2-1b: LearnSmart 2- Chapter 4

On average, if a person spends $50,000 per year, ______ is spent on housing.

$3,300
$0.33
$33,000
$16,500
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The utility of a specific product or service may vary widely from person to person. Therefore, it is: easy to quantify objective a fixed value subjectivesubjectiveThe law of diminishing _____ utility states that added satisfaction declines as additional units of a given product are consumed.marginal_____ is the satisfaction or pleasure one gets from consuming a good or service.UtilityConsumer choice is influenced not only by the ______ utility that extra units of a good will yield, but also by how much ______ must be given up to obtain extra units of the good. marginal; income total; income marginal; utility total; utility increasing; incomemarginal; incomeOn average, if a person spends $100,000 per year, ______ is spent on housing. $16,500 $0.33 $3,300 $33,000$33,000Marginal utility: always rises as successive units of a good are consumed explains why product supply curves slope upwards is the extra satisfaction from the consumption of one more unit of some good or service is the extra output a firm obtains when it adds another unit of laboris the extra satisfaction from the consumption of one more unit of some good or serviceWhich one of the following best clarifies the ceteris paribus assumption? Those variables under immediate consideration for a particular analysis are all held constant. All variables except those under immediate consideration are held constant for a particular analysis. Those variables under immediate consideration for a particular analysis are given equal weight. All variables in a particular analysis are given equal weight or consideration when used in a particular analysis. All variables are held constant or do not change for a particular analysis.All variables except those under immediate consideration are held constant for a particular analysis.The law that says, when the additional consumption of a good yields smaller and smaller amounts of extra utility, is: the law of supply the law of diminishing marginal utility the law of diminishing total utility the law of rational behaviorthe law of diminishing marginal utilityThe assumption that nothing else changes is known as the market mechanism scarcity opportunity cost ceteris paribusceteris paribusEconomists say that as we consume successive units of a good, we get smaller and smaller amounts of marginal or extra utility. This claim is known as the law of rational behavior. the law of diminishing total utility. the law of supply. the law of diminishing marginal utility.the law of diminishing marginal utility.The relationship between price and quantity demanded is exemplified by ______. the supply curve changes in the wants of the consumer the demand curve the monetary income of the consumerthe demand curveA consumer's choices are directly influenced by all of the following except: marginal utility consumers' preferences costs of production income (or budget) prices of goodscosts of productionThe price ____ of demand measures the responsiveness of consumers' quantity demanded to a price change.elasticityWhich of these goods have relatively elastic demand? Coffee Gasoline Fresh fish Prescription drugsFresh fishConsider the relationship between the price of gas and the quantity of gas consumed by drivers. If we are to consider the price of gas as the only factor affecting the quantity of gas consumed, while holding other factors such as drivers' incomes and tastes and preferences irrelevant, then we are applying the law of supply. the theory of marginal analysis. the other-things-equal assumption.the other-things-equal assumption.When the price elasticity of demand for a product is elastic, a modest change in price causes ______ change in the quantity demanded. an equal no change a lower a largera largerWhich of the following define ceteris paribus? The idea that factors other than those being considered in a particular analysis change That other things remain unchanged (equal) The idea that factors other than those being considered in a particular analysis do not changeThat other things remain unchanged (equal) The idea that factors other than those being considered in a particular analysis do not changeWhich of the following is true when the demand is unitary elastic? The percentage change in quantity demanded is equal to the percentage change in price. The percentage change in quantity demanded is less than the percentage change in price. The percentage change in quantity demanded is greater than the percentage change in price.The percentage change in quantity demanded is equal to the percentage change in price.The inverse relationship between price and quantity demanded is called the income effect substitution effect law of demand law of supplylaw of demand_____ revenue is calculated by multiplying the product price by the quantity sold.TotalThe response of consumers to a change in price is measured by the price _____ of demand.elasticityAlong a typical demand curve, as price falls total revenue continuously decreases initially increases then decreases remains constant initially decreases then increasesinitially increases then decreasesAirline travel and new cars are two products that exhibit relatively price _____ (elastic/inelastic) demand.elasticWhich of the following are characteristics of goods with relatively elastic demand? High-priced goods relative to income Low-priced goods relative to income Goods with few substitutes Luxuries NecessitiesHigh-priced goods relative to income LuxuriesA relatively large percentage change in quantity demanded divided by a relatively smaller change in price yields relatively price _____ (elastic/inelastic) demand.elasticWhich of the following would be considered a necessity and thus have a low price elasticity of demand? Designer shoes Vacation travel Electricity JewelryElectricityWhen demand is unitary elastic, the percentage change in quantity demanded is ______ the percentage change in price. less than greater than equal toequal toHow will the price elasticity of demand for a good that is considered to be a luxury compare to one that is a necessity? It will exhibit a price elasticity coefficient equal to one. It will exhibit a price elasticity coefficient greater than one. It will exhibit a price elasticity coefficient very close to zero. It will exhibit a price elasticity coefficient less than one.It will exhibit a price elasticity coefficient greater than one.How is total revenue calculated? Price ÷ Quantity Price - Quantity Price + Quantity Price × QuantityPrice × QuantityGoods that can be used instead of other goods are called _____ (complementary/substitute) goods.substituteAlong a typical demand curve, as price rises total revenue continuously increases initially decreases then increases initially increases then decreases remains constantinitially increases then decreasesGoods that "go together" are called _____ (complementary/substitute) goods.Blank 1: complementary or complementRestaurant meals, filet mignon, and Cadillacs are all examples of goods that have relatively price _____ (elastic/inelastic) demand.elasticWhich of the following would be considered a luxury and thus exhibit a high price elasticity of demand? Gasoline Dining out Newspapers SugarDining outWhen an economy falls into recession and people are losing jobs, demand for most products, especially big-ticket items, _____ (increases/decreases).Blank 1: decreases, declines, falls, drops, or lowersThe more a good or service is considered to be a "luxury" rather than a "necessity," the more ______ the price elasticity of demand. relative inelastic unitary elastic elasticelasticAdvertisers seek to shift the ______ curve by changing the ______ of consumers. demand, income supply, tastes demand, tastes supply, incomedemand, tastesXbox and PlayStation are what type of goods? Independent Complementary Inferior SubstitutesSubstitutesSmartphones and apps are what type of goods? Independent Substitute Complementary InferiorComplementaryGasoline and milk are two goods that exhibit relatively price _____ (elastic/inelastic) demand.inelasticWe illustrate an income change with a _____ of the demand curve rather than a movement along the demand curve.shiftAdvertising has what primary impact on a market for a specific product? Advertising changes the production decision. Advertising shifts the supply curve. Advertising changes consumer income. Advertising shifts the demand curve.Advertising shifts the demand curve.