13. [3 Marks] All costs are borne by sellers and all benefits accrue to buyers. It costs seller A $10 to produce a pound of coffee, which it sells for $18. It costs seller B $12 to produce a pound of coffee, which it sells for $15. Prof. G. is willing to pay the same amount for either seller's coffee. By how much does total surplus change if we force him to purchase form seller A instead of B? A. +$3 B. +$2 C. -$2 D. -$3 E. Unable to determine without knowing Prof. G.'s WTP.
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Michael spends all of his income on coffee and donuts. A coffee costs $2.50 and a donut costs $2.00. At his current consumption level, the marginal utility for coffee is 30 utils, and the marginal utility for a donut is 60 utils. Which statement best describes what Michael needs to do to maximize his utility?
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Question 2
What is it called when the marginal utility derived from the last dollar spent on each good is the same across all goods and the last dollar spent uses all of the available budget for the purchase of those goods?
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Question 3 (1 point)
What does the economic theory of marginal utility infer?
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Question 4
Kate is addicted to chocolate and does not care how much it costs. In fact, she spends more than $20 a week on chocolate. What can be concluded about elasticity in her buying decisions?
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Question 5 (1 point)
Why does the demand for a good become relatively more elastic?
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Question 6 (1 point)
Assume the price of chicken per pound is $3.49 and that Americans purchase 10 million pounds per chicken every month. If the price of chicken increases to $5.49 per pound, identify what will occur to consumer surplus?
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Question 7 (1 point)
What is another name for the difference between the price that consumers are willing to pay for a good and a lower price that they may actually have to pay?
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Question 8
Adam, Brian, Robert, and Sam all want to attend a football game. The admission price is $48. Adam is willing to pay $59 for the ticket. Brian is willing to pay $39. Robert is willing to pay $45, and Sam is willing to pay $55. Based on this information, who will go to the game?
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Question 9 (1 point)
Lily is willing to pay $10 for one bracelet and $5 for a second. Patty is willing to pay $12 for one bracelet and $2 for a second. If the price is currently $8 per bracelet, identify what is the total consumer surplus after Lily and Patty make their purchases?
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Question 10 (1 point)
Manfred is willing to shovel one driveway for $25, a second for $30, and a third for $35. Assume that the market rate for shoveling driveways is $32. How many driveways will Manfred shovel, what will be his total revenue, and what will be his producer surplus?
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Question 11 (1 point)
What would the difference between the price that producers receive and the lower price at which they are willing to sell the good be called?
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Question 12 (1 point)
What will happen when there is an increase in the price of eBook downloads?
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Question 13 (1 point)
When is price elasticity of demand utilized to measure how an individual changes the quantity they demand?
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Question 14 (1 point)
Assume Mary consumes only tea and pastries. A cup of tea costs 5 euros and a pastry costs 8 euros. Her weekly income is 450 euros. Mary always drinks 2 cups of tea for every pastry she consumes. What is MaryΓ’ΒΒs optimal weekly consumption bundle?
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Question 15 (1 point)
When is producer surplus a positive value?
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1 an imperfect market, individual firms
A.are always able to set the price of their product. |
B.are able to influence the price of their product. |
C.have no influence over the price of their product. |
D.take the market price as given. 1 Which of the following is NOT characteristic of a market economy?
2 In a competitive market, the price of the product is
3 Which of the following firms participates in a competitive market?
4 In an imperfect market, individual firms
5 Which of the following firms operates as a monopoly?
6 According to the law of demand, what is the relationship between price and quantity demanded?
7 Refer to the following graph. The demand curve slopes downward because
8 A change in which of the following will cause a change in the quantity demanded of coffee?
9 Suppose that burgers and fries are complements in consumption. If the price of fries increases
10 Suppose that Coca Cola and Pepsi are substitutes in consumption. If the price of Coca Cola decreases, then
11 According to the law of supply, what is the relationship between price and quantity supplied?
12 Refer to the graph below. The supply curve is _______________ driven by the law of supply.
13 A change in which of the following will cause a change in the quantity supplied of coffee?
14 Which of the following will cause a rightward shift in the supply curve for tobacco?
15 Flour is a factor of production of cupcakes. How will an increase in the price of flour affect the market for cupcakes?
16 Refer to the following image. When a market is in equilibrium, which of the following is true?
17 Refer to the following figure. At a price of $15, this market is experiencing a(n)
18 Refer to the following figure. At a price of $5, this market is experiencing
19 Suppose pasta salad is a normal good. If the price of pasta (a major ingredient in pasta salad) increases and income also increases, the
20. What must happen to the market price in order for a shortage to be eliminated?
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