Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

In economic theory,utility refers to the:

Accepted Answer

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.

Question 3

The assumption of ceteris paribus is important because it:

Accepted Answer

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.

Question 4

The demand curve is downward sloping because:

Accepted Answer

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.

Question 5

The law of diminishing marginal utility helps to explain the:

Accepted Answer

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

Question 6

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

Accepted Answer

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

Question 7

Market demand is the sum of individual consumer demands.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

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.

Question 9

The law of demand explains why people:

Accepted Answer

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.

Question 10

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.

Accepted Answer

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

Question 11

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

Accepted Answer

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

Question 12

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?

Accepted Answer

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

Question 13

Maximum total utility is achieved where:

Accepted Answer

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

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

If marginal utility is negative,then:

Accepted Answer

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.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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:

Accepted Answer

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

Question 18

The demand for _______ is relatively inelastic.

Accepted Answer

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

Question 19

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?

Accepted Answer

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

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 4: Consumer Demand

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?

Correct Answer
verified

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

Correct Answer
verified

Maximum total utility is achieved where:

Correct Answer
verified

Market demand is the sum of individual consumer demands.

Correct Answer
verified

If marginal utility is negative,then:

Correct Answer
verified

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

Correct Answer
verified

The law of diminishing marginal utility helps to explain the:

Correct Answer
verified

The demand for _______ is relatively inelastic.

Correct Answer
verified

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

Correct Answer
verified

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:

Correct Answer
verified

The law of demand explains why people:

Correct Answer
verified

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

Correct Answer
verified

The assumption of ceteris paribus is important because it:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The demand curve is downward sloping because:

Correct Answer
verified

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?

Correct Answer
verified

Correct Answer
verified
a)Other goods;the desire for more fuel e...
View Answer

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

Correct Answer
verified

In economic theory,utility refers to the:

Correct Answer
verified

Exam 4: Consumer Demand

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Maximum total utility is achieved where:

Correct AnswerverifiedShow Answer

Market demand is the sum of individual consumer demands.

Correct AnswerverifiedShow Answer

If marginal utility is negative,then:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The law of diminishing marginal utility helps to explain the:

Correct AnswerverifiedShow Answer

The demand for _______ is relatively inelastic.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

The law of demand explains why people:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The assumption of ceteris paribus is important because it:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The demand curve is downward sloping because:

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Correct Answerverifieda)Other goods;the desire for more fuel e...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

In economic theory,utility refers to the:

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
a)Other goods;the desire for more fuel e...
View Answer

Correct Answer
verified

Correct Answer
verified