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Question
Refer to the following figure to answer the following questions:
Diminishing marginal utility
a. occurs when the additional utility for each good declines as consumption increases.
b. is the additional satisfaction derived from consuming one more unit of a good or service.
c. is the combination of goods and services that maximizes utility for a given income.
d. occurs when a consumer buys more of a good as a result of a relative price change.
e. occurs when there is a change in purchasing power as a result of a change in the price of a good.
Answer
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Related questions
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When the price elasticity of demand is elastic, a consumer is
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b. relatively unresponsive to a change in price.
c. unaffected by a change in price.
d. relatively responsive to a change in price.
e. completely responsive to a change in price.
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If the price elasticity of demand for Good A is - 0.2 and the price increases from $2.25 to $2.75, the percentage change in the quantity demanded of Good A is
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b. 100 percent.
c. 4.0 percent
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e. unknown because not enough information is provided.
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Price gouging laws will usually result in ________ the product in the distressed market.
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b. more local business start-ups to supply
c. government setting up an agency to regulate supply of
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The economic entity most likely to engage in price gouging is
a. the manufacturer of the product, such as a Honda generator.
b. a national big-box store, such as Target or Walmart.
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Q:
The long-run effects of rent control support one of the five foundations of economics, namely, that
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b. society faces a trade-off between homelessness and rent control.
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A real-life, long-run example of a binding price ceiling isa. a minimum wage law. b. rent control. c. a price gouging law.d. a black market price.e. a ration price.
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What will an individual do differently as a buyer in the black market in the long run?
a. He or she will substitute away from the product.
b. He or she will substitute toward the product.
c. When a binding price floor exists, he or she will be willing to pay a higher price.
d. When a binding price ceiling exists, he or she will be willing to pay a lower price.
e. What he or she does as a buyer in the long run will be no different from what he or she does in the short run.
Q:
What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
c. A shortage will continue to exist and will grow larger over time.
d. A shortage will continue to exist and will grow smaller over time.
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Q:
Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
a. Prices in the legal market in the community with a binding price ceiling will rise.
b. Prices in the legal market in the community with a binding price ceiling will fall.
c. There will be shortages in the community with a binding price ceiling.
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b. The binding price ceiling will discourage patients from obtaining the drugs they need.
c. The binding price ceiling will increase the likelihood that consumers will obtain needed drugs on the black market.
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e. The binding price ceiling will cause firms to spend too much time making a drug without any flaws.
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One strategy someone might use to be elected mayor of a university town is to place a binding price ceiling on rent for student apartments. What will happen if he or she gets elected and is able to pass such a law?
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Suppose Kate lives in a community with no price controls. What could she expect will happen if her town borders a community where there is a nonbinding price ceiling on most products?
a. Legal market prices will rise in the community with a binding price ceiling.
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c. The price and the quantity sold in the community without a nonbinding price ceiling will be the same as the price and quantity in the community with a nonbinding price ceiling.
d. There will be more shortages in the community with a binding price ceiling.
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Q:
Why would a politician find it difficult to remove a binding price ceiling?
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Which of the following is an accurate statement about the consequence of a binding price floor?
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b. Binding price floors encourage the formation of a black market.
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Taxing goods with very inelastic supply generates less deadweight loss than taxing goods with very elastic supply because
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c. the change in producer behavior is smaller.
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e. the change in producer behavior is greater.
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Taxing goods with very inelastic demand generates less deadweight loss than taxing goods with very elastic demand because
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e. the change in consumer behavior is greater.
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A(n) ________ in the elasticity of supply or demand in a market for a good that is taxed would tend to ________ who is legally responsible for paying the tax.a. decrease; broaden b. decrease; have no effect on c. increase; broadend. increase; narrowe. increase; have no effect on
Q:
Peanut butter and jelly are complements. If a tax is imposed on peanut butter, how will that affect the market for jelly?
a. Demand for jelly will increase along with the price.
b. Demand for jelly will decrease along with the price.
c. The supply of jelly will increase and the price will decrease.
d. Both the supply and demand for jelly will increase along with the price.
e. The supply of jelly will decrease and the price will increase.
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A tax on milk would likely cause a decrease in the price ofa. ice cream. b. cheese. c. soymilk.d. nondairy creamer.e. breakfast cereal.
Q:
A tax creates no deadweight loss only when either supply or demand isa. somewhat elastic. b. perfectly elastic. c. perfectly inelastic.d. increasing.e. decreasing.
Q:
The deadweight loss from a tax is likely to be less with a good that hasa. few complements. b. many substitutes. c. few substitutes.d. an elastic demand.e. an elastic supply.