Econ Chp.5
Suppose there is a fall in the price of a good from $60 to half the price, the quantity demanded increases from x to 3x units, and the price elasticity of demand is 4. Now suppose there is an increase in the price of a good from $30 to double its price and the price elasticity is 0.67.
1.5; arc elasticity
Which of the following is not a possible reason for a change in the demand curve of Zee decorative lightfixture, from DD to DD'?
The change in the rate of sales tax
Given the prices and budget, which of the following commodities would any rational consumer purchase?
The commodity that best suits the consumer's tastes and preferences and maximizes satisfaction
Kat is willing to pay $900 for 25 bottles of grape wine. The market price of 15 bottles of grape wine is $390. Because of an increase in the price of grapes, the price of grape wine increases to $450 for 15 bottles. Kat's consumer surplus has ▼ increaseddecreasedremained unchanged by $nothing because of an increase in the price of grapes. (Enter your response as a whole number.)
25;185
Suppose there are three goods: A, B, and C. The price of good A is $5, the price of good B is $10, and the price of good C is $20. The total budget of the consumer is $75. The total benefit from different quantities of each good is shown in the table below.
5,3,1; $378
In the diagram on the right, the consumer surplus in the market is represented by area ▼ C A B .
A
how does a consumer's budget set differ from his budget constraint?
A budget set refers to all of the possible bundles of goods and services a consumer can purchase, while a budget constraint is limited to the bundles he can purchase using all of his income.
An increase in a fuel tax would cause ▼ an increase no significant change a decrease in demand for automobiles, and the cross-price elasticity would be ▼ positive negative zero .
A decrease Negative
Suppose there is an increase in demand for public transportation because of an increase in the price of automobiles. Which of the following is a possible reason for this elastic demand for automobiles? (Check all that apply.)
A large share of a consumer's budget is spent on automobiles There is a close availability of substitutes for automobiles
According to economists, the process of optimal decision making by consumers typically yields total benefits well above the amount paid for the goods. These market-created benefits are referred to as ▼ consumer surplusconsumer bonus buyer gain, and using the graph to the right, are represented by area
Consumer surplus; A
Due to changes in the government's foreign policy, there is a 15% increase in the prices of laptops imported from other countries while there is a 5% decrease in the prices of similar, domestically produced laptops. Which of the following statements is not true about the consumer's choice?
Consumers will prefer the domestically produced laptops over the imported laptops
what is her income elasticity of demand for food?
Exactly 1
what is her cross-price elasticity of demand for food with respect to the price of clothing?
Exactly zero
A decrease in a consumer's income causes her budget constraint to encompass_______ bundles
Fewer
Suppose now that the market price falls. According to the graph, the excess of total benefits over the total amount spent by consumers will ▼ not change increase decrease .
Increase
charley spends all of his income onset drinks and pizza. suppose he is currently buying these products in amounts such that his marginal benefit from an additional soft drink is $170 and his marginal benefit from an additional slice of pizza is $60. If the price of a soft drink is $2 and the price of a slice of pizza is $5, is charley maximizing his total benefits.
No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits
A budget constraint for t-shirts and movie tickets is shown in the graph. If the price of either the t-shirt or the movie ticket decreases, the budget constraint:
Pivots outward and the slope changes
Which of the following shows the arc elasticity method of calculating the price elasticity of demand?
Q2-Q1/(Q2+Q1)/2 /P2-P1/(P2+P1)/2
Richa wants to purchase 6 fluorescent light bulbs at a price of $30 per bulb. When the price of fluorescent light bulbs rises to $36, she purchases 5 bulbs. Which of the following could be the reason for Richa's change in the quantity purchased?
The opportunity cost of fluorescent light bulbs increases
in figure B the change shown was caused by____
an increase in the consumer's income
Consider the following pair of figures where the dark blue line is the original budget line for a consumer and the light blue line is the new one. In figure A the change shown was caused by____
an increase in the price of good X
A negative income elasticity would indicate ▼ a luxury a normal an inferior good. If your income increased 10% and your demand for diamond jewelry increased 15%, diamond jewelry would be considered ▼ a luxury a normal an inferior good.
an inferior a luxury
Noreen consumes two goods, food and clothing. The price of food is $7, the price of clothing is $14, and her income is $2,000. Noreen always spends 50 percent of her income on food regardless of the price of food, the price of clothing, or her income. What is her price elasticity of demand for food?
exactly 1
A consumer's budget constraint refers to the collection of all possible bundles that ___________.
exactly exhaust a consumer's entire budget
nick buys 2 light bulbs at a price of $4.50. The quantity of light bulbs demanded increases or decreases by 1 for every decrease and/or increase in the price by %1.50. Show the following demand curve with the help of a graph
https://imgur.com/sy31u1c
For a consumer with a given level of income, the combinations of goods for the budget constraint will be_____ than for the budget
lower
