Deck 5: Consumers and Incentives

Question 1

Given your budget constraint $60j + $20s = $300 and the graph above,what is the opportunity cost of a sweater?

A) of a pair of jeans
B) of a pair of jeans
C) 1 pair of jeans
D) 3 pairs of jeans

Answer 1

of a pair of jeans

Question 2

Assume that a consumer can spend $20 on two goods-pens and pencils.If the price of one pen is $5 and the price of one pencil is $2,which of the following combinations of the two goods represents a point on the consumer's budget constraint?

A) 3 pens and 2 pencils
B) 1 pen and 10 pencils
C) 2 pens and 5 pencils
D) 2 pens and 3 pencils

Answer 2

2 pens and 5 pencils

Question 3

Which of the following statements is true?

A) A consumer's tastes and preferences do not change over time.
B) A consumer's tastes and preferences determine the satisfaction she receives from consumption.
C) A consumer's tastes and preferences are not revealed through her buying decisions and consumption patterns.
D) A consumer's tastes and preferences do not play an important role in arriving at a buying decision.

Answer 3

A consumer's tastes and preferences determine the satisfaction she receives from consumption.

Question 4

Which of the following is NOT a determining factor of consumers' purchase decisions?

A) Consumers' tastes and preferences
B) The market price of the finished goods
C) The cost of factor inputs
D) Consumers' income

Question 5

Given your budget constraint $60j + $20s = $300 and the graph above,what is the opportunity cost of a pair of jeans?

A) of a sweater
B) 1 sweater
C) 2 sweaters
D) 3 sweaters

Question 6

In the graph above,which bundles of jeans and sweaters are in your budget set?

A) Only Bundle D (2 pairs of jeans and 8 sweaters)
B) Bundle D (2 pairs of jeans and 8 sweaters) and Bundle A (5 pairs of jeans and no sweaters)
C) Bundles D (2 pairs of jeans and 8 sweaters), A (5 pairs of jeans and no sweaters), and B (4 pairs of jeans and 4 sweaters)
D) Bundles D (2 pairs of jeans and 8 sweaters), A (5 pairs of jeans and no sweaters), and C (3 pairs of jeans and 6 sweaters)

Question 7

Your budget constraint contains ________.

A) only those bundles of jeans and sweaters that exhaust less than all your income
B) all bundles of jeans and sweaters that are affordable with your income
C) all bundles of jeans and sweaters that exhaust all your income
D) all bundles of jeans that are not affordable with your income

Question 8

Which of the following correctly describes incentives?

A) Incentives refer to the maximum price that a buyer is willing to pay for a good.
B) Incentives are rewards or penalties that motivate people to behave in a particular way.
C) Incentives are prices that are fixed by the government and not by market forces.
D) Incentives refer to the minimum price at which a seller is willing to sell a product.

Question 9

Scenario: Suppose pairs of jeans (j) cost $60 per pair, sweaters (s) cost $20 each, and you have $300 of income. Assume you purchase only jeans and sweaters with your income. Your budget constraint is:
$60 - j + $20 - s = $300.
The graph below shows 4 consumption bundles (combinations of jeans and sweaters).

Your budget set contains ________.

A) only those bundles of jeans and sweaters that exhaust less than all your income
B) all bundles of jeans and sweaters that are affordable with your income
C) all bundles of jeans and sweaters that exhaust all your income
D) all bundles of jeans that are not affordable with your income

Question 10

Your mom has clipped two coupons from the Sunday paper.The first coupon is for a $5 off of a $10 shampoo,and the second one is for a $5 off of a $50 haircut.Your mom says the first coupon is more valuable.

A) You agree, because the first coupon entails a 50% savings versus a 10% savings in the second one.
B) You agree, because the first coupon is for a product, while the second one is for a service.
C) You disagree, because both coupons entail a $5 saving.
D) You disagree, because restaurant coupons are harder to find.

Question 11

The set of all possible bundles of goods and services that can be purchased with a consumer's income is referred to as a ________.

A) demand set
B) supply set
C) budget set
D) universal set

Question 12

If a consumer purchases any combination of goods on her budget constraint ________.

A) she will minimize total utility
B) she will exhaust her entire income
C) she will maximize her marginal utility obtained from the consumption of each additional amount of both goods
D) she will maximize her marginal benefit obtained from the consumption of each additional amount of both goods

Question 13

In the graph above,which bundles of jeans and sweaters are on your budget constraint?

A) Bundles A (5 pairs of jeans, 0 sweaters) and C (3 pairs of jeans and 6 sweaters)
B) Bundles A (5 pairs of jeans, 0 sweaters), B(4 pairs of jeans and 4 sweaters), and C(3 pairs of jeans and 6 sweaters)
C) Bundles A (5 pairs of jeans, 0 sweaters), C (3 pairs of jeans and 6 sweaters), and D (2 pairs of jeans and 8 sweaters)
D) Bundles B (4 pairs of jeans and 4 sweaters), C (3 pairs of jeans and 6 sweaters), and D (2 pairs of jeans and 8 sweaters)

Question 14

A consumer's budget refers to the ________.

A) wealth the consumer has acquired over time
B) average prices of the goods and services bought by the consumer
C) amount of money the consumer can spend on various goods and services
D) difference between the consumer's willingness to pay for goods and services and the amount actually paid.

Question 15

Which of the following statements is true of incentives?

A) Incentives can be financial or moral, but not coercive.
B) Incentives can be financial or coercive, but not moral.
C) Incentives are designed to change behavior.
D) Incentives are always in the form of rewards.

Question 16

Suppose the prices of a pair of jeans,a shirt,and a tie are $30,$20,and $10,respectively.Which of the following statements is true in this context?

A) The opportunity cost of buying a pair of jeans is 2 ties.
B) The opportunity cost of buying a tie is 3 pairs of jeans.
C) The opportunity cost of buying a tie is 2 shirts.
D) The opportunity cost of buying a shirt is 2 ties.

Question 17

The following figure displays John's budget constraint when he spends his income on tables and chairs.

Refer to the figure above.If John spends his entire income on tables,how many tables can he purchase?

A) 8
B) 10
C) 30
D) 40

Question 18

Assume that a combination of 10 bottles of wine and 2 cartons of milk lies on a consumer's budget constraint.If the price of one bottle of wine is $10 and the price of one carton of milk is $1,what is the consumer's income?

A) $100
B) $20
C) $120
D) $102

Question 19

Which of the following statements is true?

A) A consumer's buying decisions do not indicate anything about her tastes and preferences.
B) A consumer's demand for a good determines the price of the good in a perfectly competitive market.
C) The relative prices of goods do not affect a consumer's buying decision.
D) A consumer in a perfectly competitive market buys only a tiny fraction of the total amount produced.

Question 20

In a perfectly competitive market,all consumers ________.

A) may buy one or many unit of the good, without the price changing
B) bid the lowest price for the good they want to consume
C) tend to buy equal amounts of a good
D) have exactly the same tastes and preferences

Question 21

As a result in this decrease in your income from $300 to $240,the opportunity cost of a pair of jeans ________.

A) remains unchanged at 3 sweaters
B) falls to 2 sweaters
C) falls to 1 sweater
D) falls to sweaters

Question 22

The following table shows the total benefit that Jenny derives from consuming different quantities of chocolate.

Refer to the table above.If Jenny consumes a sixth unit of chocolate and the marginal benefit derived from that unit is -1,the total benefit derived from the sixth unit will be equal to ________.

A) $0
B) $3
C) $29
D) $39

Question 23

Define a budget set.Is it the same as a budget constraint?

Question 24

The following figure displays John's budget constraint when he spends his income on tables and chairs.

Refer to the figure above.If John decides to spend his entire income on tables and the price of a table is $2,what is John's income?

A) $20
B) $40
C) $60
D) $80

Question 25

The following figure shows the budget constraint of Lesley when she is faced with two goods: burgers and icecream.

Refer to the figure above.If the price of a burger doubled,Lesley's new budget constraint ________.

A) will start from the same point on the vertical axis, but will cross the horizontal axis at 3
B) will start from the same point on the vertical axis, but will cross the horizontal axis at 12
C) will start from the same point on the horizontal axis, but will cross the vertical axis at 5
D) will start from the same point on the horizontal axis, but will cross the vertical axis at 20

Question 26

While making a purchase decision,a buyer should buy the good that yields the highest ________.

A) marginal benefit per dollar spent
B) average benefit plus marginal benefit per dollar spent
C) total utility per dollar spent
D) average benefit per dollar spent

Question 27

The following figure displays John's budget constraint when he spends his income on tables and chairs.

Refer to the figure above.Which of the following statements is true?

A) The opportunity cost of buying one chair is 5 tables.
B) The price of tables is more than the price of chairs.
C) The opportunity cost of buying tables increases as more tables are bought.
D) The opportunity cost of buying one table is 7 chairs.

Question 28

The following figure shows the budget constraint of Lesley when she is faced with two goods: burgers and icecream.

Refer to the figure above.If Lesley's budget for burgers and ice creams is cut by half,Lesley's new budget constraint ________.

A) will cross the vertical axis at 5, and will cross the horizontal axis at 3
B) will start from the same point on the vertical axis, but will cross the horizontal axis at 3
C) will start from the same point on the horizontal axis, but will cross the vertical axis at 5
D) will cross the vertical axis at 20, and will cross the horizontal axis at 12

Question 29

Assume that a consumer has an income of $200 that has to be spent on two goods,decorative lights and shoes.If the price per light is $10 and the price of one pair of shoes is also $10,graphically illustrate her budget set and constraint.Also,calculate the opportunity cost of purchasing either good.

Question 30

Now suppose your income returns to its original level,$300,the price of sweaters remains constant at $20,but the price of jeans falls from $60 per pair to $30 per pair,so your new budget constraint is $30j + $20s = $300.This rotation of your budget constraint is shown in the graph below.

As a result of the decrease in the price of jeans from $60 per pair to $30 per pair,the opportunity cost of a pair of jeans ________.

A) remains unchanged at 3 sweaters
B) falls to 2 sweaters
C) falls to 1.5 sweaters
D) falls to sweaters

Question 31

The following table shows the total benefit that Jenny derives from consuming different quantities of chocolate.

Refer to the table above.What is the marginal benefit that Jenny derives from the fifth unit of chocolate?

A) $0
B) $1
C) $6
D) $30

Question 32

A budget constraint is a straight line because ________.

A) the tastes and preferences of a consumer change along the constraint
B) a consumer faces a fixed price for both goods that does not change with changes in consumption
C) the opportunity cost of buying each of the goods changes along the constraint
D) a consumer has a limited money income

Question 33

The following figure displays John's budget constraint when he spends his income on tables and chairs.

Refer to the figure above.If John spends his entire income on chairs,how many chairs can he purchase?

A) 3
B) 8
C) 20
D) 40

Question 34

What are the factors that determine a buyer's purchasing decision?

Question 35

Maylin goes to her local sporting goods store to buy socks and jogging shorts.Socks cost $10 per pair and jogging shorts cost $15 each.At her current consumption bundle pair of 4 pairs of socks and 2 jogging shorts,her marginal benefit from the last pair of socks is 20 and the marginal benefit of the last jogging short is 30.Maylin should ________.

A) buy the same number of socks but buy an additional jogging short
B) buy one more pair of socks and one fewer jogging short
C) buy one more jogging short and one fewer pair of socks
D) leave her consumption bundle unchanged

Question 36

The following table shows the total benefit that Jenny derives from consuming different quantities of chocolate.

Refer to the table above.If the price of one chocolate is $2,the marginal benefit per dollar spent on the fourth unit of chocolate will equal ________.

A) $4
B) $2
C) $2.5
D) $5

Question 37

The slope of a consumer's budget constraint equals ________.

A) the ratio of the income of the consumer to the price of the good measured along the horizontal axis
B) the ratio of the price of the good measured along the vertical axis to the price of the good measured along the horizontal axis
C) the ratio of the price of the good measured along the horizontal axis to the price of the good measured along the vertical axis
D) the ratio of the income of the consumer to the price of the good measured along the vertical axis

Question 38

Scenario: Joey is a college student living in Boston. He has preferences over only two goods, small pies at Pizzeria Regina (denoted by PR) and Red Sox games (denoted by RS). Joey has $150 per month in disposable income to spend on baseball games and pizza, the price of a small pie at Pizzeria Regina is $10 (pPR = $10) and the price of a Red Sox ticket is $20 (pRS = $20).
Joey's budget constraint is given by $ ________ PR + $ ________ RS = $________.

Question 39

The following table shows the total benefit that Jenny derives from consuming different quantities of chocolate.

Refer to the table above.What is the marginal benefit that Jenny derives from the second unit of chocolate?

A) $0
B) $8
C) $9
D) $18

Question 40

The following figure shows the budget constraint of Lesley when she is faced with two goods: burgers and icecream.

Refer to the figure above.If the line represents Lesley's budget constraint,and Lesley has $60 budget to be spent on burgers and ice cream,what is the price of burger and ice cream?

A) Pbᵤᵣgₑᵣ = $10, and Pᵢcₑcᵣₑₐm = $6
B) Pbᵤᵣgₑᵣ = $5, and Pᵢcₑcᵣₑₐm = $3
C) Pbᵤᵣgₑᵣ = $12, and Pᵢcₑcᵣₑₐm = $3
D) Only the ratio of the prices can be determined

Question 41

Scenario: The following table shows the marginal benefit that a consumer derives by consuming different quantities of juice and milk.

Refer to the table above.If the income of the consumer is $24,the optimal choice of the consumer will include ________.

A) 1 quart of juice and 1 quart of milk
B) 3 quarts of juice and 4 quarts of milk
C) 4 quarts of juice and 4 quarts of milk
D) 4 quarts of juice and 5 quarts of milk

Question 42

Anne has chosen how many bagels and how many units of cream cheese she would buy this month.She has $20 to spend on these two goods.Suppose that her chosen combination,the marginal benefit per dollar for bagels is $6,and her marginal benefit per dollar for cream cheese is $10.If she decides to buy more bagels and less cream cheese,________.

A) her marginal benefit per dollar for bagels will increase, and her marginal benefit per dollar for cream cheese will decrease
B) her marginal benefit per dollar for bagels will decrease, and her marginal benefit per dollar for cream cheese will increase
C) her marginal benefit per dollar for bagels will increase, and her marginal benefit per dollar for cream cheese will remain the same
D) her marginal benefit per dollar for bagels will decrease, and her marginal benefit per dollar for cream cheese will remain the same

Question 43

A decrease in the price of either good purchased by a consumer will cause the consumer's budget constraint to ________.

A) pivot leftward
B) pivot rightward
C) shift leftward
D) shift rightward

Question 44

The following table shows the marginal benefit that Marcus derives by consuming different quantities of hotdog and soda. The price of a hotdog is $3, and the price of a soda is $1.

Refer to the table above.The price of a soda increases from $1 to $2.What is the optimal combination of Soda and Hotdog for Marcus,if his weekly budget for hotdog and soda is $10?

A) 2 sodas, and 2 hotdogs
B) 3 sodas, and 3 hotdogs
C) 6 sodas, and 5 hotdogs
D) 4 sodas, and 2 hotdogs

Question 45

The following table shows the marginal benefit that Marcus derives by consuming different quantities of hotdog and soda. The price of a hotdog is $3, and the price of a soda is $1.

Refer to the table above.What is the optimal combination of Soda and Hotdog for Marcus,if his weekly budget for hotdog and soda is $14?

A) 2 sodas, and 4 hotdogs
B) 3 sodas, and 3 hotdogs
C) 6 sodas, and 5 hotdogs
D) 5 sodas, and 3 hotdogs

Question 46

Using the table below,solve for the bundle of small Regina Pizzeria pies and Red Sox games that maximizes Joey's utility/well-being/satisfaction.

Question 47

Anne has chosen how many bagels and how many units of cream cheese she would buy this month.She has $20 to spend on these two goods.Suppose that her chosen combination,the marginal benefit per dollar for bagels is $6,and her marginal benefit per dollar for cream cheese is $10.By reallocating one dollar from ________ to ________ she can add ________ to her benefit.

A) bagels; cream cheese; $4
B) bagels; cream cheese; $10
C) cream cheese; bagels; $6
D) cream cheese; bagels; $10

Question 48

Scenario: The following table shows the marginal benefit that a consumer derives by consuming different quantities of juice and milk.

Refer to the table above.What is the total benefit that the consumer derives when he consumes 4 quarts of milk?

A) $8
B) $22
C) $24
D) $25

Question 49

An optimizing consumer makes her purchase decisions based on ________.

A) the total benefits at various levels of consumption
B) the benefits per dollar spent at the margin
C) the total benefits per dollar spent at various levels of consumption
D) the benefits from the first dollar spent on consumption

Question 50

If the quantity of tea is measured on the horizontal axis and the quantity of coffee is measured on the vertical axis,an increase in the price of coffee will cause a budget constraint to ________.

A) pivot leftward along the vertical axis
B) pivot rightward along the vertical axis
C) pivot leftward along the horizontal axis
D) pivot rightward along the horizontal axis

Question 51

An optimizing consumer has to choose between two goods: Good A priced at PA and Good B priced at PB.Given that MBA is the marginal benefit from consuming Good A and MBB is the marginal benefit from consuming Good B,the consumer's well-being will be maximized at the point where ________.

A) MBA = MBB
B) MBA/PB = MBB/PA
C) MBA/PA = MBB/PB
D) MBA = MBB/PB

Question 52

Assume that an individual spends her income on sweaters and shirts.If the price of a sweater increases,________.

A) the opportunity cost of buying sweaters increases
B) the total benefit obtained from the purchase of shirts decreases
C) the opportunity cost of buying shirts increases
D) the marginal benefit obtained from the purchase of an additional unit of sweater increases

Question 53

In equilibrium,________.

A) the ratio of total benefits to price should be identical across all goods
B) the ratio of total benefits to income should be identical across all goods
C) the ratio of marginal benefits to price should be identical across all goods
D) the ratio of marginal benefits to income should be identical across all goods

Question 54

A buyer has $20 to spend on rice and beans.Rice costs $2 and beans cost $3 per pound.The buyer is buying the combination of 4 pounds of rice and 4 pounds of beans.At this combination,her marginal benefit from rice is $14 and her marginal benefit from beans is $18.This buyer should ________.

A) buy less beans and more rice
B) buy more rice and less beans
C) buy more of both rice and beans
D) not change his consumption

Question 55

If the price of the good measured along the vertical axis increases without a change in the price of the good measured along the horizontal axis,a consumer's budget constraint ________.

A) pivots rightward without a change in the intercept on the horizontal axis
B) pivots leftward without a change in the intercept on the horizontal axis
C) shifts to the right
D) shifts to the left

Question 56

The opportunity cost of a Red Sox ticket is ________ small Pizzeria Regina Pies.

Question 57

Dawn has preferences for minor league baseball games and NASCAR races.Minor league baseball tickets are $10 per game and NASCAR tickets are $20/race.Dawn's monthly budget of $90 allows her to buy five minor league baseball tickets and two NASCAR tickets.At this consumption bundle,her marginal benefit of the last baseball game is 30 and the marginal benefit of the last NASCAR ticket is 40.Dawn ________.

A) could increase her total benefit by buying more minor league baseball tickets and fewer NASCAR race tickets
B) could increase her total benefit by buying NASCAR race tickets and fewer minor league baseball tickets
C) is maximizing her total benefit with her current consumption bundle
D) Cannot answer the question given the information provided

Question 58

A change in the slope of a consumer's budget constraint indicates a change in the ________.

A) price of either good purchased by the consumer
B) consumer's income
C) level of consumer satisfaction obtained from the consumption of both goods
D) consumer's tastes and preferences

Question 59

The following table shows the marginal benefit that Marcus derives by consuming different quantities of hotdog and soda. The price of a hotdog is $3, and the price of a soda is $1.

Refer to the table above.What is the optimal combination of Soda and Hotdog for Marcus,if his weekly budget for hotdog and soda is $10?

A) 2 sodas, and 4 hotdogs
B) 3 sodas, and 3 hotdogs
C) 6 sodas, and 5 hotdogs
D) 4 sodas, and 2 hotdogs

Question 60

Which of the following will lead to a change in the opportunity cost of buying a pen in terms of a pencil?

A) An increase in the consumer's income
B) A decrease in the consumer's income
C) A twofold increase in the prices of both pens and pencils
D) A twofold increase in the price of pens and a threefold increase in the price of pencils

Question 61

For an individual,consumer surplus measures ________.

A) willingness to pay
B) the price paid for the good
C) willingness to pay less the price paid for the good
D) willingness to pay plus the price paid for the good

Question 62

Scenario: Maylin is shopping at the sporting goods store for socks and running shoes. She has determined the following total benefit derived from each quantity of socks and running shoe

Now suppose the price of running shorts doubles to $20,socks remain priced at $10 per pair,and Maylin has $150 of income.What consumption bundle maximizes Maylin's total benefit at the new,higher price of running shorts?

A) 5 pairs of socks and 5 running shorts
B) 4 pairs of socks and 4 running shorts
C) 3 pairs of socks and 3 running shorts
D) 2 pairs of socks and 2 running shorts

Question 63

Willingness to pay ________.

A) is the lowest price that a buyer is willing and able to pay for a unit of good
B) is the highest price that a buyer is willing and able to pay for a unit of good
C) is equal to the price of the lowest-priced good in a consumption bundle
D) is equal to the price of the highest-priced good in a consumption bundle

Question 64

Sam has determined that his demand for the new energy drink Brawndo is characterized by the following schedule:

If the market price of Brawndo is $4 per can,Sam's total willingness to pay for the 6 cans he purchases is ________.

A) $42
B) $39
C) $18
D) $15

Question 65

As the ________ increases,________.

A) quantity demanded of a good; its price increases
B) quantity demanded of a good; its price decreases
C) price of a good; its quantity demanded increases
D) price of a good; its quantity demanded decreases

Question 66

The following figure shows a consumer's budget constraint for jeans and sweaters.

Refer to the figure above.Suppose B₁ is the original budget constraint of a consumer.A change in the budget constraint from B₁ to B₂ indicates ________.

A) an increase in the price of sweaters
B) a decrease in the price of sweaters
C) an increase in the consumer's income
D) a decrease in the consumer's income.

Question 67

Lily wants to maximize her benefit of consuming apples and bananas,given her fixed budget of $10 for these two fruits.The price of an apple is $1,and the price of a banana is $0.50.In order to derive Lily's demand curve for bananas,we need to ________.

A) solve the buyer's problem for her once, and find the optimal number of bananas, when price of a bananas is $0.50
B) solve the buyer's problem for her multiple times and find the optimal number of bananas, when price of a bananas is at a different level each time
C) draw a downward sloping line with slope of -1
D) draw a downward sloping line with slope of -2

Question 68

Willingness to pay is the ________ for a unit of good.For a trade to take place,the willingness
To pay must be ________.

A) lowest price that a buyer is willing to pay; lower than the price of the good.
B) lowest price that a buyer is willing to pay; higher than the price of the good.
C) highest price that a buyer is willing to pay; lower than the price of the good.
D) highest price that a buyer is willing to pay; higher than the price of the good.

Question 69

From the information provided in the following table,determine the optimal bundle that a consumer with an income of $34 must choose to maximize her well-being.

Question 70

How does a decrease in the price of one good affect a consumer's budget constraint? How is the effect different from a decrease in the consumer's income?

Question 71

The following figure shows a consumer's budget constraint for jeans and sweaters.

Refer to the figure above.Suppose the price of a sweater is $3.If the budget constraint of a consumer is B₃,then her income will be equal to ________.

A) $45
B) $90
C) $135
D) $270

Question 72

If the quantity of milk is measured on the horizontal axis and the quantity of juice is measured on the vertical axis,a decrease in the price of milk will cause a budget constraint to ________.

A) pivot rightward along the vertical axis
B) pivot rightward along the horizontal axis
C) shift to the left
D) shift to the right

Question 73

A consumer has $100 that she can spend on tables and chairs.If her income increases to $200 and the prices of tables and chairs remains unchanged,her budget constraint will ________.

A) pivot to the left along the vertical axis
B) pivot to the right along the horizontal axis
C) shift to the left
D) shift to the right

Question 74

The following figure shows a consumer's budget constraint for jeans and sweaters.

Refer to the figure above.Suppose B₂ is the original budget constraint of a consumer.A change in the budget constraint from B₂ to B₃ indicates ________.

A) a decrease in the price of jeans
B) a decrease in the price of sweaters
C) an increase in the consumer's income
D) a decrease in the consumer's income

Question 75

Scenario: Maylin is shopping at the sporting goods store for socks and running shoes. She has determined the following total benefit derived from each quantity of socks and running shoe

Given your answers to Questions 1)and 2)above,sketch Maylin's demand curve for running shorts in the graph below,assuming her demand curve is linear.

Question 76

Jack has an income of $150 per month that he can spend on two goods: shoes and jeans.From the following table,estimate the bundle that maximizes Jack's well-being.

Question 77

Using Sam's demand schedule for Brawndo above and the market price of $4 per can,Sam's total consumer surplus from purchasing 6 cans at the market price is ________.

A) $39
B) $24
C) $18
D) $15

Question 78

Scenario: Maylin is shopping at the sporting goods store for socks and running shoes. She has determined the following total benefit derived from each quantity of socks and running shoe

If Maylin has $150 of income to spend on socks and running shorts,socks cost $10 per pair and running shorts are $10 each,what consumption bundle maximizes Maylin's total benefit?

A) 1 pair of socks and 6 running shorts
B) 3 pairs of socks and 7 running shorts
C) 5 pairs of socks and 8 running shorts
D) 6 pairs of socks and 9 running shorts

Question 79

John is ready to pay $5 for an extra loaf of bread.Because of an ongoing discount in the grocery store,he gets a loaf for $2.After the discount,John's consumer surplus from the purchase is ________.

A) $2
B) $2.50
C) $3
D) $10

Question 80

Consumer surplus is ________.

A) the difference between the willingness to pay for a good and the price paid for the good
B) the sum of the willingness to pay for a good and the price paid for the good
C) the product of the willingness to pay for a good and the price paid for the good
D) the ratio of the willingness to pay for a good to the price paid for the good