Economics Ch. 6 Quiz

Question 1 of 33

1

Marginal utility is a measure

Select one of the following:

of total utility derived from consuming a given amount of a good
of the total utility gained from consuming an extra unit of a good
computed by dividing total utility by the amount of a good consumed
determined by a production condition in a market

Explanation

Question 2 of 33

1

"the second glass of Evian water was very good. May I have another?" which of the following is necessarily true regarding this statement?

Select one of the following:

the marginal utility of the second glass is negative
the marginal utility of the second glass is less than the marginal utility of the first glass
the marginal utility of the second glass is positive
the water is free

Explanation

Question 3 of 33

1

Total utility can be calculated as the

Select one of the following:

sum of all marginal utilities
price paid for one unit of a good
product of all marginal utilities
total expenditure on all units of a good the consumer buys

Explanation

Question 4 of 33

1

Demand curves usually slope downward because of the income and substitution effects, and because of the law of diminishing marginal utility

Select one of the following:

True
False

Explanation

Question 5 of 33

1

Newspaper vending machines illustrate that publishers believe

Select one of the following:

the average utility of 2 identical papers is 0 or less
the total utility from 2 identical newspapers is 0 or less
the marginal utility of a second identical newspaper is 0 or less
the marginal utility of a second identical newspaper is greater than the marginal utility of the first newspaper

Explanation

Question 6 of 33

1

Diminishing marginal utility means that

Select one of the following:

as you consume more of a good, other things constant, the total satisfaction you obtain from consuming this good tends to fall
as you hire more labor, other things constant, the total amount produced begins to fall
as you hire more labor, other things constant, the marginal product begins to fall
as you consume more of a good, other things constant, the additional satisfaction you obtain from each additional unit of the good tends to fall
as you consume more of a good, other things constant, the extra satisfaction you obtain from each extra good becomes negative

Explanation

Question 7 of 33

1

The marginal utility of a second copy of today's New York Times is

Select one of the following:

infinite
practically zero
positive and greater than the marginal of the first copy
equal to the marginal utility of the first copy

Explanation

Question 8 of 33

1

Which of the following sayings describes the concept of diminishing marginal utility?

Select one of the following:

time is money
penny wise and pound foolish
absence makes the heart grow founder
a penny saved is a penny earned

Explanation

Question 9 of 33

1

the reason you don't drink 5 cups of coffee at breakfast is that

Select one of the following:

the marginal utility of extra cups of coffee eventually diminishes
most people cannot afford 5 cups
the total utility of coffee rises as you consume more cups
the price of coffee rises as you consume more cups

Explanation

Question 10 of 33

1

Joe the economist tells his wife, Jane, that he wants to spend a weekend fishing with friends. She replies "you don't love me anymore". Just before she hits Joe with a croquet mallet, Joe explains to her that she has confused the concepts of

Select one of the following:

marginal utility and price
income and price
marginal utility and total utility
love and death

Explanation

Question 11 of 33

1

In exhibit 6-12, consumer surplus at a price of $2 is the difference between what consumers are willing to

Select one of the following:

pay for a quantity of goods and what they actually pay, represented by triangle abc
pay for a quantity of goods and what they actually pay, represented by triangle dcb
pay for a quantity of goods and what they actually pay, represented by triangle adc
receive for a good and what they actually get, represented by triangle abc

Explanation

Question 12 of 33

1

Which area in exhibit 6-13 represents consumer surplus at market equilibrium?

Select one of the following:

area a
area b
area c
area a+b+c
area a+b

Explanation

Question 13 of 33

1

Suppose I am willing to pay $300 for roller blades and I purchase them on sale for $200. My consumer surplus is

Select one of the following:

$300
3/2
$100
$200
$0

Explanation

Question 14 of 33

1

The consumers' surplus derived from the last unit of a good purchased

Select one of the following:

tends to be less than 0
tends to be equal to 0
tends to be equal to the price of the good
tends to be greater than the price of the good

Explanation

Question 15 of 33

1

The market demand curve is

Select one of the following:

any individual's demand curve multiplied by the number of consumers in the market
the relationship between income and quantity demanded
the horizontal sum of the individual demand curve for all consumers in the market
the vertical summation of all individual demand curves

Explanation

Question 16 of 33

1

A measure of consumer surplus in any market is

Select one of the following:

total expenditure on the good
the area above the supply curve and below the price
the area beneath the demand curve
the area beneath the demand curve and above the price

Explanation

Question 17 of 33

1

Consumers derive consumer surplus whenever

Select one of the following:

the monetary value of total utility equal total expenditure
the monetary value of total utility is greater than total expenditure
The monetary value of total utility is less than total expenditure
marginal utility is greater than total utility

Explanation

Question 18 of 33

1

For any given price, the more elastic the demand for a product is, the greater will be the consumer surplus

Select one of the following:

True
False

Explanation

Question 19 of 33

1

When a service, such as medical care, is provided free of charge,

Select one of the following:

most people consume an infinite amount of it
most people do not much care about getting good value for their money
people do not derive any consumer surplus from it
we say that the demand for it is perfectly elastic

Explanation

Question 20 of 33

1

Refer to exhibit 6-17. If D, D', and D" represents the demand curves for the only 3 consumers in the market, then the market quantity demanded at a price of $15 will be

Select one of the following:

150
120
90
60
30

Explanation

Question 21 of 33

1

refer to exhibit 6-17. If D, D', and D" represents the demand curves for the only 3 consumers in the market, then the market quantity demanded at a price of $45 will be

Select one of the following:

50
70
90
110
130

Explanation

Question 22 of 33

1

Refer to exhibit 6-17. If D, D', and D" represent the demand curves for the only 3 consumers in the market, then the market quantity demanded at a price of $30 will be

Select one of the following:

40
60
80
100
120

Explanation

Question 23 of 33

1

refer to exhibit 6-17. If D, D', and D" represent the demand curve for the only 3 consumers in the market, then the market demand curve will be more ____ than each of the 3 individual demand curves

Select one of the following:

steep (slope will be more negative)
elastic
flat (slope will be less negative)
inelastic

Explanation

Question 24 of 33

1

Suppose Jerry consumers 3 hamburgers at McDonald's one evening. He figured the last one was just worth the price he paid for it. If the hamburgers he buys have a price of $1. then

Select one of the following:

her earned no consumer surplus
he would have earned consumer surplus if he had eaten one more hamburger
he was irrational
he may have earned consumer surplus on the first 2 hamburgers

Explanation

Question 25 of 33

1

If you buy a good, its expected marginal value to you

Select one of the following:

may be greater than or equal to but not less than its price
may be less than or equal to but not greater than its price
is less than its price
is greater than its price

Explanation

Question 26 of 33

1

When the price is P in exhibit 6-11, the shaded area represents

Select one of the following:

a shortage
producer surplus
a price floor
consumer surplus

Explanation

Question 27 of 33

1

Consumer surplus is

Select one of the following:

the difference between the maximum amount that a consumer is willing to pay for a given amount of a good and the amount that the consumer actually pays
the difference between the price of the good paid by the consumer and the costs of production to the seller
the amount by which quantity supplied exceeds quantity demanded at the current market price
the amount by which quantity demanded exceeds quantity supplied at the current market price

Explanation

Question 28 of 33

1

At point b in exhibit 6-9, total utility is valued at

Select one of the following:

$30, consumer expenditure is $20, and consumer surplus is $10
$26, consumer expenditure is $20, and consumer surplus is $6
$20, consumer expenditure is $20, and consumer surplus is $0
$30, consumer expenditure is $4, and consumer surplus is $26

Explanation

Question 29 of 33

1

What happens to consumer surplus as price falls along a given demand curve?

Select one of the following:

it always increases
it always decreases
it never changes
it only increases if price increases just a little

Explanation

Question 30 of 33

1

when price decreases, consumer surplus

Select one of the following:

increases
remains constant
decreases
becomes negative

Explanation

Question 31 of 33

1

at point a in exhibit 6-9, consumer surplus is

Select one of the following:

$0
$5
$6
$20
$26

Explanation

Question 32 of 33

1

Elvis values the first gravy sandwich at $5, the second at $4.50, and the third at $4. If he buys three for $4 each, his consumer surplus is

Select one of the following:

$5
$4
$1.50
$9.50
$12

Explanation

Question 33 of 33

1

On a normal day, Emily Mapai's demand curve for a cup of hot chocolate is initially shown as D in exhibit 6-15. On a day when the high temperature does not get above zero degrees, her demand curve increases to D'. At price P for a cup of hot chocolate, Emily's consumer surplus on a freezing day

Select one of the following:

cannot be determined without calculating an exact marginal valuation
increases a great deal over her consumer surplus on a normal day
will vary depending on whether hot chocolate is a normal or an inferior good
increases only if her demand curve is unit elastic

	Created by mil8435 over 8 years ago

Mid Term II

Economics Ch. 6 Quiz

Question 1 of 33

Marginal utility is a measure

Select one of the following:

Explanation

Question 2 of 33

"the second glass of Evian water was very good. May I have another?" which of the following is necessarily true regarding this statement?

Select one of the following:

Explanation

Question 3 of 33

Total utility can be calculated as the

Select one of the following:

Explanation

Question 4 of 33

Demand curves usually slope downward because of the income and substitution effects, and because of the law of diminishing marginal utility

Select one of the following:

Explanation

Question 5 of 33

Newspaper vending machines illustrate that publishers believe

Select one of the following:

Explanation

Question 6 of 33

Diminishing marginal utility means that

Select one of the following:

Explanation

Question 7 of 33

The marginal utility of a second copy of today's New York Times is

Select one of the following:

Explanation

Question 8 of 33

Which of the following sayings describes the concept of diminishing marginal utility?

Select one of the following:

Explanation

Question 9 of 33

the reason you don't drink 5 cups of coffee at breakfast is that

Select one of the following:

Explanation

Question 10 of 33

Joe the economist tells his wife, Jane, that he wants to spend a weekend fishing with friends. She replies "you don't love me anymore". Just before she hits Joe with a croquet mallet, Joe explains to her that she has confused the concepts of

Select one of the following:

Explanation

Question 11 of 33

In exhibit 6-12, consumer surplus at a price of $2 is the difference between what consumers are willing to

Select one of the following:

Explanation

Question 12 of 33

Which area in exhibit 6-13 represents consumer surplus at market equilibrium?

Select one of the following:

Explanation

Question 13 of 33

Suppose I am willing to pay $300 for roller blades and I purchase them on sale for $200. My consumer surplus is

Select one of the following:

Explanation

Question 14 of 33

The consumers' surplus derived from the last unit of a good purchased

Select one of the following:

Explanation

Question 15 of 33

The market demand curve is

Select one of the following:

Explanation

Question 16 of 33

A measure of consumer surplus in any market is

Select one of the following:

Explanation

Question 17 of 33

Consumers derive consumer surplus whenever

Select one of the following:

Explanation

Question 18 of 33

For any given price, the more elastic the demand for a product is, the greater will be the consumer surplus

Select one of the following:

Explanation

Question 19 of 33

When a service, such as medical care, is provided free of charge,

Select one of the following:

Explanation

Question 20 of 33

Refer to exhibit 6-17. If D, D', and D" represents the demand curves for the only 3 consumers in the market, then the market quantity demanded at a price of $15 will be