Question

Please answer all the ten questions.

Question 10

A demand or supply curve with ______________ would be vertical in appearance.

Group of answer choices

zero elasticity

middle elasticity

infinite elasticity

unitary elasticity

Question 11

Jean has $50 per week in her entertainment budget. She splits her time between going to the movies and yoga classes. Each movie costs $10 while each yoga class costs $5. The total utility from each of these activities is set out in the table below. What is Kim's total utility maximizing point?

Movies	Total Utility	Yoga Classes	Total Utility
0	0	0	0
1	40	1	30
2	75	2	57
3	105	3	81
4	130	4	96
5	140	5	106
		6	114
		7	116
		8	117

Group of answer choices

1 movie, 5 yoga classes

3 movies, 4 yoga classes

5 movies, 8 yoga classes

2 movies, 2 yoga classes

Question 12

When Ariana chooses to only purchase a combination of goods that lie within her budget line, she:

Group of answer choices

must reduce the quantity

is maximizing utility

likely has negative savings

is decreasing utility

Question 13

One characteristic of "utils" is that

Group of answer choices

utils are not subjective to an individual.

you can't compare the level of utils between different people.

utils are measured consistently from person to person.

5 utils to me means the same thing as 5 utils to you.

Question 14

As a general rule, utility-maximizing choices between consumption goods occur where the:

Group of answer choices

combined marginal utilities of the goods is the highest.

marginal utility divided by price for one good is equal to the marginal utility divided by price for the other good.

combined marginal utilities of the goods is the lowest.

higher-income households have the greatest satisfaction.

Question 15

As more units of a good are consumed, marginal utility will tend to

Group of answer choices

be indeterminate.

decrease.

increase.

stay constant.

Question 16

Substitution and income effects of a change in price of a good may be used to explain the:

Group of answer choices

inverse relationship between price and quantity demanded.

direct relationship between price and quantity supplied.

direct relationship between price and quantity purchased.

direct relationship between income and demand.

Question 17

James has a part-time job in a book store to help pay for his college. He can work up to 35 hours each week at his job, which pays $9 per hour. The table below shows his utility from different levels of leisure and income. Troy currently works 20 hours per week. If he decides to work 35 hours instead, his marginal utility gain from the additional income is _____.

Hours of Leisure	Total Utility from Leisure	Income	Total Utility from Income
0	0	0	0
5	18	45	30
10	34	90	54
15	48	135	72
20	56	180	81
25	60	225	87
30	62	270	90
		315	92

Group of answer choices

6

11

3

9

Question 18

Suppose each semester you have at most $350 to spend on taking an elective course. Your options are a literature course which costs $300 or a creative writing course which costs $200. Your marginal utility for taking the literature course next semester is 1,500 and your marginal utility for taking the creative writing course next semester is 1,200. That means, next semester

Group of answer choices

you will take both courses.

you will not have a clear choice between the two courses.

you will choose to take the literature course.

you will choose to take the creative writing course.

Question 19

A normal good is a product:

Group of answer choices

that has an upward sloping demand curve.

for which demand decreases as income decreases.

for which there is no demand.

for which demand decreases as income increases.

Question 20

When adding more and more workers, but leaving other resources fixed, eventually the marginal product of each worker will

Group of answer choices

decrease.

reach infinity.

move indeterminately.

increase.

Answer 1

Question 10

Zero elastiicy. Whatever is the change in price, the quantity demanded or supplied remains the same.

Question 11