elasticity questions 1 If a television commercial which asserts - - PDF document

Utility winter 13.notebook 1 March 21, 2013

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Volunteer A Volunteer B Volunteer C

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Marginal Utility Total Utility

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Gym Visits per Week Utility from Gym Visits Marginal Utility from Gym Visits Movies per week Utility from Movies Marginal Utility from Movies 1 100 1 60 2 180 2 110 3 240 3 150 4 280 4 180 5 310 5 190 6 330 6 195 7 340 7 197

Damien has 14 hours per week to spend at the movies or the

• gym. Each movie visit and workout takes 2 hours. How

should he allocate his time?

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elasticity questions

Grade:«grade» Subject: Date:«date»

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1 If a television commercial which asserts that “the last bite tastes just as good as the first,” is correct, then the marginal utility of the advertised product must be: A Increasing B Constant C Decreasing D Zero

Utility winter 13.notebook 2 March 21, 2013

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2 Your marginal utility of hamburgers is: A is always greater than your total utility from hamburgers B is always greater than your average utility from hamburgers C is always greater than the price of hamburgers D depends on how many hamburgers you’ve already eaten

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3 As Shana’s consumption of tacos increases, her: A marginal utility from tacos increases B marginal utility from tacos decreases C total utility from tacos decreases D both total and marginal utility from tacos decrease

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4 Total utility will fall whenever: A marginal utility is falling. B marginal utility is rising. C marginal utility has reached a maximum. D marginal utility is zero. E marginal utility is negative.

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5 The more Mabel exercises, the more she enjoys each visit to the gym. This is an example of: A Diminishing marginal utility B Constant marginal utility C Increasing marginal utility

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6 Although Mei's classical DC collection is huge, her enjoyment from buying another CD has not changed as her collection has grown. This is an example of: A Diminishing marginal utility B Constant marginal utility C Increasing marginal utility

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7 When Dexter was a struggling student, his enjoyment from a good restaurant meal was greater than now, when he has them more frequently. This is an example of: A Diminishing marginal utility B Constant marginal utility C Increasing marginal utility

Utility winter 13.notebook 3 March 21, 2013

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8 The price elasticity of demand of a good is 1.25. Which of the following statements is correct? A the demand for the good is elastic. B the demand for the good is inelastic. C the good is a necessity D the good is a luxury

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9 The demand for a particular brand of toothpaste: A is more elastic than the demand for toothpaste, because toothpaste is a necessity. B is less elastic than the demand for toothpaste, because toothpaste is a necessity. C is more elastic than the demand for toothpaste, because a particular brand always has close substitutes D none of the above.

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10 The demand for a product is likely to be more elastic under which two of the following circumstances? A The time period involved is short. B Few close substitutes in consumption C The time period involved is long D Many close substitutes in consumption.

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11 A newspaper publisher decides to cut price in

• rder to raise circulation and revenue. This policy

is more likely to be successful when demand for the newspaper is which one of the following? A Unit elastic. B Perfectly inelastic. C Relatively inelastic. D Relatively elastic.

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12 Which of the following is likely to have the most elastic demand? A Food B Fruit C Bananas D Dole brand bananas

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13 The greater the elasticity of supply: A the more an increase in demand will increase price B the more an increase in demand will increase quantity C the steeper the supply curve, all else equal D the more likely the product has no close substitutes

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Attachments Marginal.ppt