Econ 122 Exam 2

39 Questions | Total Attempts: 66

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Econ Quizzes & Trivia

In Economics, we believe that utility is the amount of satisfaction that a good or service brings. The quiz below tests and advances your knowledge on the different aspects of economics, which include price and utility.


Questions and Answers
  • 1. 
    The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called
    • A. 

      The substitution effect

    • B. 

      The income effect

    • C. 

      Consumer surplus

    • D. 

      Producer surplus

  • 2. 
    In a city with rent controlled apartments, all of the following are true except?
    • A. 

      It usually takes more time to find an apartment than it would without rent control

    • B. 

      Landlords have an incentive to rent more apartments than they would without rent control

    • C. 

      Apartments are often in shorter supply than they would be without rent control

    • D. 

      Apartments usually rent for rates lower than the market rate

  • 3. 
    Paul goes to sportsmart to buy a new tennis racquet.  He is willing to pay $200 for a new racquet, but buys one on sale for $125.  Pauls consumer surplus from the purchase is
    • A. 

      $325

    • B. 

      $200

    • C. 

      $125

    • D. 

      $75

  • 4. 
    The marginal benefit is equal to the _____ benefit to a consumer receives from consuming one more unit of a good or service
    • A. 

      Additional

    • B. 

      Surplus

    • C. 

      Total

    • D. 

      Unintended

  • 5. 
    Arnolds marginal benefit from consuming the third burrito is
    • A. 

      $1.25

    • B. 

      $1.50

    • C. 

      $2.50

    • D. 

      $6.00

  • 6. 
    The table above lists the highest prices three consumers, Tom, Dick and Harriet, are willing to pay for a short-sleeved polo shirt.  If the price of one of the shirts is $28 dollars
    • A. 

      Harriet will receive $25 of consumer surplus since she will buy no shirts

    • B. 

      Tom and dick receive a total of $70 of consumer surplus from buying one shirt each. Harriet will buy no shirts

    • C. 

      Tom will buy two shirts, dick will buy one shirt and harriet will buy no shirts

    • D. 

      Tom will receive $12 of consumer surplus from buying one shirt

  • 7. 
    The table above lists the highest prices of the three consumers, tom, dick, and harriet, are willing to pay for a short sleeved polo shirt.  if the price of the shirts falls from $28 to $20
    • A. 

      Consumer surplus increases from $14 to $35

    • B. 

      Consumer surplus will increase from $70 to $95

    • C. 

      Tom will buy two shirts; dick and harriet will each buy one shirt

    • D. 

      Harriet will receive more consumer surplus than tom or dick

  • 8. 
    If the market price is $1.00, what is the consumer surplus on the third burrito?
    • A. 

      $ 0.50

    • B. 

      $ 1.00

    • C. 

      $1.50

    • D. 

      $7.50

  • 9. 
    What area represents producer surplus at a price of P2?
    • A. 

      A+B+C+D+E

    • B. 

      A+B

    • C. 

      A+B+C

    • D. 

      B+D

  • 10. 
    What area represents the increase in producer surplus when the market prices rises from P1 to P2?
    • A. 

      C+E

    • B. 

      B+D

    • C. 

      A+B

    • D. 

      A+C+E

  • 11. 
    What is the value of producer surplus at a price of $18?
    • A. 

      $300

    • B. 

      $720

    • C. 

      $340

    • D. 

      $240

  • 12. 
    What is the value of the deadweight loss at a price of $18?
    • A. 

      $100

    • B. 

      $180

    • C. 

      $1040

    • D. 

      $660

  • 13. 
    The figure above represents the market for pecans.  Assume that this is a competitive market.  If the price of pecans is $3, what changes in the market would result in an economically efficient output?
    • A. 

      The quantity supplied would increase, the quantity demanded would decrease and the equilibrium price would increase

    • B. 

      The price would increase, the quantity demanded would decrease and the quanity supplied would increase

    • C. 

      The price would increase, the quantity supplied would decrease, and the quantity demanded would increase

    • D. 

      The price would increase, the demand would decrease and the supply would increase

  • 14. 
    What is the value of consumer surplus after the impostion of the ceiling?
    • A. 

      $120,000

    • B. 

      $230,000

    • C. 

      $270,000

    • D. 

      $430,000

  • 15. 
    What is the value of producer surplus after the imposition of the ceiling?
    • A. 

      $40,000

    • B. 

      $100,000

    • C. 

      $300,000

    • D. 

      $430,000

  • 16. 
    What is keegan's optimal consumption bundle?
    • A. 

      3 pita wraps and 3 bubble teas

    • B. 

      5 pita wraps and 0 bubble teas

    • C. 

      4 pita wraps and 2 bubble teas

    • D. 

      3 pita wraps 4 bubble teas

  • 17. 
    If keegan can drink all the bubble tea he wants for free, how many glasses will he consume?
    • A. 

      4 glasses

    • B. 

      5 glasses

    • C. 

      6 glasses

    • D. 

      7 glasses

  • 18. 
    If keira maximizes her utility, how many units of each good should she buy?
    • A. 

      1 cup of soup and 5 sandwiches

    • B. 

      4 cups of soup and 3.5 sandwiches

    • C. 

      6 cups of soup and 2 sandwiches

    • D. 

      3 cups of soup and 4 sandwiches

  • 19. 
    Suppose keira's income increases from $18 to $23 but prices have not changed.  What is her utility maximizing bundle now?
    • A. 

      5 cups of soup and 4 sandwiches

    • B. 

      6 cups of soup and 5 sandwiches

    • C. 

      4 cups of soup and 5 sandwiches

    • D. 

      5 cups of soup and 5 sandwiches

  • 20. 
    When the price of hoagies increases from $5.00 to $5.75, quanity demanded decreases from Q1 to Q0.  This change in quantity demanded is due to
    • A. 

      The income and substitution effects

    • B. 

      The price and output effects

    • C. 

      The fact that marginal willingness to pay falls

    • D. 

      The law of diminishing marginal utility

  • 21. 
    Which of the following statements is true?
    • A. 

      Quanity Q0 could be a utility-maximizing choice if the price is $5.75, but quanity Q1 may not be because we have no information on the marginal utility per dollar when price changes.

    • B. 

      Quanities of Q0 and Q1 may not necessarily be the utility-maximizing quantities of hoagies at two different prices because we have no information on the consumers budget or the price of other goods

    • C. 

      Quantities Q0 to Q1 are derived independently of the utility-maximizing model

    • D. 

      Quantities Q0 and Q1 are the utility-maximizing quantities of hoagies at two different prices of hoagies

  • 22. 
    Which of the following is an example of positive technological change?
    • A. 

      A firm conducts a new advertising campaign. As a result, the demand for the firms surf boards increases

    • B. 

      A firm buys a an additional machine that it uses to make surf boards. As a result, the firm is able to increase its weekly production of surf boards

    • C. 

      A firm offers workers a higher wage to work on weekends and night. As a result, the firm is able to increase its weekly production of surf boards.

    • D. 

      A firms workers participate in a training program designed to increase the number of surf boards they can produce per day.

  • 23. 
    Economic costs of production differ from accounting costs in that
    • A. 

      Accounting costs include expenditures for hired resources wile economic costs do not

    • B. 

      Economic costs add the opportunity costs of a firm using its own resources while accounting costs do not

    • C. 

      Accounting cost are always larger than economic cost

    • D. 

      Economic costs include expenditures for hired resources while accounting costs do not

  • 24. 
    If four workers can produce 18 chairs a day and five can produce 20 chairs a day, the marginal product of the fifth worker is
    • A. 

      2 chairs

    • B. 

      3 chairs

    • C. 

      4 chairs

    • D. 

      38 chairs

  • 25. 
    The law of diminishing marginal returns
    • A. 

      Causes average total costs to rise at a decreasing rate as output increases

    • B. 

      Explains why the average total cost and marginal cost curves are u-shaped in the short run

    • C. 

      Explains why the average total cost, average fixed cost and the marginal cost curves are u-shaped in the short run

    • D. 

      Causes the difference between average total cost and average variable cost to get smaller as output increases

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