econ exam review 2

diminishing marginal utility refers to the fact that

additional satisfaction declines as additional units of an item are consumed

"Introducing the 220-hp MAZDA6 Remember adrenaline? Goosebumps? Genuine exhilaration? You will when you drive the MAZDA6. It's a genuine, purely exhilarating sports sudan. As you fire up the 220-horsepower engine, then shift through its 5-speed close-radio gearbox, those old familiar feelings start to return. And by the time the sport-tuned double-wishbone front suspension carries you seamlessly through the first hairpin, it's as if they never left. The 220-hp MAZDA6. Drive it. You'll know." This advertisement is intended to appeal to consumers' sense of

adventure

which one is a durable good a. shirt b. car c. pen d. movie ticket

car

the Federal Deposit Insurance Corporation (FDIC) insures

commercial bank accounts

interest is the

cost of credit expressed monthly in dollars and cents

"We are a full-service financial institution providing a wide variety of financial products and services... We have been serving communications employees and their families for 65 years... Our philosophy is...'people helping people.' For information about your company's eligibility to offer...membership to employees, call us." This passage comes from what type of financial institution?

credit union

a financial institution that is owned and operated by members to provide savings accounts and low interest loans is a

credit union

consumers can transfer money electronically from their bank accounts to the bank accounts of stores or restaurants by using

debit cards

demand for one particular brand of coffee is probably

elastic

according to the law of demand, when the price of an item goes up the quantity demanded

falls

if the price of an item rises, quantity demanded usually

falls

a debit card is a type of credit card

false

according to the law of demand, quantity and price move in the same direction

false

durable goods are defined as good that last more than 10 years

false

when people's income goes up, they usually consume less of a good or service

false

every purchase decision involves the use of two scarce resources

income and time

the principle that states that the more you have of something, the less satisfaction you will get from an additional unit is the

law of diminishing marginal utility

generally, the more substitutes there are for a good, the

more elastic the demand

the quantity demanded of a product is affected by

price

according to the law of supply, higher prices prompt producers to

produce more

when the price of a good is too high for consumers, they look for

substitutes

if the price of a product is above its equilibrium price, the result is a

surplus

demand

the movement shown in this graph represents a change in what?

according to the law of supply, producers are willing to supply more when the price of a good or service goes up

true

account holders can write checks on money market accounts

true

the substitution effect can decrease the quantity demanded of a good

true

which of the following is an example of a durable good a. washing machine b. hairbrush c. blouse d. gasoline

washing machne

an increase in population

which of the following choices could cause the movement shown in the graph a. decrease in income b. increase in population c. increase in price of substitute d. decrease in price of compliment

decrease in income

which of the following choices could cause the movement shown in the graph? a. decrease in income b. increase in population c. increase in price of substitute d. decrease in price of compliment