Econ Ch. 6

What does a backward-bending labor supply curve suggest? A. Some wage increases may lead work hours to increase. B. Some wage increases may lead work hours to decrease. C. Some wage increases may lead work hours to stay the same. D. Some wage increases may lead work hours to equal 40.

Some wage increases may lead work hours to decrease.

Marginal utility can: A. be positive, negative, or zero B. be positive or negative, but not zero C. increase positively, but not negatively D. decrease, but not become negative

be positive, negative, or zero

A consumer's utility is maximized at the point where the marginal utility per dollar spent on all goods are ____. A. one B. equal C. negative D. infinity

equal

When the price of rent goes up, George spends less on other goods because the buying power of his salary has been reduced. This result is an example of a(n) ________. A. income effect B. substitution effect C. law of diminishing marginal utility D. law of demand

income effect

A higher wage means more money, but also more opportunity to take time off. This idea illustrates the ________ tradeoff. A. production possibilities B. utility-wage C. labor-leisure D. price-cost

labor-leisure

What is one reason why some countries might choose to save a relatively low percentage of their income? A. high interest rates B. placing a high value on future consumption C. low interest rates D. early retirement ages

low interest rates

Approximately what portion of annual consumption is typically spent by American households on shelter? A. one-fourth B. one-third C. one-quarter D. one-half

one-third

In order to calculate total utility of consuming five slices of pizza, we must know the ____ of consuming each slice of pizza. A. cost of production B. price C. utils or satisfaction D. productivity

utils or satisfaction

Which of the following is an example of an intertemporal choice in financial markets? A. to decide how to balance the labor-leisure tradeoff B. to determine how to maximize profits based on marginal cost C. to determine how much to save for retirement D. deciding to eat the fourth slice of pizza based on marginal utility

to determine how much to save for retirement

Which of the following best describes the law of diminishing marginal utility? A. As people consume more of something, they value each additional unit less. B. As people consume more of something, they are willing to pay more for it. C. As people consume more of something, they never want to stop. D. As people consume more of something, they lose money.

As people consume more of something, they value each additional unit less.

How does the U.S. Bureau of Labor Statistics gather information with regard to the typical consumption choices of Americans? A. Consumer Income Budget Survey B. Consumer Expenditure Survey C. Consumer Spending Survey D. Consumer Income Survey

Consumer Expenditure Survey

Which of the following best describes an intertemporal budget constraint? A. It summarizes the choices between present and future interest rates. B. It summarizes the choices between present and future costs. C. It summarizes the choices between present and future profits. D. It summarizes the choices between present and future consumption.

D. It summarizes the choices between present and future consumption.

If one of the goods that you buy has ________, it is an inferior good. A. a higher price B. a lower demand C. a positive income elasticity D. a negative income elasticity

a negative income elasticity

A decrease in the price of a product has a substitution effect and ________, which says that after the price decline, the consumer could purchase the same goods as before, and still have money left over to purchase more. A. a demand effect B. an income effect C. a complementary effect D. a price effect

an income effect

Jay and Jen are married with two children. They are preparing a household budget for the coming year. Based on statistical information for American households, approximately what portion of this family's annual consumption will most likely be budgeted for food and vehicle expenses? A. one-fourth B. one-quarter C. one-third D. two-thirds

one-third

The price of leisure is the ________ forgone wages. A. explicit cost of B. supply and demand for C. cost of a vacation in terms of D. opportunity cost of

opportunity cost of