Question 1

The price elasticity of demand is a numerical measure of

Accepted Answer

A)   the necessity of a good to consumers.
B)   the importance of a good to consumers.
C)   the brand loyalty of consumers.
D)   consumer sensitivity to income changes.
E)   consumer sensitivity to price changes.

Question 2

-Refer to the table above.The total revenue of coffee producers when the price is $3 per kilogram is

Accepted Answer

A)   $77.
B)   $84.
C)   $95.
D)   $104.
E)   $105.

Question 3

As one moves down along a linear demand curve (i.e. ,from high-price,low-quantity combinations to low-price,high-quantity combinations) ,the price elasticity of demand becomes

Accepted Answer

A)   more elastic.
B)   larger.
C)   negative.
D)   remains constant.
E)   more inelastic.

Question 4

If Karen's marginal utility from her 13th pair of shoes is 15,then the marginal utility from her 14th pair is likely to be

Accepted Answer

A)   more than 15.
B)   exactly 15.
C)   less than 15.
D)   exactly 14.
E)   less than 14.

Question 5

Which of the following statements is FALSE?

Accepted Answer

A)   Goods and services are valuable to consumers because they generate utility.
B)   Four hamburgers are likely to generate more total utility than three hamburgers.
C)   Utility cannot be quantified.
D)   The fourth hamburger increases total utility by more than the third hamburger.
E)   The marginal utility of a movie is likely to be different from the marginal utility of an automobile.

Question 6

If the demand curve for espresso is given by the equation P = 20 - 5Q,what is total expenditure when P = $5?

Accepted Answer

A)   $15.
B)   $25.
C)   $30.
D)   $35.
E)   $50.

Question 7

During recessions,when workers lose their jobs and face reduced incomes,sales of durable goods (goods that last three years or more) decline.This implies that durable goods are

Accepted Answer

A)   substitutes.
B)   normal goods.
C)   complements.
D)   inferior goods.
E)   elastic.

Question 8

Beth has $20 to spend on apples and bananas.Apples cost $3 per kilogram and bananas cost $2 per kilogram.Using A to represent the quantity of apples and B to represent the quantity of bananas,Beth's budget constraint can be written as

Accepted Answer

A)   20 = 2A + 3B.
B)   20 = 3A - 2B.
C)   3A = 20 + 2B.
D)   20 = 3A + 2B.
E)   3B = 2A - 20.

Question 9

Given that Chris' marginal utility from his first taco is 15 and his marginal utility from the second taco is 12,one can infer that

Accepted Answer

A)   Chris' total utility of two tacos is 27.
B)   Chris' marginal utility for the third taco will exceed 12.
C)   Chris should not eat two tacos.
D)   Chris' average utility for two tacos is 24.
E)   Chris should eat two tacos.

Question 10

For which of the demand elasticities is the sign (positive or negative) important in interpreting the meaning?

Accepted Answer

A)   Only the price elasticity of demand.
B)   Both the price elasticity of demand and the income elasticity of demand.
C)   Both the income elasticity of demand and the cross-price elasticity of demand.
D)   Only the cross-price elasticity of demand.
E)   All three elasticities (price,income,and cross-price) .

Question 11

-Refer to the table above.If the price of Good B is $2 and the consumer purchases 4 units,then the extra utility from spending an extra dollar on Good B is

Accepted Answer

A)   14.
B)   4.
C)   7.
D)   21.
E)   6.

Question 12

If the ratio of the marginal utility of bread to the marginal utility of butter is 2,Brad can increase his welfare by consuming

Accepted Answer

A)   more bread.
B)   more bread and butter.
C)   more butter only.
D)   less bread.
E)   more bread only if the price of bread is less than twice the price of butter.

Exam 4: Demand: the Benefit Side of the Market

If Karen's marginal utility from her 13^th pair of shoes is 15,then the marginal utility from her 14^th pair is likely to be

Correct Answer
verified

The price elasticity of demand is a numerical measure of

Correct Answer
verified

Which of the following statements is FALSE?

Correct Answer
verified

For which of the demand elasticities is the sign (positive or negative) important in interpreting the meaning?

Correct Answer
verified

Given that Chris' marginal utility from his first taco is 15 and his marginal utility from the second taco is 12,one can infer that

Correct Answer
verified

-Refer to the table above.The total revenue of coffee producers when the price is $3 per kilogram is

Correct Answer
verified

During recessions,when workers lose their jobs and face reduced incomes,sales of durable goods (goods that last three years or more) decline.This implies that durable goods are

Correct Answer
verified

If the ratio of the marginal utility of bread to the marginal utility of butter is 2,Brad can increase his welfare by consuming

Correct Answer
verified

-Refer to the table above.If the price of Good B is $2 and the consumer purchases 4 units,then the extra utility from spending an extra dollar on Good B is

Correct Answer
verified

If the demand curve for espresso is given by the equation P = 20 - 5Q,what is total expenditure when P = $5?

Correct Answer
verified

As one moves down along a linear demand curve (i.e. ,from high-price,low-quantity combinations to low-price,high-quantity combinations) ,the price elasticity of demand becomes

Correct Answer
verified

Beth has $20 to spend on apples and bananas.Apples cost $3 per kilogram and bananas cost $2 per kilogram.Using A to represent the quantity of apples and B to represent the quantity of bananas,Beth's budget constraint can be written as

Correct Answer
verified

Exam 4: Demand: the Benefit Side of the Market

If Karen's marginal utility from her 13th pair of shoes is 15,then the marginal utility from her 14th pair is likely to be

Correct AnswerverifiedShow Answer

The price elasticity of demand is a numerical measure of

Correct AnswerverifiedShow Answer

Which of the following statements is FALSE?

Correct AnswerverifiedShow Answer

For which of the demand elasticities is the sign (positive or negative) important in interpreting the meaning?

Correct AnswerverifiedShow Answer

Given that Chris' marginal utility from his first taco is 15 and his marginal utility from the second taco is 12,one can infer that

Correct AnswerverifiedShow Answer

-Refer to the table above.The total revenue of coffee producers when the price is $3 per kilogram is

Correct AnswerverifiedShow Answer

During recessions,when workers lose their jobs and face reduced incomes,sales of durable goods (goods that last three years or more) decline.This implies that durable goods are

Correct AnswerverifiedShow Answer

If the ratio of the marginal utility of bread to the marginal utility of butter is 2,Brad can increase his welfare by consuming

Correct AnswerverifiedShow Answer

-Refer to the table above.If the price of Good B is $2 and the consumer purchases 4 units,then the extra utility from spending an extra dollar on Good B is

Correct AnswerverifiedShow Answer

If the demand curve for espresso is given by the equation P = 20 - 5Q,what is total expenditure when P = $5?

Correct AnswerverifiedShow Answer

As one moves down along a linear demand curve (i.e. ,from high-price,low-quantity combinations to low-price,high-quantity combinations) ,the price elasticity of demand becomes

Correct AnswerverifiedShow Answer

Beth has $20 to spend on apples and bananas.Apples cost $3 per kilogram and bananas cost $2 per kilogram.Using A to represent the quantity of apples and B to represent the quantity of bananas,Beth's budget constraint can be written as

Correct AnswerverifiedShow Answer

If Karen's marginal utility from her 13^th pair of shoes is 15,then the marginal utility from her 14^th pair is likely to be

Correct Answer
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