Question

47. If a firm raised its price and discovered that its total revenue fell, then the demand for its product is ___________

a. relatively inelastic

b. perfectly inelastic

c. income inferior

d. relatively elastic

48. If demand is (relatively) price inelastic, total revenue is ___________

a. directly related to quantity demanded

b. inversely related to price

c. inversely related to quantity demanded

d. directly related to price

e. unrelated to price

51. In order to prove that Budweiser and Miller Genuine Draft are substitutes, one should test the _________ and get a ___________

a. price elasticity of demand; number less than 1

b. income elasticity; positive number

c. cross-price elasticity; positive number

d. price elasticity of demand; number greater than 1

e. cross-price elasticity; negative number

52. If the cross-price elasticity of demand between two goods is 0, (e.g. hotdogs & catsup)

a. neither demand curve would shift following a change in the price of one of the goods

b. the demand for each good is perfectly price elastic

c. there is no income effect between the two goods

d. the demand for each good is perfectly price inelastic

e. there is no substitution effect between the two goods

56. The marginal utility (MU) of a second copy of today's The Wall Street Journal is ___________

a. practically 0

b. positive, but diminishing

c. infinite

d. equal to the first copy

e. $1

57. “I don't feel so good. I shouldn't have had that last slice of pizza.” Which statement best describes this situation?

a. the total utility from eating pizza is negative

b. the MU of the last slice was negative

c. the marginal utility (MU) of the last slice was positive

d. the MU of pizza is still increasing

e. next time you eat, you'll definitely have tacos instead of pizza

Answer 1

Answer 1: Option D is correct.As price of the product increases than the total revenue has been fell down as price elasticity of the product is relative elastic with the price of the product in the market place.

Answer 2 : Option D is correct.If the demand is price inelastic , than total Revenue is directly related to price because as price increases than total revenue also increases as demand of the product has not been affected.

Answer 3: Option C is correct. In order to prove that Budweiser and Miller Geniune Draft shows that they are Substitute through cross price elasticity of demand and tell us about that when there is a positive number.

Answer 4: Option A is correct. If cross price elasticity of goods are zero than demand for one good is independent of the price of another good in the same market place.

Answer 5: Option A is correct. The marginal utility of second copy of today wall street journal is equal to zero.It means that it starts declining at the faster phase.

Answer 6: Option B is correct. The statement is correct. The Marginal utility of second slice of pizza is negative as consumer does not feel good in eating that last size of pizza as they are not able to consume properly.