Question 1

If the price of a movie ticket rises, the quantity demanded increases.

Accepted Answer

A) True 
 B)False

Question 2

Figure 2.3.1. 
-Look at the market for water in Figure 2.3.1. A movement from point B to point D is caused by a(n)

Accepted Answer

A)   fall in the price of water.
B)   rise in the price of water.
C)   decrease in the number of consumers.
D)   rise in the expected future price of water.
E)   fall in the expected future price of water.F) A) and D)
G) A) and E)

Question 3

The law of demand states that when price rises, quantity demanded increases.

Accepted Answer

A) True 
 B)False

Question 4

Franco the barber charges $15 for a haircut. He has 200 customers who each pay Franco $30 a month. Market demand for Franco's haircuts is

Accepted Answer

A)   200 haircuts per month.
B)   400 haircuts per month.
C)   15 dollars per haircut.
D)   6,000 dollars per month.
E)   200 customers per month.F) A) and B)
G) C) and D)

Question 5

Your marginal benefits from a choice depend on your opportunity costs.

Accepted Answer

A) True 
 B)False

Question 6

Charging people more for a product that has high marginal benefits is a bad business idea because people won't actually pay more.

Accepted Answer

A) True 
 B)False

Question 7

The diamond/water paradox can be explained by

Accepted Answer

A)   water having a low price relative to diamonds.
B)   water having high total benefits relative to diamonds.
C)   water having higher marginal benefits in the summer than in the spring.
D)   distinguishing between total benefits and price.
E)   distinguishing between total benefits and marginal benefit.F) D) and E)
G) A) and B)

Question 8

After an intense workout at the gym with nothing to drink, the marginal benefit of a Gatorade would

Accepted Answer

A)   depend on what other drinks were available.
B)   depend on the marginal cost.
C)   be equal to the marginal cost.
D)   be high.
E)   be low.F) A) and B)
G) C) and D)

Question 9

Which "other things" are not kept constant along a demand curve?

Accepted Answer

A)   income
B)   prices of related products
C)   the price of the product itself
D)   preferences
E)   all of the aboveF) C) and D)
G) A) and C)

Question 10

Figure 2.4.1.
-Look at Figure 2.4.1. A decrease in quantity demanded is

Accepted Answer

A)   a shift from D0 to D1.
B)   a shift from D1 to D0.
C)   a movement from point B to D.
D)   a movement from point D to B.
E)   none of the above.F) C) and D)
G) D) and E)

Question 11

Products and services that are rare and essential will typically have

Accepted Answer

A)   many alternatives.
B)   a high total benefit.
C)   a low price.
D)   a low marginal benefit.
E)   a high marginal benefit.F) A) and E)
G) All of the above

Question 12

Some sales managers are talking about business. Which quotation refers to a movement along the demand curve?

Accepted Answer

A)   "Since our competitors raised their prices, our sales have tripled."
B)   "Because it's been such a warm winter, our sales of wool scarves are down from last year."
C)   "We decided to cut our prices, and there has been a big increase in our sales."
D)   "The Green movement has made our biodegradable products best-sellers."
E)   None of the aboveF) A) and B)
G) A) and C)

Question 13

If the minimum age for buying beer was lowered to 16, the increase in the number of buyers increases the quantity demanded of beer.

Accepted Answer

A) True 
 B)False

Question 14

Figure 2.4.1.
-Look at Figure 2.4.1. An increase in quantity demanded is

Accepted Answer

A)   a shift from D0 to D1.
B)   a shift from D1 to D0.
C)   a movement from point B to D.
D)   a movement from point D to B.
E)   none of the above.F) C) and D)
G) A) and E)

Question 15

Smart choices are based on a comparison of expected benefits and opportunity costs.

Accepted Answer

A) True 
 B)False

Question 16

At $1.20 per litre you spent $240 on gasoline last month. Your

Accepted Answer

A)   marginal benefit must be less than 1.20 per litre.
B)   quantity demanded is 240 litres.
C)   quantity demanded is 1.20 dollars.
D)   quantity demanded is 240 dollars.
E)   quantity demanded is 200 litres.F) None of the above
G) B) and E)

Question 17

Phone data plans often charge a high price for the first 10 megabytes, a lower price for the next 100 megabytes, and a very low price for the next 1,000 megabytes. An economist would say this is because

Accepted Answer

A)   not many people have cell phones these days.
B)   marginal benefits decrease as you use more megabytes.
C)   marginal benefits always decrease as circumstances change.
D)   1,000 megabytes can be transmitted more cheaply than 100 megabytes.
E)   total benefits decrease as you use more megabytes.F) B) and E)
G) A) and B)

Question 18

Making a smart choice depends on what substitutes are available and what they cost.

Accepted Answer

A) True 
 B)False

Question 19

As the price of a product or service rises, smart consumers switch to cheaper substitutes and demand decreases.

Accepted Answer

A) True 
 B)False

Exam 2: Making Smart Choices: the Law of Demand

Phone data plans often charge a high price for the first 10 megabytes, a lower price for the next 100 megabytes, and a very low price for the next 1,000 megabytes. An economist would say this is because

Correct Answer
verified

If the minimum age for buying beer was lowered to 16, the increase in the number of buyers increases the quantity demanded of beer.

Correct Answer
verified

After an intense workout at the gym with nothing to drink, the marginal benefit of a Gatorade would

Correct Answer
verified

Charging people more for a product that has high marginal benefits is a bad business idea because people won't actually pay more.

Correct Answer
verified

At $1.20 per litre you spent $240 on gasoline last month. Your

Correct Answer
verified

Figure 2.3.1. -Look at the market for water in Figure 2.3.1. A movement from point B to point D is caused by a(n)

Correct Answer
verified

Figure 2.4.1. -Look at Figure 2.4.1. An increase in quantity demanded is

Correct Answer
verified

Figure 2.4.1. -Look at Figure 2.4.1. A decrease in quantity demanded is

Correct Answer
verified

Making a smart choice depends on what substitutes are available and what they cost.

Correct Answer
verified

As the price of a product or service rises, smart consumers switch to cheaper substitutes and demand decreases.

Correct Answer
verified

If the price of a movie ticket rises, the quantity demanded increases.

Correct Answer
verified

The diamond/water paradox can be explained by

Correct Answer
verified

Which "other things" are not kept constant along a demand curve?

Correct Answer
verified

Smart choices are based on a comparison of expected benefits and opportunity costs.

Correct Answer
verified

Franco the barber charges $15 for a haircut. He has 200 customers who each pay Franco $30 a month. Market demand for Franco's haircuts is

Correct Answer
verified

Your marginal benefits from a choice depend on your opportunity costs.

Correct Answer
verified

Products and services that are rare and essential will typically have

Correct Answer
verified

The law of demand states that when price rises, quantity demanded increases.

Correct Answer
verified

Some sales managers are talking about business. Which quotation refers to a movement along the demand curve?

Correct Answer
verified

Exam 2: Making Smart Choices: the Law of Demand

Phone data plans often charge a high price for the first 10 megabytes, a lower price for the next 100 megabytes, and a very low price for the next 1,000 megabytes. An economist would say this is because

Correct AnswerverifiedShow Answer

If the minimum age for buying beer was lowered to 16, the increase in the number of buyers increases the quantity demanded of beer.

Correct AnswerverifiedShow Answer

After an intense workout at the gym with nothing to drink, the marginal benefit of a Gatorade would

Correct AnswerverifiedShow Answer

Charging people more for a product that has high marginal benefits is a bad business idea because people won't actually pay more.

Correct AnswerverifiedShow Answer

At $1.20 per litre you spent $240 on gasoline last month. Your

Correct AnswerverifiedShow Answer

Figure 2.3.1. -Look at the market for water in Figure 2.3.1. A movement from point B to point D is caused by a(n)

Correct AnswerverifiedShow Answer

Figure 2.4.1. -Look at Figure 2.4.1. An increase in quantity demanded is

Correct AnswerverifiedShow Answer

Figure 2.4.1. -Look at Figure 2.4.1. A decrease in quantity demanded is

Correct AnswerverifiedShow Answer

Making a smart choice depends on what substitutes are available and what they cost.

Correct AnswerverifiedShow Answer

As the price of a product or service rises, smart consumers switch to cheaper substitutes and demand decreases.

Correct AnswerverifiedShow Answer

If the price of a movie ticket rises, the quantity demanded increases.

Correct AnswerverifiedShow Answer

The diamond/water paradox can be explained by

Correct AnswerverifiedShow Answer

Which "other things" are not kept constant along a demand curve?

Correct AnswerverifiedShow Answer

Smart choices are based on a comparison of expected benefits and opportunity costs.

Correct AnswerverifiedShow Answer

Franco the barber charges $15 for a haircut. He has 200 customers who each pay Franco $30 a month. Market demand for Franco's haircuts is

Correct AnswerverifiedShow Answer

Your marginal benefits from a choice depend on your opportunity costs.

Correct AnswerverifiedShow Answer

Products and services that are rare and essential will typically have

Correct AnswerverifiedShow Answer

The law of demand states that when price rises, quantity demanded increases.

Correct AnswerverifiedShow Answer

Some sales managers are talking about business. Which quotation refers to a movement along the demand curve?

Correct AnswerverifiedShow Answer

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