Practice Test econ 1-6
which of the following causes demand to be more elastic with respect to price
a high ration of price to income
demand is more price-elastic
in the long run
the most desired goods or services that are given up when a choice is made is called
opportunity cost
the equilibrium price and quantity are
$9 and 30 units
Suppose a university raises its tuition by 6 percent and as a result the enrollment of students decreases by 3 percent. The absolute value of the price elasticity of demand is
0.5
total revenue is
quantity sold time price
if demand is perfectly elastic
the demand curve is horizontal
if demand is elastic then,
the elasticity number E is greater than 1
if the price increases by 10 percent, and the quantity demanded falls by 5 percent, the absolute value of the price elasticity will be
0.5
with no budget constraint, a rational consumer will consume
1 apple
the total utility of two apples is
11 utils
the total utility of five apples is
18 utils
if the price of sandals increases by 10 percent and quantity demand falls by 20 percent, then the price elasticity of demand in absolute value is
2
josh is eating pizza at his favorite italian restaurant. Below is his utility from this consumption: The marginal utility Josh enjoys from the fourth slice of pizza is
5 utils
what is johns total utility from consuming the third slice of pizza
54 utils
Total utility is maximized at
6 apples
if the price elasticity of demand is 0.6, then a 10 percent increase in the price of the good will lead to a _________ in the quantity of demand
6 percent decrease
what is the total utility of two units of cola
72
Jessie's demand schedule for candy bars indicates
Her opportunity cost of buying candy bars.
Total utility is maximized when
Marginal utility is zero.
maximum total revenue occurs when
The absolute value of the price elasticity of demand is 1.0.
If marginal utility is negative, then
Total utility will decrease with additional consumption.
if the government required the actual market price to be fixed at $6 per unit in, shifts of supply and demand
a binding or effective price ceiling would result
which of the following events would cause a rightward shift in the market supply curve for automobiles
a technological improvement that reduces the cost of production
josh is eating pizza at his favorite Italian restaurant. below is his utility from this consumption: For josh, diminishing marginal utility begins
after the first slice of pizza
a price decrease will cause total revenue to fall if
demand is inelastic
The demand will be _______________ if the consumer has _________ substitute goods to choose from
elastic ; more
when demand is elastic, the absolute number for price elasticity will be
greater than 1
price elasticity of demand refers to
how sensitive buyers are to a change in price
If the market wage for fast-food restaurants is $4 and the government enforces a minimum wage of $7, the unemployment rate will
increase as quantity of labor supplied increases and quantity of labor demanded decreases
according to the law of demand, during a given period of time, the quantity of a good demanded
increases as its price falls
if an individual demands a good, it means that he or she
is willing and able to purchase the good at some price
a factor market is any place or process where
land, labor, or capital is bought and sold
a consumer maximizes total utility from a given amount of income when the
marginal utility per dollar obtained from the last unit of each good is the same
a change in demand means there has been a shift in the demand curve, and a change in quantity demanded
means that price has changed and there is movement along the demand curve
which determinant of demand changes in the personal computer market as more individuals become interested in "surfing the Internet"
number of buyers
the law of diminishing marginal utility suggests
people are willing to buy additional quantities of a good only if its price falls
as the number of substitutes for a good increases, the
price elasticity of demand should become larger
when demand is price-inelastic, an increase in
price leads to greater total revenue
economic explanations of consumer behavior take into consideration
prices and income
business firms supply goods and services to ____________ and purchase factors of production in _______________
product markets; factor markets
price elasticity of demand shows how
responsive the quantity demanded is to a change in price
the law of supply implies that
supply curves are upward-sloping to the right
a buyer is said to have a demand for a good only when
the buyer is both willing and able to purchase the good
to find the percentage change in price
the change in price is divided by the average price
diminishing marginal utility begins after
the first apple
the goal of the consumer in a market economy is to use his or her limited income to buy
the set of goods and services that maximizes the consumer's total utility
the market demand for a product is
the sum of all of the individual demands for that product
if the actual market price were fixed at $6 per unit in the above diagram
there would be a shortage of 20 units
If the actual market price were fixed at $15 per unit in Figure 3.2,
there would be a surplus of 40 units