micro quizzes
Last week, Michelle spent $30$30 on caviar. Today, Michelle still spends $30$30 on caviar even though its price has doubled. What is Michelle's price elasticity of demand for caviar?
1
Which of the following is not a demand shifter? a)The price of the product. b)The price of a complementary good. c)The number of buyers in the market. d)The price of a substitute good.
a)The price of the product.
The cost of your favorite coffee is $6.50 per cup at the coffee shop. The marginal cost of each cup you drink is _____. The first cup of coffee you drink gives you a marginal benefit of $8. The marginal benefit from the second cup is $6, $4 from the third, $2 from the fourth, and $0 from the fifth. You should drink _____ cups of coffee. a)$6.50; one b)$6.50; five c)$0; five b)$1; six
a)$6.50; one
The price of product A is cut by 50%. As a result, the quantity demanded of product B rises by 50%. The cross-price elasticity of demand between product A and product B is _____, and they are _____. a)-1; complements b)-1.25; complements c)1.25; complements d)-0.75; complements
a)-1; complements
Each month Jamie buys exactly 15 McWraps, regardless of the price. Jamie's price elasticity of demand for McWraps is: a)0. b)1. c)greater than 1. d)less than 1 but greater than 0.
a)0.
Economics is the study of: a)Choices and decisions under scarcity. b)Why people want things they can't have. c)How to make as much money as possible.
a)Choices and decisions under scarcity.
Which of the following statements is true? a)Every person, no matter how rich or poor, is faced with situations that require trade-offs. b)Economics studies the trade-offs we are forced to make because resources are unlimited. c)Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as with a stock clearance sale.
a)Every person, no matter how rich or poor, is faced with situations that require trade-offs.
How is the economic surplus generated by a decision calculated? a)It is the total benefits minus total costs arising from the decision. b)It is the total benefits plus total costs arising from the decision. c)It is the sum of benefits arising from the decision. d)It is the sum of costs arising from the decision.
a)It is the total benefits minus total costs arising from the decision.
Which of the statements is NOT a reason why economists still consider their models valid, in spite of the irrationality of people? a)The existing models have been in place for so long, they are considered untouchable, the equivalent of an economic law. b)Models are made to simplify understanding, and irrational behavior is more difficult to generalize. c)People typically behave rationally in general. d)Despite the flaws, the models are still fairly accurate at predicting behavior.
a)The existing models have been in place for so long, they are considered untouchable, the equivalent of an economic law.
You are the manager of Frito-Lay's Cheese Puffs account, and you notice that when the price of Cheetos increases, there is an increase in demand for Cheese Puffs. What is the economic relationship between these goods that explains this behavior? a)The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are substitutes. b)The increase in the price of Cheetos causes a decrease in the demand for Cheetos; therefore, these goods are substitutes. c)The increase in the price of Cheetos causes a decrease in the demand for Cheese Puffs; therefore. these goods are complements. d)The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are complements.
a)The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are substitutes.
Why are supply curves typically upward-sloping? a)They slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services. b)They slope upward due to the law of demand. c)They slope upward because sellers demand more when prices are lower. d)They slope upward because sellers prefer to sell more when prices are lower.
a)They slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services.
Economists use money equivalents to compare costs and benefits because money is a)a common measuring stick. b)what economic agents are trying to maximize. c)critical to keeping an economy working smoothly. d)what is used to measure opportunity costs.
a)a common measuring stick.
Instead of studying for an additional two hours for the economics final, Leann decides to watch a movie. Leann is making a)a rational decision if her marginal benefit from the movie is greater than her marginal cost. b) a rational decision if her marginal cost from the movie is greater than her marginal benefit. c)a decision based on stated preference, rather than revealed preference. d)an irrational decision because studying is more important than watching a movie. e)a decision that is not on the margin because she will see the entire movie.
a)a rational decision if her marginal benefit from the movie is greater than her marginal cost.
Kathleen Alvarado is binge-watching her favorite show on Netflix. She is trying to decide how many more episodes to watch. Kathleen should continue watching episodes unless the marginal a)benefit of watching another episode is equal to the marginal cost. b)benefit of watching another episode is positive. c)cost of watching another episode is positive. d)benefit of watching another episode exceeds the marginal cost.
a)benefit of watching another episode is equal to the marginal cost.
The Rational Rule for Buyers a)compares the benefit of buying an additional unit of the item to the cost of that item. b)compares the cost of production of an item to the price of the item. c)only applies to buyers who are buying necessities as opposed to luxury items. d)compares the total benefit of all units to the total price of all units purchased.
a)compares the benefit of buying an additional unit of the item to the cost of that item.
The cost-benefit principle states that the full set of _____ should be evaluated when making any choice. a)costs and benefits b)interdependencies c)opportunity costs d)economic surpluses
a)costs and benefits
The price elasticity of demand for snowboarding lessons at Jay Peak resort in Vermont is greater than 1. This means that the demand for snowboarding lessons is _____. a)elastic b)inelastic c)unit-elastic d)perfectly elastic
a)elastic
If the price of herring increases by 8%, and the quantity demanded falls by 20%, demand is _____. This decrease in price will therefore lead to a _____ in total revenue. a)elastic; decrease b)inelastic; increase c)unit-elastic; unchanged d)normal; mismatch
a)elastic; decrease
Marginal utility is the a)extra satisfaction received from consuming one more unit of a product. b) total satisfaction received from consuming a given number of units of a product. c) average satisfaction received from consuming a product. d)satisfaction achieved when a consumer has had enough of a product.
a)extra satisfaction received from consuming one more unit of a product.
When the percentage change in price is greater than the percentage change in quantity demanded, demand is said to be: a)inelastic. b)unit-elastic. c)elastic. d)perfectly inelastic.
a)inelastic.
When faced with a quantity decision, the economic surplus stops increasing when a)marginal benefits equal marginal costs. b)total benefits equal to total costs. c)marginal benefits exceed marginal costs. d)total benefits exceed total costs.
a)marginal benefits equal marginal costs.
Alan Patel is a college student living alone in a campus apartment. He finished cooking dinner when his friends text him to join them at the dining hall on campus for dinner. He now has to decide whether to eat the dinner he prepared or walk to campus to meet his friends at the dining hall. Alan should consider all the following costs when making this decision EXCEPT the a)money spent on the groceries he used to cook dinner. b)time it will take to go meet his friends and walk back. c)value he places on not eating dinner alone. d)amount of money he will spend at the dining hall.
a)money spent on the groceries he used to cook dinner.
Jonathan Mendez is deciding whether to study for his economics exam at a café or go to a concert with friends tonight. The cost of the concert ticket that he purchased yesterday is ____ in his opportunity cost and represents a _____ cost. a)not included; sunk b)not included; financial c)included; nonfinancial id)ncluded; financial
a)not included; sunk
Scarcity results from the fact that: a)people's wants exceed the resources available to satisfy them. b)not all goals are desirable. c)there are no tradeoffs in human decision-making. d)the population keeps growing.
a)people's wants exceed the resources available to satisfy them.
Suppose the price of cupcakes decreases by 5%, and the quantity of cupcakes demanded increases by 15%. Demand for cupcakes is: a)price elastic. b)price inelastic. c)price unit-elastic. d)perfectly price inelastic.
a)price elastic.
If an item is a necessity rather than a luxury, its demand curve will be: a)relatively steep. b)perfectly inelastic. c)perfectly elastic. d)relatively flat.
a)relatively steep.
An individual supply curve is a)the marginal cost curve. b)lower than the marginal cost of producing an item. c)the same as the total market supply curve. d)positively sloped because of technological advancement.
a)the marginal cost curve.
Suppose the percent change in the quantity demanded for water for any price change is zero. The demand curve for water is _____, and the price elasticity of demand is perfectly _____. a)vertical; perfectly inelastic b)vertical; perfectly elastic c)horizontal; perfectly elastic d)horizontal; perfectly inelastic
a)vertical; perfectly inelastic
Economic models do all of the following except a)answer economic questions. b) portray reality in all its details. c)simplify some aspect of economic life. d) make economic ideas explicit and concrete.
b) portray reality in all its details.
It is a beautiful afternoon, and you are considering taking a leisurely stroll through the park. Your alternatives to walking are streaming a movie that you value at $5, taking a nap that you value at $7, or reading a new book that you value at $12. What is the opportunity cost to you of taking the stroll through the park? a)$0 b)$12 c)$5 d)$7
b)$12
If income rises by 10% and the quantity demanded of an item falls by 30%, the income elasticity of demand for this item is: a)0.67. b)-3. c)-0.33. d)0.33.
b)-3.
Which of the following scenarios describes a business that is NOT following the law of supply? a)When the price of car detailing rises, Ermo's Auto Garage hires more workers to do car detailing. b)Automobiles fall in price, and Maria's Autorama Ltd. is now willing to sell more vehicles. c)Delilah is less willing to chauffeur people to the airport when the price of airport rides falls. d)The higher the price of custom-made cakes in the market, the more Manfred is willing to bake and sell cakes.
b)Automobiles fall in price, and Maria's Autorama Ltd. is now willing to sell more vehicles.
_____ is a measure of how much your decision has _____ your well-being. a)Willingness to pay; reduced b)Economic surplus; increased c)Economic surplus; decreased d)Willingness to pay; improved
b)Economic surplus; increased
Which of the following could explain why the demand for table salt is inelastic? a)Salt is a rare commodity. b)Households devote a very small portion of their income to salt purchases. c) Salt is a luxury good. d) Salt is a luxury for high-income consumers but a necessity for low-income consumers.
b)Households devote a very small portion of their income to salt purchases.
Jane goes to an all-you-can-eat restaurant and makes three trips to the buffet. After finishing food from her third trip, she felt sick and throws up. Which of the following economic explanations best matches Jane's situation? a)Jane was charged extra for the third plate at the buffet. b)Jane's marginal benefit from eating the third plate was negative. c)Jane's marginal benefit from her third trip to the buffet was larger than her marginal benefit from her second trip. d)Jane's marginal benefit from eating the third place was positive but less than that of the second plate.
b)Jane's marginal benefit from eating the third plate was negative
In economics, what is meant by "optimal decisions are made at the margin?" a)The idea of the margin is that all economic decisions are made at the very fringes of society. b)The idea of the margin is related to making decisions while thinking about the benefits and costs of small changes in behavior. c)The idea of the margin does not help compare trade-offs and is not relevant to decision-making. d)The concept of the margin was initially developed in 2012 by Professor Marginus; research is still being done on how it can be used for decision-making.
b)The idea of the margin is related to making decisions while thinking about the benefits and costs of small changes in behavior.
The price of coffee at a local coffee shop is $2.50. Cheryl is willing to pay $8 for her first cup of coffee each day. The marginal benefit to her of each additional cup of coffee falls by $2. How many cups of coffee should Cheryl purchase? a)One b)Three c)Four d)Two
b)Three
Suppose the price elasticity of demand for lemons is 1.8. If a fall frost destroys one-third of the nation's lemon crop, how will that affect total revenue from lemons, all other things equal? a)Total revenue will rise. b)Total revenue will fall. c)Total revenue will remain unchanged. d)The information is insufficient to answer the question.
b)Total revenue will fall.
A normal good is: a)a good which is normally purchased by many consumers. b)a good for which higher income causes an increase in demand. c)a good which is only purchased by high-income consumers. d)a good for which higher income causes a decrease in demand.
b)a good for which higher income causes an increase in demand.
An inferior good is a)an item that is purchased by very few people. b)a good whose demand decreases when income rises. c)a good whose demand increases when income rises. d)an item that is only bought by rich people.
b)a good whose demand decreases when income rises.
Utility is a)a measure of how useful a good or service is in acquiring income or wealth for a consumer. b)a measure of consumer satisfaction. c)the contribution of a particular good or service to GDP. d)the amount of money a consumer is willing to pay to gain a given amount of consumption.
b)a measure of consumer satisfaction.
If the price of a good increases by 15%, and quantity demanded changes by 5%, then the price elasticity of demand is equal to: a)0.75. b)approximately 0.33. c)approximately 1.33. d)1.
b)approximately 0.33.
Joshua Murphy is planning on studying late into the night for his economics exam. He is contemplating how many coffees to buy tonight. Joshua should not buy an additional coffee during the evening if the marginal a)cost of purchasing one more coffee is positive. b)benefit of purchasing one more coffee is less than the marginal cost. c)benefit of purchasing one more coffee exceeds the marginal cost. d)benefit of purchasing one more coffee is positive.
b)benefit of purchasing one more coffee is less than the marginal cost.
Price takers a)can control the market prices of the products they sell. b)charge the prevailing prices and do not have any effect on the market price. c)produce only agricultural items in the market. d)set their market prices.
b)charge the prevailing prices and do not have any effect on the market price.
Economists a)measure utility in a laboratory by analyzing the responses of volunteers. b)do not measure utility. It is a hypothetical measure used for modeling behavior. c)use surveys to rate the usefulness of goods and services after they are purchased. d)use data such as prices and purchase information to measure utility.
b)do not measure utility. It is a hypothetical measure used for modeling behavior.
An item has utility for a consumer if it a)has a high price. b)generates enjoyment or satisfaction. c)is scarce. d)is something everyone wants.
b)generates enjoyment or satisfaction.
Milk is an inexpensive good that most would consider a necessity. You would therefore expect its demand to be: a)elastic. b)inelastic. c)unit-elastic. d)driven by the supply price.
b)inelastic.
If an increase in the price of coconut oil brings about an increase in total revenue, then the percent rise in price is _____ in magnitude than the percent decline in quantity demanded. a)equal b)larger c)smaller d)not comparable
b)larger
In general, the long-run price elasticity of demand for a good tends to be _____ the short-run price elasticity of demand for it. a)less than b)larger than c)equal to d)not comparable to
b)larger than
Ivan has inherited his grandmother's 1963 Chevrolet Corvette, which he values at $50,000. He decides that he might be willing to sell it, so he posts it on Craigslist for $55,000. Samantha is interested and willing to pay up to $72,000 for such a car. A voluntary economic exchange _____ between Ivan and Samantha because _____ positive economic surplus from the transaction. a)occurs; only Samantha receives b)occurs; both Ivan and Samantha receive c)does not occur; only Ivan receives d)does not occur; neither Ivan nor Samantha receives
b)occurs; both Ivan and Samantha receive
Harry Watson is an engineering student taking an economics elective in his senior year. He has the option to work as a petroleum engineer or to design rollercoasters after college. He uses concepts learned from his economics course to help with this decision. When he considers the increasing popularity of electronic vehicles and a decrease in demand for petroleum in the future, he is acknowledging the dependencies that exist a)between people or businesses in the same market. b)over time. c)between his own choices. d)between markets.
b)over time.
The interdependence principle states that your best choice today depends on all of the following EXCEPT a)expectations about the future. b)past decisions you have made. c)decisions others are currently making. d)other decisions you are currently making.
b)past decisions you have made.
Taking the absolute value of the income elasticity of demand is incorrect because it would: a)cause the value of the cross-price elasticity of demand to become smaller. b)remove the ability to tell whether the two products have inelastic demand or elastic demand. c)remove the ability to tell whether the product is an inferior good or a normal good. d)cause the value of the cross-price elasticity of demand to become zero.
b)remove the ability to tell whether the two products have inelastic demand or elastic demand.
Opportunity cost arises from the fundamental economic problem of a)interdependence. b)scarcity. c)marginal costs. d)unlimited resources.
b)scarcity.
Scarcity is: a) the benefit people receive from consuming one more good. b)the economic problem of having limited resources to satisfy unlimited wants. c)the economic problem of prices rising over time. d)what people must give up to get something.
b)the economic problem of having limited resources to satisfy unlimited wants.
On a hot sweltering day, you feel thirsty and buy an ice-cold soft drink, which you gulp down. Whether you buy the second drink or not, will depend on a)how you feel about soft drinks. b)the marginal benefit from the second soft drink and if it will outweigh the price of the soft drink. c)the total amount of soft drinks that you have consumed that week. d)the price of the soft drink.
b)the marginal benefit from the second soft drink and if it will outweigh the price of the soft drink.
Consumer surplus is equal to the difference between a)the minimum price a buyer is willing to pay and the market price. b)the maximum price a buyer is willing to pay and the market price. c)the maximum price a seller is willing to accept and the market price. d)the minimum price a seller is willing to accept and the market price.
b)the maximum price a buyer is willing to pay and the market price.
Demand is best described as a)the total satisfaction that consuming a good provides people at different prices. b)the quantity of a good or a service that people are willing and able to purchase at different possible prices. c)the additional satisfaction derived from a quantity of goods and services obtained when income increases. d)the quantity of a good or service that consumers will substitute when the price of a good changes. e)the quantity of a good or a service that people will offer for sale at different possible prices.
b)the quantity of a good or a service that people are willing and able to purchase at different possible prices.
Utility is the measure of a)surplus lost by producers when taxes are introduced to the market. b)the satisfaction a good or service gives to the consumer. c)surplus lost by consumers when taxes are introduced to the market. d)the satisfaction all consumers should receive from consuming a good or service.
b)the satisfaction a good or service gives to the consumer.
Consumer surplus is shown graphically as the area a)under the demand curve and below the market price. b)under the demand curve and above the market price. c)above the supply curve and below the market price. d)above the supply curve and above the market price.
b)under the demand curve and above the market price.
Economists convert costs and benefits into money equivalents by evaluating an individual's a)sunk costs. b)willingness to pay. c)marginal benefits. d)opportunity costs.
b)willingness to pay.
The marginal cost of an additional worker is a)the total cost of all workers hired. b)always equal to the benefit of hiring the additional worker. c)the additional cost of hiring one more worker. d)always equal to the cost from the first worker hired.
c)the additional cost of hiring one more worker.
Economists assume that rational behavior is useful in explaining choices people make a)because irrational people do not make economic choices. b)even though people rarely, if ever, behave in a rational manner. c) even though people may not behave rationally all the time. d)because individuals act rationally all the time in all circumstances.
c) even though people may not behave rationally all the time.
If income rises by 20% and the quantity demanded of an item falls by 20%, the income elasticity of demand for this item is: a)-0.5. b)1. c)-1. d)-2.
c)-1.
Carolyn Bates is a junior in college studying economics. She has created a new software application that applies the four principles of economic decision making to any potential decision that a user faces. She is considering leaving school after this academic year to pursue further development of her app. Carolyn should consider all of the following costs when calculating the opportunity costs of leaving college EXCEPT the a)potential memories from her senior year of college. b)skills she may gain from her final year of economics courses. c)90 credit hours she has already completed for her degree. d)potential future job security from her college degree.
c)90 credit hours she has already completed for her degree
What would you expect to happen to the demand for a luxury good today, if the government announces it will stop taxing that luxury good next year? a)Consumers will stop their consumption of the luxury good altogether. b)There will be no impact on the demand for the luxury good. c)The demand for the luxury good will shift to the left today. d)The demand for the luxury good will shift to the right today.
c)The demand for the luxury good will shift to the left today.
If the price of airline tickets goes up, there will be a)a decrease in the demand for bus tickets, but an increase in the demand for train tickets. b)an increase in the quantity demanded of airline tickets. c)an increase in the demand for both bus and train tickets. d)an increase in the demand for bus tickets, but a decrease in the demand for train tickets.
c)an increase in the demand for both bus and train tickets.
The cost-benefit principle states that a decision should be pursued only if the a)costs are negative. b)costs are greater than the benefits. c)benefits are greater than the costs. d)benefits are positive.
c)benefits are greater than the costs.
The cross-price elasticity of demand measures how responsive the: a)supply of one good is to a change in the price of another good. b)price of a good is to a change in the price of another good. c)demand for one good is to a change in the price of another good. d)demand for one good is to a change in the demand for another good.
c)demand for one good is to a change in the price of another good.
If demand is _____, a higher price yields _____ total revenue. a)elastic; higher b)inelastic; no change in c)elastic; lower d)inelastic; lower
c)elastic; lower
The principle that your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future is known as the _____ principle. a)marginal b)opportunity cost c)interdependence d)cost-benefit
c)interdependence
Holding everything else constant, producers are willing to offer more units for sale when the price at which they can sell their product increases. This concept is known as a)the law of one price. b)maximal output. c)law of supply. d)profit-maximizing condition.
c)law of supply.
Ron is buying jeans online and has to decide how many to buy. He should buy an additional pair if the a)total benefit when purchasing one more pair is less than the total cost of the jeans. b)total benefit when purchasing one more pair is at least as high as the total cost of the jeans. c)marginal benefit of the next pair is at least as high as the price of the jeans. d)marginal benefit of the next pair is less than the price of the jeans.
c)marginal benefit of the next pair is at least as high as the price of the jeans.
Demand for soda outside an airport is more elastic than inside of the airport because: a)necessities have less elastic demand. b)specific brands tend to have more elastic demand than categories of goods. c)more choices makes demand more elastic. d)fewer choices means more elastic demand.
c)more choices makes demand more elastic.
If a certain item has many substitutes, its demand curve will be: a)relatively steep. b)perfectly inelastic. c)relatively flat. d)perfectly elastic.
c)relatively flat.
If a consumer has more time to search for a low-cost alternative for an item, the demand curve for that item will be: a)equal to zero. b)relatively steep. c)relatively more elastic. d)relatively more inelastic.
c)relatively more elastic.
Samia has decided that with the two hours in between classes she can do one of 3 things. She has ranked her choices, from highest to lowest as, (1) chat with her friends, (2) study economics or (3) take a nap. The opportunity cost of chatting with her friends is a)the combined value of studying economics and taking a nap. B)the value of chatting with her friends. c)the value of studying economics, the next best use of time. d) zero since she does not pay her friends to talk to her.
c)the value of studying economics, the next best use of time.
Two products have a cross-price elasticity of demand of 1.5. Based on this value of cross-price elasticity, which of the following products are they most likely to be? a)a brand of juice and a brand of computer b)a brand of hot dog and a brand of hot dog bun c)two competing brands of soft drinks d)a brand of tea and a brand of sugar
c)two competing brands of soft drinks
Dependencies between your own choices reflect the fact that: a)society has limited resources. b)resources can be spread across time. c)you have limited resources. d)resources are spread across varying markets.
c)you have limited resources.
A supply curve (i) plots the quantities a seller is willing to sell at different prices. (ii) shows the total cost to the seller. (iii) shows rising marginal costs. (iv) shows rising fixed costs. a. (i), (ii), (iii), and (iv) b. (i), (ii), and (iii) c. (i) and (iii) d. only (i)
c. (i) and (iii)
In a voluntary economic transaction between a buyer and a seller, _____ can earn economic surplus from the transaction. a)only the seller b)neither the buyer nor the seller c)only the buyer d)both the buyer and the seller
d) both the buyer and the seller
When people make rational choices, they a)behave selfishly. b)do not consider their emotions. c) are necessarily making the best decision. d) weigh the costs and benefits of their options and act to satisfy their wants.
d) weigh the costs and benefits of their options and act to satisfy their wants.
Which of the following scenarios depicts a rational buyer? a)Mary values a bag of salad at $2, but she buys the bag of salad even when the price is $4. B)Darwin buys a can of shoe polish at $4.50 when his marginal benefit from it is $3.75. c)John walks into a grocery store and purchases monthly groceries without paying attention to the prices of groceries. d)Damien chooses to buy a sandwich for $5 when the marginal benefit of the sandwich to him is $7.
d)Damien chooses to buy a sandwich for $5 when the marginal benefit of the sandwich to him is $7.
What do economists mean when they say behavior is "rational"? a)Individuals making choices entirely using logic. b)Individuals making choices that do not harm others. c)Individuals making choices to maximize their wealth. d)Individuals making choices which help them reach their goals. e)Individuals caring more about their own outcomes than others' outcomes.
d)Individuals making choices which help them reach their goals
Why does the demand curve slope downwards? a)It slopes downward due to the positive relationship between price and quantity demanded. b)It slopes downward due to stores lowering the prices on their products. c)It slopes downward due to buyers perceiving fall in price as a fall in quality. d)It slopes downward due to the law of demand.
d)It slopes downward due to the law of demand.
Which of the following scenarios illustrates the law of demand? a)Francis does not care about the price of coffee at the coffee shop - he must buy two cappuccinos every day, regardless of the price. b)A research company finds that the more expensive a particular brand of a designer handbag, the more that consumers are willing to purchase the brand. c)John likes to drink spring water. At $2 he buys four bottles of water, and at $1.50 he still buys four bottles of water. d)Kathleen eats more steak when the price is low, and less when the price is high.
d)Kathleen eats more steak when the price is low, and less when the price is high.
Economists use the phrase "revealed preference" to mean a)What you say you want to do. b)What you would prefer to do if no one was watching. c)What a moral society reveals about what people should do. d)What you actually do when faced with a choice.
d)What you actually do when faced with a choice.
An individual supply curve is a)a graph that plots the quantities of an item that a buyer plans to buy at different prices. b)a graph that plots how much a seller produces at different points in time. c)the quantity a seller is willing to supply at one particular price. d)a graph with quantities of a product that a seller is willing to supply at different price points.
d)a graph with quantities of a product that a seller is willing to supply at different price points.
The price elasticity of demand for an item is impacted by: a)whether or not the item is a necessity. b)the time available to adjust to price changes. c)the number of available substitutes. d)all of these options.
d)all of these options.
Diane Jacobs is a student studying economics and currently working on her class schedule for next semester. When she considers taking another economics course rather than taking a math class in the same time slot, she is acknowledging that dependencies exist a)between markets. b)through time. c)between people or businesses in the same market. d)between her own choices.
d)between her own choices.
Telefon, a wireless communications company, tested the effect of a reduction in the price of its monthly service. Telefon lowered its rate from $36 to $30 per month and found that the number of users tripled. This means that the: a)demand for cell phone service is inelastic in this price range. b)demand curve for cell phone service shifted to the right. c)supply curve for cell phone service shifted to the left. d)demand for cell phone service is elastic in this price range.
d)demand for cell phone service is elastic in this price range.
Diminishing marginal benefit: a)is not important in determining a consumer's purchase decision. b)is when buying an additional item yields a larger marginal benefit than the previous item. c)is when consumers do not follow the rational rule. d)is when buying an additional item yields a smaller marginal benefit than the previous item.
d)is when buying an additional item yields a smaller marginal benefit than the previous item.
Economists assume that people's goals are to a)make as much money as possible. b)do the minimum amount of work needed to survive. c)spend all of their income. d)make themselves as well off as possible.
d)make themselves as well off as possible.
In addition to financial costs and benefits, assessing your willingness to pay allows you to convert _______ costs or benefits into their monetary equivalent. a)macroeconomic b)fictional c)imaginary d)nonfinancial
d)nonfinancial
Decisions should reflect the _____ costs, rather than just the _____ costs. a)opportunity; nonfinancial b)financial; marginal c)nonfinancial; financial d)opportunity; financial
d)opportunity; financial
The opportunity costs of attending college include the: a)cost of clothes to wear at school. b)effort and hard work. c)cost of room and board. d)potential income that could be earned working.
d)potential income that could be earned working.
Rising input costs lead to a)decreased profitability for a seller. b)lower opportunity costs of producing the item. c)increased supply of the item in the market. d)rising marginal costs for a seller.
d)rising marginal costs for a seller.
An individual demand curve is a graph: a)that plots the quantity of an item that someone plans to buy, at one single price point. b)that plots the market price of a product at different points in time. c)that plots the quantity of an item that a seller plans to sell, at each price. d)that plots the quantity of an item that someone plans to buy, at each price.
d)that plots the quantity of an item that someone plans to buy, at each price.
An opportunity cost is a)the dollar amount that is paid b)another term for all the sunk costs c)the revealed preference of the decision-maker's choice d)the benefits of the highest-valued alternative forgone
d)the benefits of the highest-valued alternative forgone
Which factor does NOT determine the price elasticity of demand? a)the number of available substitutes b)the time available to adjust to price changes c)whether or not the good is a necessity d)the slope of the supply curve
d)the slope of the supply curve
An upward-sloping supply curve shows that a)sellers are willing to sell less when the prices are higher in the market. b)there is no relationship between price and quantity supplied. c)there is an inverse relationship between price and quantity supplied. d)there is a positive relationship between price and quantity supplied.
d)there is a positive relationship between price and quantity supplied.
The market supply is the a)sum of all prices that sellers charge for a particular quantity. b)total cost of production of an item for the entire market. c)quantity supplied at each price by one seller. d)total quantity produced by all sellers in the market at each price.
d)total quantity produced by all sellers in the market at each price.
Which demonstrates a scenario with no opportunity cost? a)It's Friday night and you stay up late talking and hanging out with your friends. b)The chemistry club is giving out free pizza for lunch to all who come to their table to get it. c)Naomi, age 8, is at a bookstore and chooses to buy a book about a young wizard instead of buying a math textbook that she would probably never open. d)Chez Moi and Chez Nous, two premiere French restaurants with three Michelin stars, both offer you a full time sous chef job at the same salary. You are ecstatic because you know it is a win-win scenario and choose to work for Chez Nous. e)All of these scenarios have an opportunity cost.
e)All of these scenarios have an opportunity cost.
select the one that fits best: There are limited resources to satisfy all of society's wants: recession business cycle entrepreneurship margins trade-off scarcity
scarcity
select the one that fits the best: Comparing the benefits and costs of engaging in an activity. recession resources scarcity margins trade-off financial capital
trade-off
