A)the law of dimishing marginal utility implies that
1. people will consume a variety of goods rather than just one good
2.the demand for all goods will be elastic
3.the demand for all goods will be inelastic
4.people become worse off as they consume more
B)
1.the more sensitive people are to change in price, the
1.greate a change in price must be to induce a certain in quantity demanded
2.greater the price elasticity of demand
3.less the price elasticity of demand
4.less the income elasticity of demand
C)
a price increase will cause a relatively large drop in quantiy demanded when
1.demand is perfectly inelastic
2.there is very little time allowed for consumers to react
3.the consumer has easy access to a number of subsititue goods
4.the price elasticity of demand is 0
D)
dimishing marginal utility means that
1.as more and more of a good is consumed the rate at which total utility increases starts to dimish
2.as more and more of a good is consumed the rate at which total utility increases stays the same
3.as more and more of a good is consumed the rate at which total utility increases starts to increase
4.as more and more of a good is consumed tehre is no impact on the rate of change of total utility.
E)
1.if the price of a cola increased by 16% and consumers responded by purchasing 20% less cola, the price elasticity of demand for cola would be
1. 0,16
2. 0.80
3. 1.25
4. 1.80
F)
if consumers respond to a car dealers 10 percent price cut by increasing the number of cars demanded by 20 percent we would conclude that
1.that demand for cars is inelastic
2.that the price elasticity of demand is 2
3.that the price elasticity of demand is 0.5
4.that the car dealer lost sales revenues as a result of the price cut.
G)
the price elasticity of demand is affected by
1.the costs of producing the good
2.the wages paid to workers who provide the service or produce the good
3.the number of substitutes consumers can find for the good
4.the transportation costs of getting the good to market
H)
which one of the following would make the demand for airline travel relatively elastic?
1.a reliable network of long-distance high speed trains is established
2.there is a widespread reduction in airline fares
3.airline employees grant wage concessions in an attempt to cut operating costs
4.budget cuts for highway maintanance lead to a deterioration of interstate freeway system
I)
an electric utility announced an increase in rates for residential customers. the announcement contained a statement saying that customers couldconserve their energy usage and likely would not see any increase their total monthy electric bill. what is the impliction of this statement?
1.that the demand for electricity is perfectly elastic
that the demand for electricity is elastic within the range of rate increase
that the demand for electricity is nelastic within the range of the rate increase
that the demand for electricity is unit elastic within the range of the rate increase
J) generally, toothpaste is a small party of a conumers income and is a necessity. therefore for toothpaste
1.is elastic
2.is inelastic
3.is unit elastic
4.is perfectly elastic
K)if the elasticity of demand for paperback books is 1.7 in the range between 6$ and 8$, what happens to total consumer expenditures on paperback books when the price rises from 6$ to 8$?
1.total consumer expenditures will increase
2.total consumer expenditres will decrease
2.total consuemr expenditures will remain unchanged
4.we cannot determine what wil happend to total consumers expendtures unless we also know something about the publihser costs.