 |
| 1.
| |
Sam experiences 21, 39, and 54 units of utility when he consumes 1, 2, and 3 double meat and cheese hamburgers. Sam's marginal utilities for the first, second, and third burger are |
| | A) | undefined, 18, and 15. |
| | B) | 21, 60, and 114. |
| | C) | 21, 39, and 54. |
| | D) | 21, 18, and 15. |
| | E) | 21, 18, and undefined. |
|
|
|
| 2.
| |
Sam experiences 21, 39, and 54 units of utility when he consumes 1, 2, and 3 double meat and cheese hamburgers. From the data, one can infer that Sam |
| | A) | really likes double meat and cheese hamburgers. |
| | B) | is not experiencing diminishing marginal utility to burgers. |
| | C) | is likely to suffer from heart disease. |
| | D) | is experiencing diminishing marginal utility to burgers. |
| | E) | will choose to consume two burgers. |
|
|
|
| 3.
| |
If the marginal utility of the 3rd unit of Good X is 20, the price of X is $4, the marginal utility of the 6th unit of Good Z is 65 and the price of Z is $13, then to comply with the Rational Spending Rule, the consumer should |
| | A) | purchase more than 3 units of X and less than 6 units of Z. |
| | B) | purchase 3 units of X and 6 units of Z. |
| | C) | purchase less than 3 units of X and more than 6 units of Z. |
| | D) | purchase more than 3 units of X and more than 6 units of Z. |
| | E) | purchase less than 3 units of X and less than 6 units of Z. |
|
|
|
| 4.
| |
Carol's quantity of romance novels demanded is 30 when the price is $5, Jennifer's quantity demanded at $5 is 3, and Alan's quantity demanded is 43 at a $5 price. The market demand for romance novels at a price of $5 is |
| | A) | 76. |
| | B) | 43. |
| | C) | 30. |
| | D) | 3 |
| | E) | unknown; insufficient information. |
|
|
|
| 5.
| |
If 1,123 romance novels are sold at a market price of $6, firms will |
| | A) | make a profit. |
| | B) | lose money. |
| | C) | collect total revenues that exceed total expenditures made by consumers. |
| | D) | collect total revenues that are exceeded by total expenditures made by consumers. |
| | E) | receive $6,738 in total revenues. |
|
|
|
| 6.
| |
The ratio of the percent change in quantity demanded of a good to the percent change in the price of the good measures |
| | A) | the responsiveness of consumers to quantity changes. |
| | B) | the degree of price markup the firm can exercise. |
| | C) | the responsiveness of consumers to price changes. |
| | D) | the degree to which the good is a necessity. |
| | E) | the availability of substitutes for the good. |
|
|
|
| 7.
| |
To say that the demand for electricity is inelastic means that |
| | A) | electricity is a necessity. |
| | B) | consumers will pay any amount to consume electricity. |
| | C) | electric utilities are free to charge very high prices for electricity. |
| | D) | the absolute value of the ratio of the percent change in quantity demanded to the percent change in price is greater than one. |
| | E) | the absolute value of the ratio of the percent change in quantity demanded to the percent change in price is less than one. |
|
|
|
| 8.
| |
The most important factor in determining the likely size of the price elasticity of demand for a particular good is |
| | A) | if the good is a necessity. |
| | B) | the number and closeness of substitute goods. |
| | C) | the amount of income spent on the good. |
| | D) | the usefulness of the good. |
| | E) | if the good is a luxury. |
|
|
|
| 9.
| |
Given the following demand curve, P = 100 - 5*Q, the absolute value of the price elasticity of demand when P = $20 is |
| | A) | 80. |
| | B) | 5. |
| | C) | .5. |
| | D) | .25. |
| | E) | .2. |
|
|
|
| 10.
| |
If demand for ceramic floor tile is elastic, then lowering the price of ceramic floor tiles will cause |
| | A) | total revenues to fall. |
| | B) | total expenditures to rise. |
| | C) | profits to fall. |
| | D) | total expenditures to fall. |
| | E) | no change in total revenues. |
|
|
.