EC 201 Fall 2009 Q3

EC 201 Fall 2009 Q3 - Principles of Economics EC 201 Cal...

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Principles of Economics EC 201 Cal Poly Pomona Dr. Bresnock Fall, 2009 Quiz 3 (15 points) RESEND – DO THIS ONE!!!! Choose the best answer to each question and mark it on your answer form. Use Scantron 815-E for this purpose. You must also write in explanations for each answer choice and provide a brief reason as to why the answer is correct or incorrect. Spaces have been allocated on the quiz for the purpose of either writing in or typing in your explanations. You must turn in your quiz with the explanations and your scantron to this quiz on Weds., Oct. 21 st at class lecture. 1. When the price of one fruit increases, consumers buy more of another fruit. This situation is an illustration of: A) the income effect. B) the substitution effect. C) diminishing marginal utility. D) the rationing function of prices. A) B) C) D) 2. Which statement best illustrates the concept of diminishing marginal utility? A) For most people, an increase in the price of a bag of potato chips will decrease the consumption of potato chips. B) The more bags of potato chips a person eats, the less additional satisfaction the person gets from eating another bag. C) The number of bags of potato chips a person buys will diminish based on the person's level of income. D) A person will continue to buy bags of potato chips until the cost of a substitute product such as bags of popcorn falls in price. A) B) C) D)
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Use the following to answer question 3: The table below shows the market demand for a bushel of wheat in a market where there are just three buyers (data are hypothetical).
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This note was uploaded on 06/04/2010 for the course ECON 201 taught by Professor Dr.jaques during the Fall '08 term at Cal Poly Pomona.

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EC 201 Fall 2009 Q3 - Principles of Economics EC 201 Cal...

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