econ section 9

(use table 49-1) if the box-office price of a ticket to see phantom of the opera is $50, and there is no other market for tickets, the total consumer surplus for the five students is:

$240

(use figure 47-1) the price elasticity of demand for the segment EF, using the midpoint method, is:

less than one, but greater than zero

(use figure 47-1) the absolute value of the price elasticity of demand for the segment BC is:

less than the price elasticity of demand for segment AB

the amount by which total utility increases or decreases when an additional unit of a good is consumed is called _________ utility.

marginal

the law of diminishing marginal utility indicates that the slope of the marginal utility curve eventually becomes:

negative

if your income increases and your consumption of bagels increases, other things equal, bagels are considered:

normal good

the substitution effect always involves a change in consumption in the _________ direction of the _______ change

opposite; price

for which of the following is the cross-price elasticity of demand most likely a large positive number?

potato french fries & sweet potato french fries

the price elasticity of demand measures the responsiveness of the change in

quantity demanded to a change in price

the incidence of a tax:

refers to the share of a tax paid by consumers & the share paid by sellers

(use table 51-5) the law of diminishing marginal utility is first observed at the _________ unit.

second

(use table 51-5) marginal utility first becomes negative at the _________ unit.

sixth

the demand curve for a normal good will always slope downward because:

the substitution effect and the income effect reinforce each other, and the substitution effect always displays an inverse relation between price and quantity demanded

we can measure total consumer surplus for good x as:

the sum of the individual consumer surpluses for all buyers of x

the marginal utility of coffee consumption for steve is the change in ________ generated by consuming an additional unit of coffee.

total utility

if your purchases of shoes remain constant at 9 pairs per year when the price of shirts increases from $8 to $12, then, for you, shoes and shirts are considered:

unrelated goods

economists describe the satisfaction consumers receive from consuming goods & services as:

utility

(use table 49-1) using the information in the table, if the price of a ticket to see phantom of the opera is $50, then robert's consumer surplus is:

$10

(use table 49-1) if the box-office price of a ticket to phantom of the opera is $130, and there is no other market for tickets, the total consumer surplus for the five students is:

$20

(use scenario 50-1) the figure represents a competitive market for taxi rides. if the government now imposes an excise tax of $3 per ride (causing the supply curve to shift upward by that amount), then the government will collect tax revenues of __________, which might be used for worthwhile purposes, but there will be a deadweight loss to society of _________ caused by this tax.

$24 million; $6 million

(use scenario 50-1) the figure represents a competitive market for taxi rides. if the government now imposes an excise tax of $4 per ride (causing the supply curve to shift upward by that amount), then the government will collect tax revenues of ___________, which might be used for worthwhile purposes. however, there will be a deadweight loss to society of ___________ caused by this tax.

$24 million; $8 million

(use scenario 50-1) the figure represents a competitive market for taxi rides. if the government now imposes an excise tax of $1 per ride (causing the supply curve to shift upward by that amount), then the government will collect tax revenues of __________, which might be used for worthwhile purposes, but there will be a deadweight loss to society of __________ caused by this tax.

$9 million; $0.5 million

(use table 51-1) the marginal utility for the sixth unit is:

-5

(use table 51-1) the marginal utility for the fifth unit is:

0

each month jessica buys exactly 4 big macs regardless of the price. jessica's price elasticity of demand for big macs is:

0

in the table (on page 4), when income changes from $1000 to $1,400 per month, the income elasticity of demand for pizza at a price of $14 per pizza is:

1.67

(use table 51-1) the marginal utility for the second unit is:

15

assume that the marginal utilities for the first three units of a good consumed are 200, 150, and 125, respectively. the total utility when two units are consumed is:

350

egg producers know that the elasticity of demand for eggs is 0.1. if they want to increase sales by 5%, they will have to lower price by:

50%

austin spends all his income on food (F) & shelter (s). his budget line is given by the equation 5F + 20S = 100. which of the following consumption bundles is part of his consumption possibilities?

8 units of F & 3 units of S

(use figure 49-2) at a price of P2, consumer surplus equals the area:

ABP2

(figure 49-2) at a price of P1, consumer surplus equals the area:

AFP1

(use figure 49-2) if the good is free, consumer surplus equals the area:

AQ3 0

(use figure 49-2) if the price falls from P2 to P1, consumer surplus increases by the area:

P1P2BF

(use figure 49-2) if the price rises from P1 to P2, consumer surplus decreases by the area:

P1P2BF

consider the market for milkshakes. an increase in the consumer surplus may result from:

an increase in the supply of milkshakes

consumer surplus is represented by the area _________ the demand curve ________ the price

below; above

suppose the cross-price elasticity between demand for burger king burgers & the price of mcdonald's burgers is 0.8. if mcdonald's increases the price of its burgers by 10%, then:

burger king will sell 8% more burgers

if the price of chocolate-covered peanuts increases & the demand for strawberry-flavored soft drinks decreases, this indicates that these two goods are:

complementary goods

sometimes airlines raise ticket prices as the flight departure date approaches in the hope of increasing revenue. the airlines raise their prices on the assumption that:

consumer demand becomes less price-elastic as departure time approaches

an excise tax creates inefficiency in that the number of transactions in a market is reduced. because the tax discourages mutually beneficial transactions, there is _________ from a tax.

deadweight loss

along a given demand curve, an increase in the price of a good will:

decrease consumer surplus

on a linear demand curve

demand is elastic at high prices

(use table 51-5) marginal utility is zero for the _________ unit.

fifth

(use table 51-1) total utility is maximized at the _________ unit.

fourth

to say that two goods are substitutes, their cross-price elasticities of demand should be:

greater than 0

(use figure 47-1) the price elasticity of demand for the segment AB is:

greater than one

(use figure 47-1) the absolute value of the price elasticity of demand for the segment AB is:

greater than the price elasticity of demand for segment BC

the income effects of a change in the price of a good are more important for goods that:

take up a substantial share of consumer's spending

the demand for textbooks is price inelastic. which of the following would explain this?

the good is a necessity