Question 1

When the additional satisfaction from a good declines as more of it is consumed,this illustrates the law of:

Accepted Answer

A)  Diminishing marginal utility. 
B)  Exceptional marginal utility. 
C)  Declining demand. 
D)  Increasing opportunity costs. 
A)  Diminishing marginal utility. 
B)  Exceptional marginal utility. 
C)  Declining demand. 
D)  Increasing opportunity costs.

Question 2

If marginal utility is positive,then total utility must be:

Accepted Answer

A)  Decreasing. 
B)  Increasing. 
C)  Zero. 
D)  Less than zero. 
A)  Decreasing. 
B)  Increasing. 
C)  Zero. 
D)  Less than zero.

Question 3

Which of the following causes the market demand curve for a good to shift?

Accepted Answer

A)  The cost of factors of production. 
B)  The number of buyers in the market. 
C)  The innovation in production process. 
D)  A producer's income. 
A)  The cost of factors of production. 
B)  The number of buyers in the market. 
C)  The innovation in production process. 
D)  A producer's income.

Question 4

If the price elasticity of demand is equal to 2.3,then a 1 percent increase in price will result in a 2.3 percent decrease in quantity demanded.

Accepted Answer

A) True 
 B)False

Question 5

Ceteris paribus,an increase in price will most likely decrease total revenue if the price elasticity of demand is 1.8.

Accepted Answer

A) True 
 B)False

Question 6

Marginal utility refers to the:

Accepted Answer

A)  Additional utility from consuming the last unit of a good. 
B)  Change in utility from the last unit consumed. 
C)  Utility derived from consuming all of the good. 
D)  Opportunity cost of the gooD. 
A)  Additional utility from consuming the last unit of a good. 
B)  Change in utility from the last unit consumed. 
C)  Utility derived from consuming all of the good. 
D)  Opportunity cost of the gooD.

Question 7

Ceteris paribus means:

Accepted Answer

A)  Nothing is allowed to change. 
B)  The determinants of demand may change,but all else must be held constant. 
C)  Only one determinant is being changed while all others remain unchanged. 
D)  Consumers try to keep all things constant so that prices will be lower. 
A)  Nothing is allowed to change. 
B)  The determinants of demand may change,but all else must be held constant. 
C)  Only one determinant is being changed while all others remain unchanged. 
D)  Consumers try to keep all things constant so that prices will be lower.

Question 8

Advertising can enhance economic efficiency when it:

Accepted Answer

A)  Exploits our senses and lack of knowledge. 
B)  Encourages us to purchase only brand name merchandise. 
C)  Offers us pictures and promises of exoneration,recognition and love. 
D)  Is intended to provide information about existing products or to bring new products to our attention. 
A)  Exploits our senses and lack of knowledge. 
B)  Encourages us to purchase only brand name merchandise. 
C)  Offers us pictures and promises of exoneration,recognition and love. 
D)  Is intended to provide information about existing products or to bring new products to our attention.

Question 9

If the price elasticity of demand is 1.5,and the prices gone up by 20 percent,the quantity sold will,ceteris paribus:

Accepted Answer

A)  Rise by 13.3 percent. 
B)  Fall by 13.3 percent. 
C)  Rise by 30.0 percent. 
D) Fall by 30.0 percent. 
A)  Rise by 13.3 percent. 
B)  Fall by 13.3 percent. 
C)  Rise by 30.0 percent. 
D) Fall by 30.0 percent.

Question 10

According to the law of diminishing marginal utility:

Accepted Answer

A)  Total utility from consuming a good always rises. 
B)  Total utility from consuming one more unit of a good eventually falls. 
C)  Marginal utility of a good declines as more of it is consumed in a given time period. 
D)  Marginal product of labor declines as more of a variable input is useD. 
A)  Total utility from consuming a good always rises. 
B)  Total utility from consuming one more unit of a good eventually falls. 
C)  Marginal utility of a good declines as more of it is consumed in a given time period. 
D)  Marginal product of labor declines as more of a variable input is useD.

Question 11

Which of the following is true about demand?

Accepted Answer

A)  Demand reflects the desire for a good but not necessarily the ability to buy it. 
B)  In order to demand a good,a person must be willing and able to buy the good. 
C)  When drawing a demand curve,influences such as price do not change. 
D)  Demand reflects the ability to buy a good but not necessarily the desire to do so. 
A)  Demand reflects the desire for a good but not necessarily the ability to buy it. 
B)  In order to demand a good,a person must be willing and able to buy the good. 
C)  When drawing a demand curve,influences such as price do not change. 
D)  Demand reflects the ability to buy a good but not necessarily the desire to do so.

Question 12

Price elasticity of demand indicates the consumer's response to changes in:

Accepted Answer

A)  Quantity. 
B)  Demand. 
C)  Price. 
D)  Supply. 
A)  Quantity. 
B)  Demand. 
C)  Price. 
D)  Supply.

Question 13

Which of the following causes demand to be more elastic with respect to price?

Accepted Answer

A)  Shorter periods of time to adjust to a change in price. 
B)  A higher ratio of price to consumers' income. 
C)  Fewer substitutes. 
D)  A steeper demand curve for a given price and quantity. 
A)  Shorter periods of time to adjust to a change in price. 
B)  A higher ratio of price to consumers' income. 
C)  Fewer substitutes. 
D)  A steeper demand curve for a given price and quantity.

Question 14

Marginal utility is an important economic concept because it:

Accepted Answer

A)  Indicates the budget limitations of the consumer. 
B)  Is the total utility a consumer receives from a good. 
C)  Can be used to predict the amount of a good a rational consumer will purchase. 
D)  Predicts the amount of a good a business will produce. 
A)  Indicates the budget limitations of the consumer. 
B)  Is the total utility a consumer receives from a good. 
C)  Can be used to predict the amount of a good a rational consumer will purchase. 
D)  Predicts the amount of a good a business will produce.

Question 15

Housing and transportation account for the largest portion of the average consumer dollar.

Accepted Answer

A) True 
 B)False

Question 16

For which of the following is the price elasticity of demand most likely to be unitary elastic?

Accepted Answer

A)  Cigarettes. 
B)  Private education. 
C)  New cars. 
D)  Gasoline in the short run. 
A)  Cigarettes. 
B)  Private education. 
C)  New cars. 
D)  Gasoline in the short run.

Question 17

The demand for such items as vacation travel,new cars and HDTV tend to be:

Accepted Answer

A)  Relatively inelastic 
B)  Relatively elastic 
C)  Perfectly inelastic 
D)  Perfectly elastic 
A)  Relatively inelastic 
B)  Relatively elastic 
C)  Perfectly inelastic 
D)  Perfectly elastic

Question 18

The demand is price-inelastic when the percentage change in quantity demanded is greater than the percentage change in price for a particular good.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not a determinant of demand for a good?

Accepted Answer

A)  Tastes or preferences. 
B)  Income. 
C)  Prices of other goods. 
D)  Technological advances. 
A)  Tastes or preferences. 
B)  Income. 
C)  Prices of other goods. 
D)  Technological advances.

Question 20

Which of the following ranks the top three components of U.S.consumption correctly from largest to smallest?

Accepted Answer

A)  Housing,medical care,entertainment. 
B)  Housing,transportation,food. 
C)  Transportation,housing,clothing. 
D)  Transportation,health care,insurance and pensions. 
A)  Housing,medical care,entertainment. 
B)  Housing,transportation,food. 
C)  Transportation,housing,clothing. 
D)  Transportation,health care,insurance and pensions.

When the additional satisfaction from a good declines as more of it is consumed,this illustrates the law of:

If marginal utility is positive,then total utility must be:

Which of the following causes the market demand curve for a good to shift?

If the price elasticity of demand is equal to 2.3,then a 1 percent increase in price will result in a 2.3 percent decrease in quantity demanded.

Ceteris paribus,an increase in price will most likely decrease total revenue if the price elasticity of demand is 1.8.

Marginal utility refers to the:

Ceteris paribus means:

Advertising can enhance economic efficiency when it:

If the price elasticity of demand is 1.5,and the prices gone up by 20 percent,the quantity sold will,ceteris paribus:

According to the law of diminishing marginal utility:

Which of the following is true about demand?

Price elasticity of demand indicates the consumer's response to changes in:

Which of the following causes demand to be more elastic with respect to price?

Marginal utility is an important economic concept because it:

Housing and transportation account for the largest portion of the average consumer dollar.

For which of the following is the price elasticity of demand most likely to be unitary elastic?

The demand for such items as vacation travel,new cars and HDTV tend to be:

The demand is price-inelastic when the percentage change in quantity demanded is greater than the percentage change in price for a particular good.

Which of the following is not a determinant of demand for a good?

Which of the following ranks the top three components of U.S.consumption correctly from largest to smallest?

The Challenge of Economics

The US Economy

Supply and Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Exam 4: Consumer Demand

When the additional satisfaction from a good declines as more of it is consumed,this illustrates the law of:

If marginal utility is positive,then total utility must be:

Which of the following causes the market demand curve for a good to shift?

If the price elasticity of demand is equal to 2.3,then a 1 percent increase in price will result in a 2.3 percent decrease in quantity demanded.

Ceteris paribus,an increase in price will most likely decrease total revenue if the price elasticity of demand is 1.8.

Marginal utility refers to the:

Ceteris paribus means:

Advertising can enhance economic efficiency when it:

If the price elasticity of demand is 1.5,and the prices gone up by 20 percent,the quantity sold will,ceteris paribus:

According to the law of diminishing marginal utility:

Which of the following is true about demand?

Price elasticity of demand indicates the consumer's response to changes in:

Which of the following causes demand to be more elastic with respect to price?

Marginal utility is an important economic concept because it:

Housing and transportation account for the largest portion of the average consumer dollar.

For which of the following is the price elasticity of demand most likely to be unitary elastic?

The demand for such items as vacation travel,new cars and HDTV tend to be:

The demand is price-inelastic when the percentage change in quantity demanded is greater than the percentage change in price for a particular good.

Which of the following is not a determinant of demand for a good?

Which of the following ranks the top three components of U.S.consumption correctly from largest to smallest?

The Challenge of Economics

The US Economy

Supply and Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters