Suppose a consumer buys only food and clothing. If the quantity of food bought decreases while that of clothing remains the same, their marginal utility from food will:
a. fall relative to the marginal utility of clothing.
b. rise relative to the marginal utility of clothing.
c. rise, but not as fast as their marginal utility of clothing rises.
d. fall, but not as fast as their marginal utility of clothing falls.
QUESTION 2The resource market comprises of households and firms where the firms sell their resources to the households.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3When the manager of a local movie theater raises the price of movie tickets from 7.50 to 8.50, his total revenue falls. This means that:
a. the demand for movie tickets is highly elastic.
b. the supply of movie tickets is perfectly elastic.
c. the supply of movie tickets is unit-elastic.
d. the demand for movie tickets is inelastic.
e. the supply of movie tickets is inelastic.
QUESTION 4Ben consumes soda and cheeseburgers. If his marginal utility from sodas is currently 20, and his marginal utility from cheeseburgers is 10, and the price of cheeseburgers is twice the price of sodas,
a. Ben is in equilibrium.
b. Ben should increase his soda consumption and decrease his cheeseburger consumption.
c. Ben should decrease his soda consumption and increase his cheeseburger consumption.
d. we cannot conclude that any of the above are correct.
QUESTION 5If the price of a product increases, the demand for the resource used in producing that product decreases.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6Which of the following is explained by the price elasticity of demand for a product?
a. The effect of changes in price on the supply of the product
b. The effect of changes in quantity on the supply of the product
c. The effect of changes in quantity on the price of the product
d. The effect of changes in price on the quantity demanded of the product
e. The effect of changes in price on the quantity supplied of the product
QUESTION 7Ben consumes soda and cheeseburgers. If his total utility from sodas is currently 40, and his total utility from cheeseburgers is 30, and the price of cheeseburgers is twice the price of sodas,
a. Ben is in equilibrium.
b. Ben should increase his soda consumption and decrease his cheeseburger consumption.
c. Ben should decrease his soda consumption and increase his cheeseburger consumption.
d. we cannot conclude that any of the above are correct.
QUESTION 8Because of their derived nature, resource markets are completely different from any other type of market studied by economists.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 9Minimum wage adversely affects unskilled workers who do not have work, aged 16 to 19.
a. True
b. False
Indicate whether the statement is true or false
Quick Reply
