Question

Consumer surplus does not exist because some consumers cannot afford to purchase the product at all.

True

False

2 points   

QUESTION 26

All consumers in the market enjoy a consumer surplus.

True

False

2 points   

QUESTION 27

If advertising is successful,

The demand becomes more elastic.

The demand curve shifts to the left.

The demand curve shifts to the right and becomes steeper.

The demand curve shifts to the left, and demand becomes more price-elastic.

2 points   

QUESTION 28

If a good had a zero price (i.e., the good was free), a rational person would consume

An infinite amount of the good.

The good until total utility was zero.

The good until the marginal utility was maximized.

The good until the marginal utility of the last unit was zero.

2 points   

QUESTION 29

The In the News article titled "Men vs. Women: How They Spend" differentiates the spending habits of women and men: "Men spend almost twice as much as women do on electronic equipment … young women spend twice as much money on clothing, personal care items, and their pets." Which determinant of demand is most likely involved?

Income.

Tastes.

Expectations.

Other goods (availability and prices).

2 points   

QUESTION 30

When sellers price discriminate,

They are attempting to charge a price that is the maximum price each individual is willing to pay.

They are trying to pit one group of buyers against another.

They are trying to find a minimum price the individual is willing to pay.

They are taking an illegal action.

2 points   

QUESTION 31

Sellers can gain profits from price discrimination because

Charging different prices based on willingness to pay can increase revenues.

Total expenses are less with price discrimination.

Total revenues are maximized when all buyers pay the same price.

Different prices charged to different customers can lower total revenue.

2 points   

QUESTION 32

Economists accept consumer tastes as given and focus on

How price will affect actual consumer purchases.

How culture affects consumer preferences.

How advertising molds consumer desires.

What consumers desire.

2 points   

QUESTION 33

An indifference curve shows the

Maximum utility that can be achieved for a given consumer budget.

Maximum utility that can be achieved for different amounts of a good.

Combinations of goods giving equal utility to a consumer.

Optimal consumption combinations between two goods.

2 points   

QUESTION 34

Marginal utility is

The sum of the total utility of consuming a certain amount of a good.

The additional utility a consumer enjoys from the consumption of one more unit of a good.

The diminishing nature of total utility.

Always negative or zero.

2 points   

QUESTION 35

Assume that Anna buys peanut butter and bread. If the price of peanut butter falls, then

One end of her budget constraint will move away from the origin.

Her entire budget constraint will shift toward the origin.

Her entire budget constraint will shift away from the origin.

Her indifference curves will shift away from the origin.

2 points   

QUESTION 36

According to the law of demand, ceteris paribus,

The quantity demanded increases at lower prices.

A consumer will purchase more of a good at higher prices than at lower prices.

Price and quantity supplied are directly related.

The responsiveness of consumer demand to a change in the price of a good is measured by the price elasticity of demand.

2 points   

QUESTION 37

Total utility is maximized when

Price is less than marginal utility.

Price is equal to marginal utility.

Marginal utility is zero.

Marginal utility is maximized.

2 points   

QUESTION 38

Two indifference curves can cross one another.

True

False

2 points   

QUESTION 39

When choosing among products, consumers look at

The marginal utility per dollar and their budget constraint.

The total utility that will be gained at the end of all consumption.

Only their budget.

The marginal utility of the good.

2 points   

QUESTION 40

Which of these examples is an example of price discrimination?

Goods are marked down on sale.

Wholesale prices differ from retail prices.

Seniors pay one price at the movie theater and adults pay more.

Cereal manufacturers put discount coupons inside their cereal boxes.

2

Answer 1

Answer.)

Q25.) FALSE

Consumer surplus is defined as the benefit some buyers get when they are actually willing to pay more for a good than the actual price. Remember that demand is the willingness and ability of consumers to purchase a good; there are individuals who cannot afford a good at the market price, but this does not negate the fact that some buyers still enjoy a surplus

Q26.) FALSE

Remember that demand is the willingness and ability of consumers to purchase a good; there are individuals who cannot afford a good at the market price.

Q27.) The demand curve shifts to the right and becomes steeper.

Q28.) The good until the marginal utility of the last unit was zero.

utility is maximized by consuming each good until its marginal utility reaches zero

Q29.) Tastes.

Demand also depends on an individual's taste for the item. In general, economists use the term "tastes" as a catchall category for consumers' attitude towards a product.

Q30.) They are attempting to charge a price that is the maximum price each individual is willing to pay.

1st Degree Price Discrimination, also known as perfect price discrimination, essentially states the company charges the consumer the maximum price that individual is willing to pay for that product.