Microeconomics Chapter 6 Test Questions
with Verified Answers
In microeconomic terms, the ability of a good or a service to satisfy wants is called: -
Ans -utility
an inferior good is a product - Ans -for which demand decreases as income
increases.
when economists attempt to predict the spending patterns of the US households, they will
typically view the _________ as a primary determining factor that influences the individual
consumption choices that each will make - Ans -income level of each household
the term __________ is used to describe the common pattern whereby each marginal unit of
a consumed good provides less of an addition to utility than the previous unit - Ans -
diminishing marginal utility
A decrease in consumer preference for a product, other things being equal, will cause: -
Ans -market demand to shift to the left
the typical pattern revealed in a budget constraint model shows that as the quantity
consumed rises, - Ans -total utility rises, but marginal utility falls.
which of the following occurs simultaneously with an income effect - Ans -
substitution effect
the term _________ refers to the additional utility provided by one additional unit of
consumption - Ans -marginal utility
1
Page
, How does the U.S. Bureau of Labor Statistics gather information with regard to the typical
consumption choices of Americans? - Ans -Consumer Expenditure Survey
For lunch, Wendy eats only salads or fruit & yogurt smoothies. Her weekly food budget is
$48. Each salad costs $6 and each smoothie costs $3. When deciding how much of each
good to buy, Wendy knows that 2 salads and 4 smoothies will give her a utility of 8. What is
Wendy's utility-maximizing point? - Ans -4 salads, 8 smoothies
approximately what portion of annual consumption is typically spent by american
households on shelter - Ans -one third
as a general rule, utility maximizing choices between consumption goods occur where the -
Ans -price ratio and marginal utilities ratio of two goods is equal.
The key assumption that accompanies the use of numbers for measuring utility is that: -
Ans -individuals choose based on their preferences.
the _________ arises when a price changes because consumers have an incentive to
consume less of the good with a relatively higher price and more of the good with a
relatively lower price - Ans -substitution effect
the step by step process of finding the choice with the highest total utility involves a
comparison of the - Ans -marginal utility gained and lost from different choices along
the budget constraint.
Even with wage increases, the supply curve of labor is most often inelastic for which of the
following? - Ans -Full time workers
2
Page
with Verified Answers
In microeconomic terms, the ability of a good or a service to satisfy wants is called: -
Ans -utility
an inferior good is a product - Ans -for which demand decreases as income
increases.
when economists attempt to predict the spending patterns of the US households, they will
typically view the _________ as a primary determining factor that influences the individual
consumption choices that each will make - Ans -income level of each household
the term __________ is used to describe the common pattern whereby each marginal unit of
a consumed good provides less of an addition to utility than the previous unit - Ans -
diminishing marginal utility
A decrease in consumer preference for a product, other things being equal, will cause: -
Ans -market demand to shift to the left
the typical pattern revealed in a budget constraint model shows that as the quantity
consumed rises, - Ans -total utility rises, but marginal utility falls.
which of the following occurs simultaneously with an income effect - Ans -
substitution effect
the term _________ refers to the additional utility provided by one additional unit of
consumption - Ans -marginal utility
1
Page
, How does the U.S. Bureau of Labor Statistics gather information with regard to the typical
consumption choices of Americans? - Ans -Consumer Expenditure Survey
For lunch, Wendy eats only salads or fruit & yogurt smoothies. Her weekly food budget is
$48. Each salad costs $6 and each smoothie costs $3. When deciding how much of each
good to buy, Wendy knows that 2 salads and 4 smoothies will give her a utility of 8. What is
Wendy's utility-maximizing point? - Ans -4 salads, 8 smoothies
approximately what portion of annual consumption is typically spent by american
households on shelter - Ans -one third
as a general rule, utility maximizing choices between consumption goods occur where the -
Ans -price ratio and marginal utilities ratio of two goods is equal.
The key assumption that accompanies the use of numbers for measuring utility is that: -
Ans -individuals choose based on their preferences.
the _________ arises when a price changes because consumers have an incentive to
consume less of the good with a relatively higher price and more of the good with a
relatively lower price - Ans -substitution effect
the step by step process of finding the choice with the highest total utility involves a
comparison of the - Ans -marginal utility gained and lost from different choices along
the budget constraint.
Even with wage increases, the supply curve of labor is most often inelastic for which of the
following? - Ans -Full time workers
2
Page
