micro7Q

micro7Q - Micro Chapter 7 Study Guide Questions Multiple...

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Micro Chapter 7 Study Guide Questions Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. A 15 percent increase in the price of beef reduces the quantity of beef consumed by 30 percent. Thus, the demand for beef is _______, and total consumer expenditure (or total firm revenue) will _______ as a result of the price increase. a. elastic; increase b. elastic; decrease c. inelastic; increase d. inelastic; decrease ____ 2. Which of the following is true about marginal benefit? a. A consumer's marginal benefit is equal to the height of her demand curve. b. Consumers will continue to purchase up until the point where marginal benefit equals price. c. Marginal benefit declines as consumption increases because of the law of diminishing marginal utility. d. All of the above are true. ____ 3. An inferior good is distinguished by a a. negative price elasticity of demand. b. positive price elasticity of demand. c. positive income elasticity of demand. d. negative income elasticity of demand. ____ 4. If Joe's income increased, and as a result, he purchased more wine and less fast food, a. wine is a normal good and fast food is an inferior good for Joe. b. wine is an inferior good and fast food is a normal good for Joe. c. both wine and fast food are inferior goods for Joe. d. both wine and fast food are normal goods for Joe. ____ 5. "After eating nothing but fast-food hamburgers on spring break, I was anxious to return home and eat something different." This statement most clearly reflects the law of a. the budget constraint. b. consumer irrationality. c. greater demand elasticity with time.
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This note was uploaded on 04/13/2008 for the course ECO 2023 taught by Professor Mccaleb during the Spring '08 term at FSU.

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micro7Q - Micro Chapter 7 Study Guide Questions Multiple...

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