11)The concept based on the assumption that we get bargains on each unit we purc
ID: 2439065 • Letter: 1
Question
11)The concept based on the assumption that we get bargains on each unit we purchase until the last one is called
-marginal utility.
-total utility.
-the law of diminishing marginal utility.
-consumer surplus.
12) When demand is elastic,
-the percentage change in price is greater than the percentage change in quantity demanded.
-price increases raise total revenue.
-the elasticity coefficient is greater than zero, but less than one.
-the buyer is sensitive to changes in price.
13) If consumers are price sensitive, then
-they will have no demand curve.
-they will not shop around very much.
-they will have inelastic demand curves.
-they will have elastic demand curves.
14) In the long run, all costs are ______________.
-equal to zero
-fixed
-variable
-None of the choices are correct.
15
-3 units
-2 units
-4 units
-1 unit
16) An increase in supply means that the quantity supplied
-does not rise at any price.
-increases at most prices.
-increases at all prices.
-increase only at the equilibrium price.
17) If demand is elastic and price is lowered, total revenue will
-stay the same.
-possibly rise and possibly fall.
-fall.
-rise.
18) If income elasticity for a good or service is _______, then we can say that the good or service is ______.
-positive; inferior
-zero; normal
-negative; inferior
-negative; normal
19) The imposition of a tax on a good or service would be represented as
-an increase in demand.
-an increase in supply.
-a decrease in demand.
-a decrease in supply.
20) Cross elasticity of demand measures the response in
-quantity of one good demanded when the quantity demanded of another good changes.
-the price of a good to a change in the quantity of another good demanded.
-the quantity of one good demanded to a change in the price of another good.
-the income of consumers to the change in the price of goods.
microeconomic
Explanation / Answer
12. -the buyer is sensitive to changes in price.
Elasticity of demand means how change in price affect change in quantity demanded.
13. -they will have elastic demand curves.
Elastic demand curve means change in price causes more change in quantity demanded.
14. -variable
In short run, some costs are fixed while some are variable. But in long run, all costs become variable.
15. -3 units
Demand curve shows units of output a consumer buy at different price levels.
16. -increases at all prices.
Increase in supply means rightward shift of supply curve which depicts increase in quantity supplied at all the price level.
17. -rise
Increase in quantity demanded is greater than decrease in price. This resulted into increase in total revenue.
18. -negative; inferior
Negative income elasticity of demand means increase in income decreases demand of good. Inferior goods are those goods whose income effect is negative.
19. -a decrease in supply.
Tax increases the cost of production of firm so firm decreases supply of good in the market. It causes leftward shift of supply curve.
20. - the quantity of one good demanded to a change in the price of another good.
Cross price Ed = % change in quantity demanded of good X / % change in price of good Y
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