Ch04 - CHAPTER 4 Individual and Market Demand MULTIPLE...

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CHAPTER 4 Individual and Market Demand MULTIPLE CHOICE Section 4.1 easy 1. Moving down along a demand curve for apples a. consumer well-being decreases. b. the marginal utility of apples decreases. c. the marginal utility of apples increases. d. both (a) and (b) are true. e. both (a) and (c) are true. easy 2. The change in the price of one good has no effect on the quantity demanded of another good. These goods are: a. complements. b. substitutes. c. both inferior. d. both Giffen goods. e. none of the above. easy 3. The price of good A goes up. As a result the demand for good B shifts to the left. From this we can infer that: a. good A is a normal good. b. good B is an inferior good. c. goods A and B are substitutes. d. goods A and B are complements. e. none of the above. easy 4. An individual demand curve can be derived from the curve. a. price-consumption b. price-income c. income-substitution d. income-consumption e. Engel curve easy 5. Which of the following is true at each point along a price consumption curve? a. Utility is maximized but income is not all spent. b. All income is spent, but utility is not maximized. c. Utility is maximized, and all income is spent. d. The level of utility is constant. moderate 6. Which of the following is true regarding income along a price consumption curve? a. Income is increasing. b. Income is decreasing. c. Income is constant. d. The level of income depends on the level of utility. 100
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CHAPTER 4 TEST BANK INDIVIDUAL AND MARKET DEMAND SIXTH EDITION moderate 7. Which of the following is true regarding utility along a price consumption curve? a. It is constant. b. It changes from point to point. c. It changes only if income changes. d. It changes only for normal goods. easy 8. The income-consumption curve a. illustrates the combinations of incomes needed with various levels of consumption of a good. b. is another name for income-demand curve. c. illustrates the utility-maximizing combinations of goods associated with every income level. d. shows the utility-maximizing quantity of some good (on the horizontal axis) as a function of income (on the vertical axis). easy 9. Which of the following pairs of goods are NOT complements? a. hockey sticks and hockey pucks. b. computer CPU’s and computer monitors c. on campus student housing and off campus rental apartments. d. all of the above. e. none of the above. easy 10. Which of the following goods has a low, but positive, income elasticity of demand? a. furniture. b. new cars. c. health insurance. d. all of the above. e. none of the above. 101
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TEST BANK CHAPTER 4 SIXTH EDITION INDIVIDUAL AND MARKET DEMAND easy 11. The curve in the diagram below is called a. the price-consumption curve. b.
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