Introduction to Microeconomics Module 5

When​ optimizing, the marginal benefit a buyer gained from the last dollar spent on a sweater was ​$7.50​, and the price of a pair of jeans was ​$86. The marginal benefit gained from the last dollar spent on a pair of jeans is _____

$7.50

Which of the following best describes why consumers are price​ takers? A. If consumers​ don't pay the price​ asked, the store will just sell the product to someone else. B. Consumers​ don't know what it costs to make most products. C. Many individuals lack the skills to negotiate prices. D. Individual transactions are too small to have much impact on the market price.

Individual transactions are too small to have much impact on the market price.

Anna Jones estimated the price elasticity of demand for new vehicles to be 0.78. If the price of cars increased by 20​%, one would expect the quantity of new cars demanded to ▼ increase decrease by _____​%. ​(Enter your response rounded to two decimal​ places.)

decrease, 15.6%

The value of the​ cross-price elasticity between tea and coffee is

positive

John is a soda drinker that likes both Coke and Pepsi. He usually picks whichever has the best price or is most convenient. If Pepsi is on sale for ​$1 a liter and Coke is charging ​$1.50 for the​ same, John's demand curve for Coke will​ experience:

a. a left shift​ (inward).

A​ consumer's budget constraint refers to the collection of all possible bundles that​ ___________. A. exactly exhaust a consumer's entire budget. B. give the consumer the same degree of satisfaction. C. a consumer finds suitable for possible purchase. D. a consumer can purchase with her income.

a. exactly exhaust a consumer's entire budget.

The budget constraint shifts outward when​ _________. A. the price of both goods decreases. B. tastes and preferences change toward cheaper goods. C. the opportunity cost of any one good changes. D. the income of the consumer decreases.

a. the price of both goods decreases

Which of the following are necessary ingredients to the​ buyer's problem? ​(Check all that apply​.) A. ​Consumer's tastes and preferences. B. ​Consumer's ability to discern product usefulness. C. Employment status of the consumer. D. Prices of goods and services. E. Amount of money the consumer has to spend

a. ​Consumer's tastes and preferences. d. Prices of goods and services. e. Amount of money the consumer has to spend

Combinations of apples and loaves of bread that a consumer could purchase would represent a ▼ budget constraint budget set while a ▼ budget constraint budget set represents the amount of apples and bread that a consumer could choose using his or her entire budget.

budget set, budget constraint

the demand curve graphs a consumers responsiveness to a change in ▼ perceived value price . The points on the curve can be verified through _____

price, marginal analysis

Mary saw a bangle bracelet at an accessories shop that she liked and told her friend Susan that the most she would pay for it was ​$42.50. When she found out the price was ​$20.50​, she immediately bought it and gained ​$___ in consumer surplus. ​(Enter your response rounded to two decimal places​) If Mary was to buy another bangle​ bracelet, her additional consumer surplus would ▼ decrease increase .

she gained $22.00 decrease

If a​ cross-price elasticity is​ positive, then the two goods are ▼ substitutes complements . If the price of coffee goes​ up, and as​ such, the demand for Coffee Mate​ decreases, this would indicate a ▼ positive negative ​cross-price elasticity and that the two goods are ▼ complements substitutes

substitutes, negative, compliments

All of the following are elasticity​ measures, except: A. ​cross-price elasticity of demand. B. income elasticity of demand. C. price elasticity of demand. D. behavioral elasticity of demand.

d. behavioral elasticity of demand

Consumer surplus is based on which of the following economic​ theories? A. Marginal benefits only B. Marginal costs only c. Marginal analysis .D. Total benefits

c. Marginal analysis

Which of the following criteria would most likely influence an optimizing​ buyer's purchasing​ decisions? A. lowest price B. lowest opportunity cost C. highest marginal benefit per dollar spent D. highest marginal benefit

c. highest marginal benefit per dollar spent

The demand curve shows​ ___________. A. how the quantity demanded responds to changes in​ consumers' income. B. the possible bundles of goods that can be purchased with a​ consumer's income. C. how the quantity demanded responds to changes in the price of the good. D. what goods you like compared to other goods and services

c. how the quantity demanded responds to changes in the price of the good.

The budget constraint pivots outward when​ _________. A. tastes and preferences change toward cheaper goods. B. the income of the consumer decreases. C. the opportunity cost of any one good changes. D. the price of both goods decreases.

c. the opportunity cost of any one good changes

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 surplus

Charley spends all of his income on soft drinks and pizza. Suppose he is currently buying these products in amounts such that his marginal benefit from an additional soft drink is $ 150 and his marginal benefit from an additional slice of pizza is $ 90. If the price of a soft drink is $ 4 and the price of a slice of pizza is $ 3​, is Charley maximizing his total​ benefits? A. ​No, he should increase his consumption of both goods. Your answer is not correct.B. ​No, he should shift consumption toward pizza and away from soft drinks to maximize total benefits. C. ​Yes, there is no other consumption choice that will make his total benefits greater. D. ​No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits.

d. No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits.

Everything else the​ same, as the price of the good​ increases, quantity demanded ____

decreases

An​ individual's willingness to pay measured over different quantities of the same good define the ▼ demand curve quantity demanded . If the retail price of the good​ increases, the ▼ quantity demanded demand curve will​ decrease, all other things constant.

demand curve, quantity demanded

If an individual only consumes goods X and Y and is currently maximizing her total​ benefits, which of the following must be​ true? A. No other consumption choice can make total benefits greater. B. The​ "equal bang for the​ buck" rule is adhered to. C. The marginal benefits per dollar spent are the same for both goods. D. MB Subscript Upper X divided by Upper P Subscript Upper X equals MB Subscript Upper Y divided by Upper P Subscript Upper Y. E. All of the above.

e. all of the above

An increase in a​ consumer's income causes her budget constraint to encompass ▼ fewer more bundles

more