Question 1

Most goods can yield

Accepted Answer

A)  Only positive marginal utility. 
B)  Both positive and negative marginal utility. 
C)  Only negative marginal utility. 
D)  Only zero marginal utility. 
A)  Only positive marginal utility. 
B)  Both positive and negative marginal utility. 
C)  Only negative marginal utility. 
D)  Only zero marginal utility.

Question 2

Sellers can gain profits from price discrimination because

Accepted Answer

A)  Charging different prices based on willingness to pay can increase revenues without increasing costs. 
B)  Total expenses are less with price discrimination. 
C)  Total revenues are maximized when all buyers pay the same price. 
D)  Different prices charged to different customers can lower total revenue. 
A)  Charging different prices based on willingness to pay can increase revenues without increasing costs. 
B)  Total expenses are less with price discrimination. 
C)  Total revenues are maximized when all buyers pay the same price. 
D)  Different prices charged to different customers can lower total revenue.

Question 3

If Josh's income increases, then

Accepted Answer

A)  His entire budget constraint will shift toward the origin. 
B)  His entire budget constraint will shift away from the origin. 
C)  His indifference curves will shift away from the origin. 
D)  One end of his budget constraint will move away from the origin. 
A)  His entire budget constraint will shift toward the origin. 
B)  His entire budget constraint will shift away from the origin. 
C)  His indifference curves will shift away from the origin. 
D)  One end of his budget constraint will move away from the origin.

Question 4

The point where the budget constraint and an indifference curve are tangent

Accepted Answer

A)  Represents maximum total revenue. 
B)  Indicates the optimal level of production. 
C)  Represents the optimal consumption point. 
D)  Indicates profit maximization. 
A)  Represents maximum total revenue. 
B)  Indicates the optimal level of production. 
C)  Represents the optimal consumption point. 
D)  Indicates profit maximization.

Question 5

Any point on the budget constraint

Accepted Answer

A)  Gives the consumer the highest level of utility. 
B)  Represent a combination of two goods that are affordable. 
C)  Represents combinations of two goods that yield the same utility. 
D)  Reflects the price of one good divided by the price of another good. 
A)  Gives the consumer the highest level of utility. 
B)  Represent a combination of two goods that are affordable. 
C)  Represents combinations of two goods that yield the same utility. 
D)  Reflects the price of one good divided by the price of another good.

Question 6

Car dealers can easily price discriminate because

Accepted Answer

A)  Buyers do not know the car's price. 
B)  Sellers negotiate a separate price agreement with each individual buyer. 
C)  Each seller knows the price but the buyer does not. 
D)  Buyers get together to collectively negotiate a price. 
A)  Buyers do not know the car's price. 
B)  Sellers negotiate a separate price agreement with each individual buyer. 
C)  Each seller knows the price but the buyer does not. 
D)  Buyers get together to collectively negotiate a price.

Question 7

If advertising is successful,

Accepted Answer

A)  The demand becomes more elastic. 
B)  The demand curve shifts to the left. 
C)  The demand curve shifts to the right and becomes steeper. 
D)  The demand curve shifts to the left, and demand becomes more price-elastic. 
A)  The demand becomes more elastic. 
B)  The demand curve shifts to the left. 
C)  The demand curve shifts to the right and becomes steeper. 
D)  The demand curve shifts to the left, and demand becomes more price-elastic.

Question 8

Refer to Figure 19.1.Ben's consumer surplus is equal to

Accepted Answer

A)  $50. 
B)  $100. 
C)  $200. 
D)  $0. 
A)  $50. 
B)  $100. 
C)  $200. 
D)  $0.

Question 9

Advertisers currently spend about $1 million per year to change the demand for products.

Accepted Answer

A) True 
 B)False

Question 10

The total consumer surplus is shown on a graph as

Accepted Answer

A)  The area under the demand curve and below the actual price. 
B)  The area under the demand curve and above the actual price. 
C)  The area above the demand curve and above the actual price. 
D)  The area above the demand curve and below the actual price. 
A)  The area under the demand curve and below the actual price. 
B)  The area under the demand curve and above the actual price. 
C)  The area above the demand curve and above the actual price. 
D)  The area above the demand curve and below the actual price.

Question 11

If an individual demands a good, it means that he or she

Accepted Answer

A)  Has a strong desire for the good. 
B)  Is willing and able to purchase the good at some price. 
C)  Must need the good. 
D)  Prefers the good to all other choices. 
A)  Has a strong desire for the good. 
B)  Is willing and able to purchase the good at some price. 
C)  Must need the good. 
D)  Prefers the good to all other choices.

Question 12

Price discrimination

Accepted Answer

A)  Is illegal. 
B)  Rarely occurs in the airline industry. 
C)  Is a way for sellers to exact the maximum willingness to pay from buyers. 
D)  Is a method used by sellers to pit one buyer against the other. 
A)  Is illegal. 
B)  Rarely occurs in the airline industry. 
C)  Is a way for sellers to exact the maximum willingness to pay from buyers. 
D)  Is a method used by sellers to pit one buyer against the other.

Question 13

The additional pleasure or satisfaction from a good declines as more of it is consumed in a given period.This is the definition of the

Accepted Answer

A)  Law of demand. 
B)  Law of diminishing marginal utility. 
C)  Law of diminishing total utility. 
D)  Total revenue rule. 
A)  Law of demand. 
B)  Law of diminishing marginal utility. 
C)  Law of diminishing total utility. 
D)  Total revenue rule.

Question 14

A successful advertising campaign will

Accepted Answer

A)  Increase the demand for the advertised good. 
B)  Increase the absolute value of the price elasticity of demand for the advertised good. 
C)  Cause the quantity supplied of the advertised good to increase. 
D)  Reduce the perceived utility of the good. 
A)  Increase the demand for the advertised good. 
B)  Increase the absolute value of the price elasticity of demand for the advertised good. 
C)  Cause the quantity supplied of the advertised good to increase. 
D)  Reduce the perceived utility of the good.

Question 15

An indifference curve shows the combinations of two goods that yield the same level of utility.

Accepted Answer

A) True 
 B)False

Question 16

The benefit that consumers get when they buy goods at the equilibrium price but were willing to pay more is called

Accepted Answer

A)  Marginal utility. 
B)  The law of demand. 
C)  Consumer surplus. 
D)  Maximum price. 
A)  Marginal utility. 
B)  The law of demand. 
C)  Consumer surplus. 
D)  Maximum price.

Question 17

Jose goes to an all-you-can-eat buffet at a Chinese restaurant and consumes three plates of food.He does not go back for a fourth plate of food because

Accepted Answer

A)  The price of the fourth plate is too high. 
B)  He has reached the point of increasing marginal utility. 
C)  The marginal utility of the fourth plate would be zero or even negative. 
D)  His total utility would increase with the fourth plate of food. 
A)  The price of the fourth plate is too high. 
B)  He has reached the point of increasing marginal utility. 
C)  The marginal utility of the fourth plate would be zero or even negative. 
D)  His total utility would increase with the fourth plate of food.

Question 18

Complete Table 19.3 below.Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit.
$\begin{array}{llllll}
\text { Units of}&\text { TU of}&\text {MU of }&\text { Units of}&\text {TU of }&\text {MU of }\
 \text {Cola }&\text { Cola}&\text {Cola }&\text {Pretzels }&\text { Pretzels}&\text {Pretzels }\
\hline 1&40&40&1&30&30\2&\_\_\_&32&2&\_\_\_&20\3&96&24&2&66&16\4&112&\_\_\_&5&84&\_\_\_&
\end{array}$
Table 19.3
Michael's Utility Schedule In Table 19.3 the marginal utility per dollar of the second cola is

Accepted Answer

A)  10. 
B)  6. 
C)  4. 
D)  12. 
A)  10. 
B)  6. 
C)  4. 
D)  12.

Question 19

Total utility is

Accepted Answer

A)  The additional utility from consuming one more unit of a good. 
B)  The sum of the marginal utilities from the consumption of good. 
C)  A function that always falls as a buyer enjoys more units of a good. 
D)  How much utility a seller gets from producing a good. 
A)  The additional utility from consuming one more unit of a good. 
B)  The sum of the marginal utilities from the consumption of good. 
C)  A function that always falls as a buyer enjoys more units of a good. 
D)  How much utility a seller gets from producing a good.

Question 20

Marginal utility is

Accepted Answer

A)  The sum of the total utility of consuming a certain amount of a good. 
B)  The additional utility a consumer enjoys from the consumption of one more unit of a good. 
C)  The diminishing nature of total utility. 
D)  Always negative or zero. 
A)  The sum of the total utility of consuming a certain amount of a good. 
B)  The additional utility a consumer enjoys from the consumption of one more unit of a good. 
C)  The diminishing nature of total utility. 
D)  Always negative or zero.

Most goods can yield

Sellers can gain profits from price discrimination because

If Josh's income increases, then

The point where the budget constraint and an indifference curve are tangent

Any point on the budget constraint

Car dealers can easily price discriminate because

If advertising is successful,

Refer to Figure 19.1.Ben's consumer surplus is equal to

Advertisers currently spend about $1 million per year to change the demand for products.

The total consumer surplus is shown on a graph as

If an individual demands a good, it means that he or she

Price discrimination

The additional pleasure or satisfaction from a good declines as more of it is consumed in a given period.This is the definition of the

A successful advertising campaign will

An indifference curve shows the combinations of two goods that yield the same level of utility.

The benefit that consumers get when they buy goods at the equilibrium price but were willing to pay more is called

Jose goes to an all-you-can-eat buffet at a Chinese restaurant and consumes three plates of food.He does not go back for a fourth plate of food because

Total utility is

Marginal utility is

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

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Exam 5: Consumer Choice

Most goods can yield

Sellers can gain profits from price discrimination because

If Josh's income increases, then

The point where the budget constraint and an indifference curve are tangent

Any point on the budget constraint

Car dealers can easily price discriminate because

If advertising is successful,

Refer to Figure 19.1.Ben's consumer surplus is equal to

Advertisers currently spend about $1 million per year to change the demand for products.

The total consumer surplus is shown on a graph as

If an individual demands a good, it means that he or she

Price discrimination

The additional pleasure or satisfaction from a good declines as more of it is consumed in a given period.This is the definition of the

A successful advertising campaign will

An indifference curve shows the combinations of two goods that yield the same level of utility.

The benefit that consumers get when they buy goods at the equilibrium price but were willing to pay more is called

Jose goes to an all-you-can-eat buffet at a Chinese restaurant and consumes three plates of food.He does not go back for a fourth plate of food because

Total utility is

Marginal utility is

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

Filters