Lesson 6 Quiz (Microeconomics)

Price Quantity Demanded Quantity Supplied $9.5 1 5 9 2 4 8.5 3 3 8 4 2 7.5 5 1 The amount of Consumer Surplus in the table above is ___________ .

$1.50

Assume that you are consuming brownies (cookies) with the following utility function. https://richlandcollege.grtep.com/core/uploadfiles/components/71849/images/lesson05_03.JPG With the consumption of the fourth brownie you gain a marginal utility of ___ utils.

0

These utility concepts can be applied to a decision of what to purchase given utility patterns for two goods as listed in the figure below. If you assume that good R and good S both cost $2 each, how many of each would you purchase if you have an income of $8?

1 r 3 s

Consider the example of an individual in a grocery store examining two cans of peaches, Alpha Peaches and Beta Peaches. If Alpha is thought to provide 6 units of pleasure per dollar and Beta is thought to provide 8 units per dollar, then Alpha should be chosen.

False

Economists do not see any difficulty in measuring pleasure and believe that consumer behavior can be measured perfectly using of marginal values.

False

In the Indifference Diagram above, Points H, I and J represent combinations of consumption for A and B that will yield the same amount of additional pleasure.

False

The utility obtained per unit of consumption will not vary based upon "need at the moment" such as with police or doctor services.

False

Assume you are going to lunch and have a choice of two meals. The first meal would give an increase in marginal utility of 100 with a $25 price. The second meal would give you an increase of only 10 with a $2 price. The third meal will give you an increase of 50 with a $5 price. Which meal should you logically choose ?

Third

Which of the following economists closely analyzed how consumers behave and why ?

Thorstein Veblen Jeremy Benthem William Jevons All the above****

________________ concept of "conspicuous consumption" suggested that consumer behavior is often based on sociology and is, thereby ,difficult to quantify.

Thorstein Veblen's

As we spend more money our total pleasure increases to a maximum point, but with additional increases in spending our marginal utility (additional pleasure) declines.

True

In the field of Marketing the concepts of marginal values and marginal utility per dollar are important ideas for brand comparisons among goods and services.

True

Some individuals receive a high value of utility from not spending all of their income and therefore choose to save a reasonable amount of money.

True

The diminishing marginal utility effect states that as more of an item is consumed and the amount of additional satisfaction decreases, the seller must ________ price to induce the consumer to buy more.

decrease

The Law of Diminishing Returns states that as more units are consumed past some point, _________ additional pleasure will be received.

less