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Which of the following is relatively inelastic with respect to demand?


A) A luxury good.
B) A good with few substitutes.
C) A good that is very expensive.
D) A good that is a complement.

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The demand curve is downward sloping because:


A) Producers are willing to supply more of the good only at higher prices.
B) Consumers are willing to buy less of the good only at lower prices.
C) Producers are willing to supply more of the good only at lower prices.
D) Consumers are willing to buy more of the good only at lower prices.

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The law of diminishing marginal utility helps to explain the:


A) Upward sloping supply curve.
B) Equilibrium price.
C) Downward sloping demand curve.
D) Equilibrium quantity of a good in the marketplace.

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Which of the following causes the price elasticity of demand for a good to be more inelastic?


A) A shorter period of time to adjust to a change in price.
B) A higher ratio of price to consumers' income.
C) The availability of many substitutes.
D) The good is a luxury.

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Market demand is the sum of individual consumer demands.

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The response of quantity demanded to price changes is shown by:


A) Price elasticity of demand.
B) The determinants of demand.
C) Opportunity cost.
D) Income elasticity of demanD.

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Table 4.2 - Demand schedule for automobiles The following is a hypothetical demand schedule for automobiles. Table 4.2 - Demand schedule for automobiles The following is a hypothetical demand schedule for automobiles.   -In Table 4.2,what is the total revenue from automobile sales at a price of $24,000 per auto? A)  $12 billion per year. B)  $26 billion per year. C)  $44 billion per year. D)  $48 billion per year. -In Table 4.2,what is the total revenue from automobile sales at a price of $24,000 per auto?


A) $12 billion per year.
B) $26 billion per year.
C) $44 billion per year.
D) $48 billion per year.

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The law of demand explains why people:


A) Crave certain goods.
B) Are willing to buy more of a good as price falls.
C) Are willing to pay more as marginal utility diminishes.
D) Are able to buy more of a good as supply increases.

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Ceteris paribus,the price elasticity of demand for a good with many substitutes is likely to be inelastic.

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What effect will each of the following have on the demand for hybrid automobiles? a)The price of gasoline goes up. b)The price of large automobiles rises. c)Hybrid autos become more fashionable. d)Consumers anticipate that the price of hybrids will come down in the future. e)Consumers incomes decline and hybrids are less expensive to buy and maintain. f)A news report claims that hybrid are unsafe.

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a)Other goods;the desire for more fuel e...

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The demand for _______ is relatively inelastic.


A) New cars
B) TVs
C) Gasoline in the short run
D) Airline travel

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Table 4.2 - Demand schedule for automobiles The following is a hypothetical demand schedule for automobiles. Table 4.2 - Demand schedule for automobiles The following is a hypothetical demand schedule for automobiles.   -In Table 4.2,what is the total revenue from automobile sales at a price of $20,000 per auto? A)  $80 billion per year. B)  $40 billion per year. C)  $24 billion per year. D)  $20 billion per year. -In Table 4.2,what is the total revenue from automobile sales at a price of $20,000 per auto?


A) $80 billion per year.
B) $40 billion per year.
C) $24 billion per year.
D) $20 billion per year.

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The assumption of ceteris paribus is important because it:


A) Allows us to focus on the effects of a change in one variable at a time.
B) Explains the concept of diminishing marginal utility.
C) Determines the point where total utility is maximized.
D) Explains the reason for government failure.

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In economic theory,utility refers to the:


A) Additional satisfaction obtained from one more unit of a good or service.
B) Satisfaction obtained from a good or service.
C) Willingness to buy specific quantities of a good or service at a particular price.
D) Decrease in satisfaction as more of a good or service is consumeD.

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At a point of diminishing marginal utility,marginal utility begins to decline as consumption increases.

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Ceteris paribus,an increase in price will increase total revenue if the price elasticity of demand is 1.3.

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Maximum total utility is achieved where:


A) Total revenue equals zero.
B) The price elasticity of demand is 1.0.
C) Marginal utility equals zero.
D) Marginal revenue equals zero.

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Suppose Suzuki increases the price of a particular motorcycle model by 12 percent and as a result the quantity demanded for that model decreases by 4 percent.The price elasticity of demand for that model is:


A) 0.33.
B) 3.0.
C) 4.0.
D) 12.

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Total utility is the additional satisfaction received from consuming one more unit.

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If marginal utility is negative,then:


A) Total utility is at a minimum.
B) Total utility will increase with additional consumption.
C) Total utility will decrease with additional consumption.
D) The good in question is an inferior gooD.

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