Question 1

Which of the following is true about consumer spending over time?

Accepted Answer

A)  Spending habits do not change. 
B)  Spending habits show no consistent pattern. 
C)  Spending habits are likely to change when new products enter the market. 
D)  Spending habits change monthly. 
A)  Spending habits do not change. 
B)  Spending habits show no consistent pattern. 
C)  Spending habits are likely to change when new products enter the market. 
D)  Spending habits change monthly.

Question 2

The downward slope of the demand curve is related to the:

Accepted Answer

A)  Law of diminishing total returns. 
B)  Law of diminishing marginal utility. 
C)  Upward sloping supply curve. 
D)  Opportunity cost of producing the gooD. 
A)  Law of diminishing total returns. 
B)  Law of diminishing marginal utility. 
C)  Upward sloping supply curve. 
D)  Opportunity cost of producing the gooD.

Question 3

The market demand curve is calculated by:

Accepted Answer

A)  Summing the price from individual demand curves. 
B)  Averaging the price demanded from individual demand curves. 
C)  Summing the quantities demanded from individual demand curves. 
D)  Averaging the quantities demanded from individual demand curves. 
A)  Summing the price from individual demand curves. 
B)  Averaging the price demanded from individual demand curves. 
C)  Summing the quantities demanded from individual demand curves. 
D)  Averaging the quantities demanded from individual demand curves.

Question 4

If the price elasticity of demand for Baja Fresh tacos is 2.5,then Baja Fresh can:

Accepted Answer

A)  Reduce the price of tacos by 25 percent and total revenue will remain the same. 
B)  Raise the price of tacos and total revenue will increase. 
C)  Reduce the price of tacos by less than 25 percent and total sales will remain the same. 
D)  Reduce the price of tacos and total revenue will increase. 
A)  Reduce the price of tacos by 25 percent and total revenue will remain the same. 
B)  Raise the price of tacos and total revenue will increase. 
C)  Reduce the price of tacos by less than 25 percent and total sales will remain the same. 
D)  Reduce the price of tacos and total revenue will increase.

Question 5

Demand is the desire to purchase a particular good even if you cannot pay for it.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is most likely to be elastic with respect to demand?

Accepted Answer

A)  Cigarettes. 
B)  Shoes. 
C)  Gasoline in the short run. 
D)  Airline travel in the long run. 
A)  Cigarettes. 
B)  Shoes. 
C)  Gasoline in the short run. 
D)  Airline travel in the long run.

Question 7

A price cut will increase the total revenue a firm receives,ceteris paribus,only if the demand for its product is:

Accepted Answer

A)  Elastic. 
B)  Inelastic. 
C)  Unitary elastic. 
D)  Perfectly inelastic . 
A)  Elastic. 
B)  Inelastic. 
C)  Unitary elastic. 
D)  Perfectly inelastic .

Question 8

Ceteris paribus,a price decrease will cause total revenue to decrease for a firm,if the demand for its product is:

Accepted Answer

A)  Unitary elastic. 
B)  Inelastic. 
C)  Elastic. 
D)  Increasing rapidly. 
A)  Unitary elastic. 
B)  Inelastic. 
C)  Elastic. 
D)  Increasing rapidly.

Question 9

Which one of the following generalizations is NOT correct?

Accepted Answer

A)  The demand for luxury goods is relatively elastic. 
B)  The demand for necessities is relatively elastic. 
C)  The greater the availability of substitutes,the higher the price elasticity of demand. 
D)  The higher the price of an item is as compared to a consumer's income the higher the elasticity of demanD. 
A)  The demand for luxury goods is relatively elastic. 
B)  The demand for necessities is relatively elastic. 
C)  The greater the availability of substitutes,the higher the price elasticity of demand. 
D)  The higher the price of an item is as compared to a consumer's income the higher the elasticity of demanD.

Question 10

Table 4.1 - Utility schedule
Complete the table and then use the information to answer the question(s)below.  
-In Table 4.1,diminishing marginal utility occurs:

Accepted Answer

A)  With the second and fourth units only. 
B)  With the first and third units only. 
C)  Only with the second unit. 
D)  With all of the units after the first. 
A)  With the second and fourth units only. 
B)  With the first and third units only. 
C)  Only with the second unit. 
D)  With all of the units after the first.

Question 11

The second largest portion of the average U.S.consumer's dollar is spent on:

Accepted Answer

A)  Transportation. 
B)  Housing. 
C)  Insurance and pensions. 
D)  FooD. 
A)  Transportation. 
B)  Housing. 
C)  Insurance and pensions. 
D)  FooD.

Question 12

By which of the following means can the university reduce the size of the crowd at its' football game and simultaneously earn more revenue to finance a new stadium?

Accepted Answer

A)  By raising ticket prices when demand for tickets is inelastic. 
B)  By raising ticket prices when demand for tickets is elastic. 
C)  By lowering ticket prices when demand for tickets is inelastic. 
D)  By lowering ticket prices when demand for tickets is elastic. 
A)  By raising ticket prices when demand for tickets is inelastic. 
B)  By raising ticket prices when demand for tickets is elastic. 
C)  By lowering ticket prices when demand for tickets is inelastic. 
D)  By lowering ticket prices when demand for tickets is elastic.

Question 13

The law of demand states that:

Accepted Answer

A)  The greater the number of buyers in a marker,the lower the price. 
B)  Price and quantity demanded are directly related. 
C)  The lower the cost the lower the price. 
D)  Price and quantity demanded are inversely relateD. 
A)  The greater the number of buyers in a marker,the lower the price. 
B)  Price and quantity demanded are directly related. 
C)  The lower the cost the lower the price. 
D)  Price and quantity demanded are inversely relateD.

Question 14

Which of the following statements is NOT correct?

Accepted Answer

A)  If demand is unitary elastic an increase in the price of a good will not change total revenue. 
B)  If demand is elastic a higher price will actually decrease total revenue. 
C)  Total revenue will fall if consumer's response to a price cut is large. 
D)  If the relative change in price is greater than the relative change in the quantity demanded associated with it,demand is inelastic. 
A)  If demand is unitary elastic an increase in the price of a good will not change total revenue. 
B)  If demand is elastic a higher price will actually decrease total revenue. 
C)  Total revenue will fall if consumer's response to a price cut is large. 
D)  If the relative change in price is greater than the relative change in the quantity demanded associated with it,demand is inelastic.

Question 15

Ceteris paribus,a demand curve shows the:

Accepted Answer

A)  Quantity of a good that producers are willing to bring to market. 
B)  Prices a consumer and producer can both agree upon. 
C)  Quantity of a good consumers are willing and able to purchase at alternative prices. 
D)  Change in quantity demanded divided by the change in price. 
A)  Quantity of a good that producers are willing to bring to market. 
B)  Prices a consumer and producer can both agree upon. 
C)  Quantity of a good consumers are willing and able to purchase at alternative prices. 
D)  Change in quantity demanded divided by the change in price.

Question 16

If a firm finds that it can sell 20,000 units at a price of $5 per unit and 25,000 units at a price of $4 per unit then demand in this price range is:

Accepted Answer

A)  Elastic. 
B)  Inelastic. 
C)  Unitary elastic. 
D)  Cannot be determined with the information given. 
A)  Elastic. 
B)  Inelastic. 
C)  Unitary elastic. 
D)  Cannot be determined with the information given.

Question 17

Suppose the price elasticity of demand for tacos is 0.80.If the price of tacos increases by 10 percent,then the quantity demanded of tacos should,ceteris paribus:

Accepted Answer

A)  Decrease by 8 percent. 
B)  Increase by 8 percent. 
C)  Decrease by 1.25 percent. 
D)  Increase by 1. 
A)  Decrease by 8 percent. 
B)  Increase by 8 percent. 
C)  Decrease by 1.25 percent. 
D)  Increase by 1.

Which of the following is true about consumer spending over time?

The downward slope of the demand curve is related to the:

The market demand curve is calculated by:

If the price elasticity of demand for Baja Fresh tacos is 2.5,then Baja Fresh can:

Demand is the desire to purchase a particular good even if you cannot pay for it.

Which of the following is most likely to be elastic with respect to demand?

A price cut will increase the total revenue a firm receives,ceteris paribus,only if the demand for its product is:

Ceteris paribus,a price decrease will cause total revenue to decrease for a firm,if the demand for its product is:

Which one of the following generalizations is NOT correct?

Table 4.1 - Utility schedule Complete the table and then use the information to answer the question(s)below. -In Table 4.1,diminishing marginal utility occurs:

The second largest portion of the average U.S.consumer's dollar is spent on:

By which of the following means can the university reduce the size of the crowd at its' football game and simultaneously earn more revenue to finance a new stadium?

The law of demand states that:

Which of the following statements is NOT correct?

Ceteris paribus,a demand curve shows the:

If a firm finds that it can sell 20,000 units at a price of $5 per unit and 25,000 units at a price of $4 per unit then demand in this price range is:

Suppose the price elasticity of demand for tacos is 0.80.If the price of tacos increases by 10 percent,then the quantity demanded of tacos should,ceteris paribus:

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

Which of the following is true about consumer spending over time?

The downward slope of the demand curve is related to the:

The market demand curve is calculated by:

If the price elasticity of demand for Baja Fresh tacos is 2.5,then Baja Fresh can:

Demand is the desire to purchase a particular good even if you cannot pay for it.

Which of the following is most likely to be elastic with respect to demand?

A price cut will increase the total revenue a firm receives,ceteris paribus,only if the demand for its product is:

Ceteris paribus,a price decrease will cause total revenue to decrease for a firm,if the demand for its product is:

Which one of the following generalizations is NOT correct?

Table 4.1 - Utility schedule Complete the table and then use the information to answer the question(s)below. -In Table 4.1,diminishing marginal utility occurs:

The second largest portion of the average U.S.consumer's dollar is spent on:

By which of the following means can the university reduce the size of the crowd at its' football game and simultaneously earn more revenue to finance a new stadium?

The law of demand states that:

Which of the following statements is NOT correct?

Ceteris paribus,a demand curve shows the:

If a firm finds that it can sell 20,000 units at a price of $5 per unit and 25,000 units at a price of $4 per unit then demand in this price range is:

Suppose the price elasticity of demand for tacos is 0.80.If the price of tacos increases by 10 percent,then the quantity demanded of tacos should,ceteris paribus:

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