Unit 2
If consuming one taco yields 34 utils and consuming a second taco increases satisfaction by 25 utils. The marginal utility of the second taco is:
25
If hot dogs are an inferior good, a decrease in income will result in:
An increase in the demand for hot dogs.
The market for soda is shown below. Select which graph option represents the following scenario. The price of bottled water, a substitute, increases.
supply curve shifts to right
Price times quantity measures:
total revenue.
Supply is the different quantities of goods that producers are _____ and ______to sell (produce) at different prices.
willing and able
The market for kumquats is in equilibrium at the price of $17, and quantity of 54 kumquats. If the producer surplus is $310 and total surplus is $523, what is the consumer surplus in the kumquat market? enter just a number
213
A firm estimates that the absolute value of the price elasticity of demand for its signature sandwich is 1.8. If the firm decreases the price by 18 percent, what will percentage change in quantity demanded be? Write you answer as just a number up to two decimal places. Convert all decimals to percentages.
32.4
Which of the following will NOT change the demand for oranges?
A change in the price of oranges.
Assume that the supply for apples is upward sloping. If the price of apples falls from $.80 per pound to $.65 per pound, which of the following will occur?
A smaller quantity of apples will be supplied.
If demand for a product is relatively inelastic which of the following is true?
An increase in price will also lead to an increase in total revenue.
Which of the following events will cause the demand curve for hamburgers to shift to the right?
An increase in the price of pizza, a substitute for hamburgers.
What would you expect to happen to the market equilibrium P and Q for TaylorMade golf clubs if the cost of steel (an input for golf clubs) decreases and consumers' tastes increases?
Decrease and Increase
If the price of a good decreased by 3 percent and the total revenue increases, the demand for the product is considered:
Elastic
Which of the following would cause the demand for good X to decrease?
Good X is an inferior good, and the government decreases income taxes by 15%.
The demand curve for a normal good slopes down for which of the following reasons? I. An increase in the price of the good induces consumers to purchase substitute products. II. An increase in the price of the good increases consumers' utility from consuming that good. III. An increase in the price of the good reduces consumer' purchasing power.
I and III only
If consumers are advised that multigrain bread will substantially lessen the risk of cancer, which of the following will happen in the market for multigrain bread?
The demand curve will shift to the right, increasing the price of multigrain bread.
Which of the following will occur if a legal price floor is placed on a good below its free market equilibrium?
The equilibrium price will hold and ration the good.
The substitution effect causes a consumer to buy less of a product when the price increases because:
The product is now more expensive compared to similar products.
If an excise tax is imposed on a product, consumer surplus and producer surplus for this good will most likely change in which of the following ways?
There will be a loss in total surplus in the market.
An economist for a computer company predicts that a decrease in consumer incomes will decrease the demand for computers. This prediction assumes that
computers are normal goods.
The area above a supply curve, below the equilibrium price, and left of equilibrium quantity is the:
producer surplus.
A positive sign on cross-price elasticity of demand indicates that the two products are:
substitutes.
The market for soda is shown below. Select which graph option represents the following scenario. A new company launches a brand new brand of soda.
supply curve shifts to right
The market for soda is shown below. Select which graph option represents the following scenario. A new machine is created that helps refine sugar two times faster.
supply curve shifts to right
Assume that coal is a normal good. If the price of coal increases and the quantity sold increases, which of the following is consistent with these observations?
the price of oil, a substitute for coal, increases
A movement along the supply curve might be caused by a change in:
the price of the good or service that is being supplied.
If the government subsidizes the production of corn,
the supply curve will shift to the right.
Demand is the different quantities of goods that consumers are ____ and ____ to buy at different prices.
willing and able
