the true change in the cost of living resulting from an increase in the price of pizza.

Suppose Eddie's demand curve for text messages is T = 150 - 500Pt,where T stands for the number of text messages and Pt represents the price of text messages.What is Eddie's consumer surplus if Pt = $0.20 per message?

______ measures the percent change in the cost of a fixed consumption bundle.

When the price of a good decreases:

Introduction

Supply and Demand

Balancing Benefits and Costs

Consumer Preferences

Constraints, Choices, and Demand

Technology and Production

Cost

Profit Maximization

Choices Involving Time

Choices Involving Risk

Choices Involving Strategy

Behavioral Economics

Equilibrium and Efficiency

Market Intervention

General Equilibrium, Efficiency, and Equity

Monopoly

Pricing Policies

Oligopoly

Externalities and Public Goods

Asymmetric Information

Filters

For low wages,the leisure demand curve slopes ; for higher wages it slopes .

Suppose Eddie's demand curve for text messages is T = 150 - 500P_t,where T stands for the number of text messages and P_t represents the price of text messages.What is Eddie's consumer surplus if P_t = $0.20 per message?