Question 1

A bar patron complains that he can no longer visit his neighborhood tavern as often because the price of his favorite beer went up a dollar a glass to $4.He used to purchase 20 beers per week but now he only purchases 16 beers per week.Determine if demand for beer is elastic or inelastic.If the patron only had 12 beers per week after the price increase would the elasticity of demand for the beer be different?

Accepted Answer

The price elasticity for the beer would ...

Question 2

Table 4.1 - Utility schedule
Complete the table and then use the information to answer the question(s) below. 
-In Table 4.1,the total utility when two units are consumed is:

Accepted Answer

A)   12.
B)   20.
C)   30.
D)   44.E) None of the above
F) A) and B) D

Question 3

Market demand is the:

Accepted Answer

A)   Sum of all individual demands for a product in a given time period.
B)   Sum of all individual supply preferences.
C)   Same thing as an individual's demand.
D)   Satisfaction from consuming an additional unit of a gooD.E) B) and C)
F) A) and D)

Question 4

If the price elasticity of demand for a product is 2.3,this means that quantity demanded will increase by _______ for each _______ decrease in price,ceteris paribus.

Accepted Answer

A)   1 percent;2.3 percent
B)   1 unit;$2.30
C)   2.3 percent;1 percent
D)   2.E) A) and C)
F) All of the above

Question 5

Total utility is maximized where:

Accepted Answer

A)   Price is less than marginal utility.
B)   Price is equal to marginal utility.
C)   Marginal utility is maximized.
D)   Marginal utility is zero.E) None of the above
F) B) and C)

Question 6

Ceteris paribus,when a firm increases the price of its product,total revenue will:

Accepted Answer

A)   Always increase because the firm will receive more revenue per unit sold.
B)   Always decrease because the firm will sell fewer units.
C)   Increase if the price elasticity of demand is inelastic.
D)   Increase if the price elasticity of demand is elastic.E) All of the above
F) A) and D)

Question 7

The demand for _______ is relatively elastic.

Accepted Answer

A)   Water
B)   Electricity
C)   Vacation travel
D)   CoffeeE) A) and D)
F) B) and C)

Question 8

If the price of battery-powered flashlights falls and the demand for flashlight batteries rises,then flashlights and batteries are:

Accepted Answer

A)   Substitutes.
B)   Complements.
C)   Price inelastic goods.
D)   Price elastic goods.E) A) and B)
F) A) and C) B

Question 9

The price elasticity of demand measures the response of consumers to a change in price.

Accepted Answer

A) True 
 B)False

Question 10

The law of demand and the law of diminishing marginal utility are related since both:

Accepted Answer

A)   Predict that consumers will continue to buy unlimited amounts of goods.
B)   Address the budget constraints that consumers face.
C)   Assume that the first units consumed have more utility than subsequent units.
D)   Assert that consumer preferences are not as significant as price and income.E) B) and D)
F) All of the above

Question 11

Status and ego concerns are sociopsychiatric explanations for consumption behavior.

Accepted Answer

A) True 
 B)False  True

Question 12

Ceteris paribus,in which of the following instances will total revenue decline?

Accepted Answer

A)   Price rises and demand is inelastic.
B)   Price rises and demand is elastic.
C)   Price falls and demand is elastic.
D)   Price falls and demand is unitary elastic.E) A) and B)
F) A) and C)

Question 13

The largest portion of the average U.S.consumer's dollar is spent on:

Accepted Answer

A)   Food.
B)   Entertainment.
C)   Health care.
D)   Housing.E) All of the above
F) A) and B)

Question 14

Which of the following does NOT influence consumer demand?

Accepted Answer

A)   The consumer's ability to pay.
B)   The consumer's fears,psychological complexes,and anxieties.
C)   Ego and status.
D)   Producer behavior.E) B) and C)
F) A) and C)

Question 15

Demand is defined as the:

Accepted Answer

A)   Desire for goods and services.
B)   Ability and willingness to sell goods at various prices.
C)   Ability and willingness to buy specific quantities of a good or service at various prices in a given time period,ceteris paribus.
D)   Sensitivity of buyers to a change in price.E) B) and C)
F) B) and D)

Question 16

Which of the following is the best reason why we typically pay a relatively low price for water?

Accepted Answer

A)   Additional units of water are normally not worth much to us.
B)   Because water is abundant,the total utility we receive from water is relatively low.
C)   Because water is abundant,the marginal utility we receive from water is relatively high.
D)   Although additional units of water are normally worth a lot to us,the supply of water is so great we refuse to pay a high price for these additional units.E) A) and B)
F) A) and C)

Question 17

Ceteris paribus,a price increase will cause total revenue to stay the same for a producer only if the price elasticity demand for its product is:

Accepted Answer

A)   Inelastic.
B)   Elastic.
C)   Unitary elastic.
D)   Extremely high.E) A) and B)
F) A) and D)

Question 18

If demand is unitary elastic,then a price cut:

Accepted Answer

A)   Reduces total revenue.
B)   Increases total revenue.
C)   Does not change total revenue.
D)   Sometimes increases and sometimes decreases total revenue.E) All of the above
F) A) and B)

Question 19

The demand for such items as salt,sugar and hand soap tend to be:

Accepted Answer

A)   Relatively inelastic
B)   Relatively elastic
C)   Perfectly inelastic
D)   Perfectly elasticE) All of the above
F) None of the above

Question 20

Which of the following is a determinant of demand for a good?

Accepted Answer

A)   Consumer income.
B)   The number of available workers.
C)   Prices of factor inputs.
D)   Technology.E) A) and C)
F) None of the above

Exam 4: Consumer Demand

Correct Answer
verified
The price elasticity for the beer would ...
View Answer

Table 4.1 - Utility schedule Complete the table and then use the information to answer the question(s) below. -In Table 4.1,the total utility when two units are consumed is:

Correct Answer
verified
D

Market demand is the:

Correct Answer
verified

If the price elasticity of demand for a product is 2.3,this means that quantity demanded will increase by _ for each _ decrease in price,ceteris paribus.

Correct Answer
verified

Total utility is maximized where:

Correct Answer
verified

Ceteris paribus,when a firm increases the price of its product,total revenue will:

Correct Answer
verified

The demand for _______ is relatively elastic.

Correct Answer
verified

If the price of battery-powered flashlights falls and the demand for flashlight batteries rises,then flashlights and batteries are:

Correct Answer
verified
B

The price elasticity of demand measures the response of consumers to a change in price.

Correct Answer
verified

The law of demand and the law of diminishing marginal utility are related since both:

Correct Answer
verified

Status and ego concerns are sociopsychiatric explanations for consumption behavior.

Correct Answer
verified
True

Ceteris paribus,in which of the following instances will total revenue decline?

Correct Answer
verified

The largest portion of the average U.S.consumer's dollar is spent on:

Correct Answer
verified

Which of the following does NOT influence consumer demand?

Correct Answer
verified

Demand is defined as the:

Correct Answer
verified

Which of the following is the best reason why we typically pay a relatively low price for water?

Correct Answer
verified

Ceteris paribus,a price increase will cause total revenue to stay the same for a producer only if the price elasticity demand for its product is:

Correct Answer
verified

If demand is unitary elastic,then a price cut:

Correct Answer
verified

The demand for such items as salt,sugar and hand soap tend to be:

Correct Answer
verified

Which of the following is a determinant of demand for a good?

Correct Answer
verified

Exam 4: Consumer Demand

Correct AnswerverifiedThe price elasticity for the beer would ...View AnswerShow Answer

Table 4.1 - Utility schedule Complete the table and then use the information to answer the question(s) below. -In Table 4.1,the total utility when two units are consumed is:

Correct AnswerverifiedD

Market demand is the:

Correct AnswerverifiedShow Answer

If the price elasticity of demand for a product is 2.3,this means that quantity demanded will increase by _______ for each _______ decrease in price,ceteris paribus.

Correct AnswerverifiedShow Answer

Total utility is maximized where:

Correct AnswerverifiedShow Answer

Ceteris paribus,when a firm increases the price of its product,total revenue will:

Correct AnswerverifiedShow Answer

The demand for _______ is relatively elastic.

Correct AnswerverifiedShow Answer

If the price of battery-powered flashlights falls and the demand for flashlight batteries rises,then flashlights and batteries are:

Correct AnswerverifiedB

The price elasticity of demand measures the response of consumers to a change in price.

Correct AnswerverifiedShow Answer

The law of demand and the law of diminishing marginal utility are related since both:

Correct AnswerverifiedShow Answer

Status and ego concerns are sociopsychiatric explanations for consumption behavior.

Correct AnswerverifiedTrue

Ceteris paribus,in which of the following instances will total revenue decline?

Correct AnswerverifiedShow Answer

The largest portion of the average U.S.consumer's dollar is spent on:

Correct AnswerverifiedShow Answer

Which of the following does NOT influence consumer demand?

Correct AnswerverifiedShow Answer

Demand is defined as the:

Correct AnswerverifiedShow Answer

Which of the following is the best reason why we typically pay a relatively low price for water?

Correct AnswerverifiedShow Answer

Ceteris paribus,a price increase will cause total revenue to stay the same for a producer only if the price elasticity demand for its product is:

Correct AnswerverifiedShow Answer

If demand is unitary elastic,then a price cut:

Correct AnswerverifiedShow Answer

The demand for such items as salt,sugar and hand soap tend to be:

Correct AnswerverifiedShow Answer

Which of the following is a determinant of demand for a good?

Correct AnswerverifiedShow Answer

Correct Answer
verified
The price elasticity for the beer would ...
View Answer

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D

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If the price elasticity of demand for a product is 2.3,this means that quantity demanded will increase by _ for each _ decrease in price,ceteris paribus.

Correct Answer
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B

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True

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