The following is Clyde's monthly schedule of how many mini hamburgers he eats, depending upon the price of the hamburger.
Quantity Purchased / Consumed Price Total Utility
5 $5 10 utils
10 $4 20 utils
20 $3 30 utils
35 $2 35 utils
55 $1 35 utils
The price of hamburgers decreases from $3 to $2 during the next month. This represents an elasticity of demand that is between ______.
a) 0 and 1 (inelastic)
b) 1 and 2 (elastic)
c) 2 and 3 (elastic)
d) 3 and 4 (elastic)
The following is Clyde's monthly schedule of how many mini hamburgers he eats, depending upon the price of the hamburger.
Quantity Purchased / Consumed Price Total Utility
5 $5 10 utils
10 $4 20 utils
20 $3 30 utils
35 $2 35 utils
55 $1 35 utils
The price of hamburgers is $5 this month. The total revenue the hamburger seller receives from Clyde this month is ______.
a) $5
b) $10
c) $25
d) $50
If the price of an inferior good decreases, ____________.
a) the substitution effect would lead the consumer to buy more of the good
b) the substitution effect would lead the consumer to buy less of the good
c) the income effect would lead the consumer to buy more of the good
d) it depends; any of the above may or may not occur
The following is Clyde's monthly schedule of how many mini hamburgers he eats, depending upon the price of the hamburger.
Quantity Purchased / Consumed Price Total Utility
5 $5 10 utils
10 $4 20 utils
20 $3 30 utils
35 $2 35 utils
55 $1 35 utils
Clyde reaches the satiation point if ______.
a) he consumes 10 hamburgers during the month
b) he consumes 20 hamburgers during the month
c) he consumes 35 hamburgers during the month
d) he consumes 55 hamburgers during the month
Kaiden buys chocolate and donuts, which are both normal goods. When the price of chocolate rises, the substitution effect tells Kaiden to buy ____________.
a) more chocolate and less donuts
b) less chocolate and less donuts
c) less chocolate and more donuts
d) more chocolate and more donuts
The rule of utility maximization states, "To maximize utility, a consumer adjusts spending until _________."
a) the total utility from the last dollar spent on each good is the same
b) the marginal utility from the last dollar spent on each good is the same
c) the total utility from each good is the same
d) the marginal utility from the last unit of each good is the same
Economists often use "marginal analysis" in making decisions. Marginal refers to _________.
a) a shift in a curve
b) an incremental change
c) a movement along a curve
d) the total amount
Which of the following might influence a person's marginal utility and thus their choices?
a) product information they read
b) addictive tendencies
c) advertising
d) all of the above
In Mexico, it takes 3 days to produce a bulldozer and 12 days to produce an airplane. In Brazil, it takes 2 days to produce a bulldozer and 10 days to produce an airplane. The opportunity cost of producing an airplane is lower in ________.
a) Mexico
b) Brazil
c) neither; it is the same in both countries
d) either; it depends upon the elasticity of demand for airplanes
If the elasticity of demand equals 1, ____________.
a) the quantity demanded changes proportionally to changes in price
b) the quantity demanded is relatively unresponsive to price
c) the quantity demanded is relatively responsive to price
d) the quantity demanded is unrelated to price
Katie has a lemonade stand. She is currently charging 50 cents for a glass of lemonade. If the price elasticity of demand is 1.5, which of the following statements is true?
a) If Katie raises her price, she will not lose very many new customers, and her total revenue will increase.
b) If Katie raises her price, she will lose a lot of customers, and her total revenue will decrease.
c) If Katie lowers her price, she will not get very many new customers, and her total revenue will decrease.
d) none of the above
The reason the midpoint formula is used to calculate a percent change for elasticity is that with the midpoint formula ___________.
a) elasticity is independent of the direction in which variables are changing
b) elasticity is always a negative number
c) elasticity is always a number between -1 and 1
d) elasticity is always a number between 0 and 1
Money in the economy today ________.
a) is needed in order for barter to occur
b) is primarily commodity money
c) facilitates the circular flow of economic activity
d) is an economic resource from the input market
Markets are efficient to the extent that they maximize _______.
a) consumer surplus
b) producer surplus
c) social surplus
d) deadweight loss
Scotts income rises by 10%. Due to his higher income, his demand for antique clocks increases by 25%. For Scott, antique clocks are ______ goods.
A. normal ?B. inferior ?C. superior
a) A and B only
b) A and C only
c) B and C only
d) None of the above