Homework Answers
Answer-33 The correct option is D.) Total utility.
Answer-34 The correct option is A.) Beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer.
Answer-35 The correct option is D.) All of the above
Answer-36 The correct option is A.) Percentage change in quantity demanded/percentage change in price
Answer-37 The correct option is A.) The minimum
Answer-38 The correct option is D.) Highest marginal utility to price ratio.
Answer-39 The correct option is D.) Normal
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3) he theory of consumer behavior assumes that consumers attempt to maximize A) marginal utility. 1)...
2 . 8) Diminishing marginal utility means that A) marginal utility decreases as consumption decreases. B)...
2 . 8) Diminishing marginal utility means that A) marginal utility decreases as consumption decreases. B) marginal utility increases as consumption increases. C) marginal utility decreases as consumption increases. D) total utility decreases as marginal utility decreases E) total utility decreases as marginal utility increases. 9) Which of the following is the best example of how the invisible hands works? A) The government places restrictions on prices of products, B) The government decides to force firms to produce more electricity....
1. Which of the following statements best describes the law of diminishing marginal utility? Consumers will...
1. Which of the following statements best describes the law of diminishing marginal utility? Consumers will purchase more of a good at a lower price, ceteris paribus. Consumers maximize total utility when the marginal utility per dollar spent is equal for all goods consumed. Each successive unit of a good consumed yields less additional utility. Consumers behave rationally when the price of a good equals the marginal utility of the good. 2. Assume the price elasticity of demand for Nike...
Match the following terms with their definition (some terms may be used more than once). A....
Match the following terms with their definition (some terms may be used more than once). A. Inelastic demand B. Consumer surplus C. Elastic demand D. Cross-price elasticity if demand E. Price elasticity of supply F. Deadweight loss G. Economic efficiency H. Producer surplus I. None of the above 1. The difference between the highest price a consumer is willing to pay for a good or service and the actual price the consumer pays 2. The difference between the price a...
Can you answer these questions? 11. Suppose that MUr/Pr exceeds MUyl/Py. To maximize utility the consumer who is spending all her money income should buy A. less of X only if its price ris...
Can you answer these questions?
11. Suppose that MUr/Pr exceeds MUyl/Py. To maximize utility the consumer who is spending all her money income should buy A. less of X only if its price rises. B. more of Y only if its price rises. C. more of Y and less of X. D. more of X and less of Y 12. In purchasing products A and B, a consumer is in equilibrium when: 13. The diamond-water paradox atises because: A. essential...
B 1. Suppose that a 20 percent increase in the price of normal good Y causes...
B 1. Suppose that a 20 percent increase in the price of normal good Y causes a 10 percent decline in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is: A. negative and therefore these goods are substitutes. 10 B. negative and therefore these goods are complements. C. positive and therefore these goods are substitutes. D. positive and therefore these goods are complements. 2. To maximize utility a consumer should allocate money income so...
1. Calculating the price elasticity of demand: A step-by-step guide Suppose that during the past year,...
1. Calculating the price elasticity of demand: A step-by-step guide Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,940. During the same time period, consumer sales decreased from 450,000 to 322,000 laptops. Calculate the price elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. Percentage Change Absolute Change Average (in decimals) Quantity Demanded Price...
1.Price elasticity of demand indicates the consumer response to changes in: A. Quantity B. Demand C....
1.Price elasticity of demand indicates the consumer response to changes in: A. Quantity B. Demand C. Price D. All of the above 2.If the price elasticity of demand for a product is −2, this means that, ceteris paribus, quantity demanded will increase by A. 2 units for each $1 decrease in price. B. 1 unit for each $2 decrease in price. C. 2 percent for each 1 percent decrease in price. D. 1 percent for each 2 percent decrease in...
A consumer uses his income I for the consumption of two goods ?1 and ?2. He maximises utility at given product prices ?1...
A consumer uses his income I for the consumption of two goods ?1 and ?2. He maximises utility at given product prices ?1, ?2. His preferences with respect to both products can be described by an ordinal utility function ?(?1,?2), which exhibits a decreasing marginal rate of substitution (normal preferences). Please indicate whether the following statements are right or wrong in this context. If a statement is wrong, then describe briefly what is wrong (one sentence). a) A double value...
Optimal Consumption of good x and good y: Maximization Rule - Maximization of Utility given a...
Optimal Consumption of good x and good y: Maximization Rule - Maximization of Utility given a Budget Constraint = Marginal Utility of good x/Price of good x = Marginal Utility of good y/Price of y Calculate Consumption Bundle using the following information: Price of Good x = $5, Price of Good y = $16 and Income = $100 / 0 Quantity Consumed Total Utility Quantity Consumed Total Utility Calculate: a.) Price Elasticity of Demand =% Change in Quantity Demanded/%Change in...
ECN 211-TEST #3A-CHPATER 6-ELASTICITY-(45questions) Verma #1 PLEASE DO NOT WRITE ON THE TEST: SCRATCH PAPERS ARE...
ECN 211-TEST #3A-CHPATER 6-ELASTICITY-(45questions) Verma #1 PLEASE DO NOT WRITE ON THE TEST: SCRATCH PAPERS ARE AVAILABLE 1. The price clasticity of demand measures: A. the responsiveness of price to a change in competition B. the change in quantity demanded due to a change in price of a substitute good C the responsiveness of quantity demanded to a change in price D, the change in price due to a change in demand 2. The basic formula for the price elasticity...
2 . 8) Diminishing marginal utility means that A) marginal utility decreases as consumption decreases. B) marginal utility increases as consumption increases. C) marginal utility decreases as consumption increases. D) total utility decreases as marginal utility decreases E) total utility decreases as marginal utility increases. 9) Which of the following is the best example of how the invisible hands works? A) The government places restrictions on prices of products, B) The government decides to force firms to produce more electricity....
Can you answer these questions?
11. Suppose that MUr/Pr exceeds MUyl/Py. To maximize utility the consumer who is spending all her money income should buy A. less of X only if its price rises. B. more of Y only if its price rises. C. more of Y and less of X. D. more of X and less of Y 12. In purchasing products A and B, a consumer is in equilibrium when: 13. The diamond-water paradox atises because: A. essential...
B 1. Suppose that a 20 percent increase in the price of normal good Y causes a 10 percent decline in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is: A. negative and therefore these goods are substitutes. 10 B. negative and therefore these goods are complements. C. positive and therefore these goods are substitutes. D. positive and therefore these goods are complements. 2. To maximize utility a consumer should allocate money income so...
1. Calculating the price elasticity of demand: A step-by-step guide Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,940. During the same time period, consumer sales decreased from 450,000 to 322,000 laptops. Calculate the price elasticity of demand between these two price-quantity combinations by using the following steps. After each step, complete the relevant part of the table with the appropriate answers. Percentage Change Absolute Change Average (in decimals) Quantity Demanded Price...
Optimal Consumption of good x and good y: Maximization Rule - Maximization of Utility given a Budget Constraint = Marginal Utility of good x/Price of good x = Marginal Utility of good y/Price of y Calculate Consumption Bundle using the following information: Price of Good x = $5, Price of Good y = $16 and Income = $100 / 0 Quantity Consumed Total Utility Quantity Consumed Total Utility Calculate: a.) Price Elasticity of Demand =% Change in Quantity Demanded/%Change in...
ECN 211-TEST #3A-CHPATER 6-ELASTICITY-(45questions) Verma #1 PLEASE DO NOT WRITE ON THE TEST: SCRATCH PAPERS ARE AVAILABLE 1. The price clasticity of demand measures: A. the responsiveness of price to a change in competition B. the change in quantity demanded due to a change in price of a substitute good C the responsiveness of quantity demanded to a change in price D, the change in price due to a change in demand 2. The basic formula for the price elasticity...
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