QUESTION 1 The rational consumer is constantly striving to maximize his: A. secu
ID: 1222921 • Letter: Q
Question
QUESTION 1
The rational consumer is constantly striving to maximize his:
A.
security
B.
leisure
C.
utility
D.
profits
3 points Save Answer
QUESTION 2
Refer to Table A. The marginal utility of the fifth widget is:
TABLE A
Widgets
Utility
0
0
1
80
2
150
3
190
4
220
5
235
6
245
7
250
8
252
A.
15
B.
10
C.
220
D.
235
3 points Save Answer
QUESTION 3
TABLE A
Widgets
Utility
0
0
1
80
2
150
3
190
4
220
5
235
6
245
7
250
8
252
For this consumer, as he consumes more widgets his total utility is:
A.
rising
B.
falling
C.
remaining constant
D.
cannot be determined with the information given.
3 points Save Answer
QUESTION 4
TABLE A
Widgets
Utility
0
0
1
80
2
150
3
190
4
220
5
235
6
245
7
250
8
252
For this consumer, as he consumes more widgets his marginal utility is:
A.
rising
B.
falling
C.
staying the same
D.
cannot be determined with the given information.
3 points Save Answer
QUESTION 5
The relationship between the price of an item and the resulting quantity that will be demanded is:
A.
direct
B.
inverse
C.
constant
D.
none of the above
3 points Save Answer
QUESTION 6
One reason for this relationship between price and quantity demanded (as cited in question 5) is that when the price of an item rises, ceteris paribus, the opportunity cost of making that purchase will:
A.
rise
B.
fall
C.
stay constant
D.
cannot be determined with the information given.
3 points Save Answer
QUESTION 7
When the opportunity cost of making a purchase changes, ceteris paribus:
A.
The quantity of that good demanded will change in the same direction.
B.
The quantity of that good demanded will change in the opposite direction.
C.
The quantity of that good demanded will not change.
D.
The quantity of that good demanded will change, but more information is needed to determine the direction of change.
3 points Save Answer
QUESTION 8
The relationship between the opportunity cost (or relative expensiveness) of purchasing an item and the quantity of that item demanded is known as the:
A.
The supply effect
B.
Income effect
C.
Substitution effect
D.
None of the above, there is no relationship between the opportunity cost of purchasing an item and the quantity demanded.
3 points Save Answer
QUESTION 9
When the price of an item rises, ceteris paribus, the consumer's real income will:
A.
rise
B.
fall
C.
remain constant
D.
cannot be determined from the given information.
3 points Save Answer
QUESTION 10
The relationship referred to in question 9 is known as the:
A.
Opportunity Cost
B.
Consumer effect
C.
Substitution effect
D.
Income effect
Explanation / Answer
Question 1:
The rational consumer is constantly striving to maximize his:
C. utility.
QUESTION 2:
The marginal utility of the fifth widget is:
A. 15.
QUESTION 3:
For this consumer, as he consumes more widgets his total utility is:
A. rising.
QUESTION 4:
For this consumer, as he consumes more widgets his marginal utility is:
B. falling.
QUESTION 5:
The relationship between the price of an item and the resulting quantity that will be demanded is:
B. inverse.
QUESTION 6:
A. rise.
QUESTION 7:
When the opportunity cost of making a purchase changes, ceteris paribus:
A. The quantity of that good demanded will change in the same direction.
QUESTION 8:
The relationship between the opportunity cost (or relative expensiveness) of purchasing an item and the quantity of that item demanded is known as the:
C. Substitution effect.
QUESTION 9:
When the price of an item rises, ceteris paribus, the consumer's real income will:
B. fall.
QUESTION 10:
The relationship referred to in question 9 is known as the:
D. Income effect.
*****
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