ECON: Chapter 4 Flashcards
The market demand curve is calculated by
-averaging the price demanded from individual demand curves at all prices.
-averaging the quantities demanded from individual demand curves at all prices.
-summing the quantities demanded from individual demand curves at all price
-summing the price from individual demand curves.
summing the quantities demanded from individual demand curves at all price
As the marginal utility of a good diminishes, so does the
-price consumers are willing to pay.
-availability of the product.
-quantity supplied of the product.
-elasticity of demand for the product.
price consumers are willing to pay.
If the marginal utility for slices of pizza is decreasing but positive, then?
-the total utility for slices of pizza is increasing.
-the total utility for slices of pizza is decreasing.
-additional slices of pizza yield zero satisfaction.
-the total utility for slices of pizza is negative.
the total utility for slices of pizza is increasing.
Marginal utility is an important economic concept because it
-predicts the amount of a good a business will produce.
-is the total utility a consumer receives from a good.
-can be used to predict the amount of a good a rational consumer will purchase.
-indicates the budget limitations of the consumer.
can be used to predict the amount of a good a rational consumer will purchase.
In economic theory, utility refers to the
-satisfaction obtained from a good or service.
-willingness to buy specific quantities of a good or service at a particular price.
-additional satisfaction obtained from one more unit of a good or service.
-decrease in satisfaction as more of a good or service is consumed.
satisfaction obtained from a good or service.
Which of the following is not a determinant of demand?
-desire for the good
-the price of other goods
-income of the consumer
-marginal supply of labor
marginal supply of labor
The following table shows the utility (enjoyment) that Joyce receives from eating ice cream cones on a hot summer day:
Ice Cream Cone Enjoyment (number of “utils”)
1st cone 10 out of 10
2nd cone 8 out of 10
3rd cone 5 out of 10
4th cone 1 out of 10
This chart illustrates the law of
-diminishing returns.
-diminishing marginal utility.
-demand.
-supply.
diminishing marginal utility.
A survey about American spending habits of the young (under 25) by the BLS shows that
-young men spend more than young women on clothing and personal care items.
-young men are more likely to go into credit card debt because of their spending than are young women
-young women are more likely to go into credit card debt because of their spending than are young men.
-women spend more than men on alcohol and smoking.
-young women are more likely to go into credit card debt because of their spending than are young men.
The pleasure or satisfaction obtained from goods and services is known as
-ceteris paribus.
-total revenue.
-utility.
-price elasticity of demand.
utility.
if marginal utility is negative, then
-total utility will increase with additional consumption.
-the good in question is an inferior good.
-total utility will decrease with additional consumption.
-total utility is at a minimum.
total utility will decrease with additional consumption.
Price elasticity of demand indicates the consumer’s response to changes in
-supply.
-demand.
-quantity.
-price.
price.
Which of the following is most likely to be inelastic with respect to demand?
-airline travel in the long run
-illegal drugs
-new cars
-HDTV sets
illegal drugs
A good whose demand is not very responsive to a change in price is
-unitary elastic.
-inelastic.
-income elastic.
-elastic.
inelastic.
If quantity demanded rises only slightly following a moderate price cut, then the response would be considered
-elastic.
-inelastic.
-unitary elastic.
-abnormal.
inelastic.
A price cut will increase the total revenue a firm receives, ceteris paribus, only if the demand for its product is
-elastic.
-perfectly inelastic (i.e., E = 0).
-unitary elastic.
-inelastic.
elastic.
