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Name Willingness to Pay
Andrea $30
Brian $35
Chris $40
Danielle $45
Ethan $50
Fiona $55

Suppose the market price of Country Stampede tickets is $25. __________ consumers will buy tickets and total consumer surplus will be _________.

A. 6; $105

B. 5; $75

C. 4; $50

D. 3; $30

E. 2; $15

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Divya Singh
Divya SinghLv10
28 Sep 2019

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The following table of consumer's reservation prices for apartments are given:

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buy less of both coffee and donuts.

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buy less coffee and more donuts.

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buy more coffee and less donuts.

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spend the same amount on coffee as he does on donuts.

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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?

Question 2 options:

1)

the optimal consumption bundle.

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the optimal production bundle.

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diminishing marginal utility.

4)

optimal point.

Question 3 (1 point)

What does the economic theory of marginal utility infer?

Question 3 options:

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consumers naturally know which consumption choices will maximize their utility.

2)

consumers who watch market trends are better at maximizing their utility than are those who do not watch those trends.

3)

one cannot maximize utility without taking an economics class that explains utility theory.

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one cannot maximize utility without doing the math of calculating the ratios of marginal utility divided by price.

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?

Question 4 options:

1)

Her income elasticity of demand for chocolate is equal to one.

2)

Her income elasticity of demand for chocolate is equal to zero.

3)

Her price elasticity of demand for chocolate is equal to one.

4)

Her price elasticity of demand for chocolate is equal to zero.

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Question 5 (1 point)

Why does the demand for a good become relatively more elastic?

Question 5 options:

1)

substitutes for the good become more available.

2)

substitutes for the good become less available.

3)

the good becomes more of a necessity.

4)

the time allowed for adjustment is shortened.

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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?

Question 6 options:

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consumer surplus increases.

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consumer surplus decreases.

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consumer surplus creates incentive to save.

4)

consumer surplus creates incentive to spend.

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?

Question 7 options:

1)

profit.

2)

revenue.

3)

consumer utility.

4)

consumer surplus.

Question 8

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Question 8 options:

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Adam, Brian, Robert, and Sam.

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Brian and Robert.

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Adam and Sam.

4)

Brian, Robert, and Sam.

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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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$8

2)

$6

3)

$7

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$5

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1)

Manfred will shovel two driveways for a total revenue of $64 and his producer surplus will be $9.

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Manfred will shovel three driveways for a total revenue of $75 and his producer surplus will be $12.

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Manfred will shovel three driveways for a total revenue of $96 and his producer surplus will be $5.

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Question 11 (1 point)

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producer shortage.

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producer surplus.

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consumer shortage.

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consumer surplus.

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Question 12 (1 point)

What will happen when there is an increase in the price of eBook downloads?

Question 12 options:

1)

It reduces the marginal utility derived from each dollar spent on eBooks.

2)

It reduces the marginal utility derived from each hardcopy book purchased.

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There will not be a substitution effect.

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There will not be a change in the number of eBooks in the set of consumption possibilities.

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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?

Question 13 options:

1)

when supply changes.

2)

when product quality changes.

3)

when marketing changes.

4)

when price changes.

Save

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 MaryҀ™s optimal weekly consumption bundle?

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25 cups of tea and 50 pastries.

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50 cups of tea and 25 pastries.

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58 cups of tea and 20 pastries.

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60 cups of tea and 30 pastries.

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Question 15 (1 point)

When is producer surplus a positive value?

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the price the producer is willing to charge equals the market price.

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there is no tax applied to the good.

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the price the producer is willing to charge is less than the market price.

4)

the price the producer is willing to charge is greater than the market price.

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