1. Which of the following explains why automobile engines are smaller in England than in the united states? ●a, Income is higher in the United States o b. Income is higher in England. c. The price of gasoline is higher in the United states d. The price of gasoline is higher in England. The gasoline tax in England is relatively low
⚫ 1. Which of the following explains why automobile engines are smaller in England than in the United States? ⚫ a. Income is higher in the United States. ⚫ b. Income is higher in England. ⚫ c. The price of gasoline is higher in the ⚫ United States. ⚫ d. The price of gasoline is higher in England. ⚫ e. The gasoline tax in England is relatively ⚫ low
2. Which of the following describes the law of diminishing marginal utility? The more you consume, the happier you are o b. As you consume more, your level of happiness falls. o C. As prices fall, you enjoy consuming more o d. You enjoy the first units you consume more than later units An increase in income increases your happiness
⚫ 2. Which of the following describes the law of diminishing marginal utility? ⚫ a. The more you consume, the happier you ⚫ are. ⚫ b. As you consume more, your level of ⚫ happiness falls. ⚫ c. As prices fall, you enjoy consuming more. ⚫ d. You enjoy the first units you consume ⚫ more than later units. ⚫ e. An increase in income increases your ⚫ happiness. ⚫
3. Which of the following happens as a result of an increase in income? a. Demand is stimulated ●b. Prices fall O c. Total utility decreases o d. Marginal utility increases. ●e all of the above
⚫ 3. Which of the following happens as a result of an increase in income? ⚫ a. Demand is stimulated. ⚫ b. Prices fall. ⚫ c. Total utility decreases. ⚫ d. Marginal utility increases. ⚫ e. all of the above ⚫
4. If the price of new cars falls, what will happen to the demand for used cars? ●a. remain the same ●b. Increase c. decrease ●d. shift to the right o e become more inelastic
⚫ 4. If the price of new cars falls, what will happen to the demand for used cars? ⚫ a. remain the same ⚫ b. increase ⚫ c. decrease ⚫ d. shift to the right ⚫ e. become more inelastic ⚫
o 5. The fact that a price change makes consumers either poorer or richer in real terms describes which of the following? ●a. The income effect ob. The substitution effect o C. Diminishing marginal utility ●d. Consumer surplus o e. The law of demand
⚫ 5. The fact that a price change makes consumers either poorer or richer in real terms describes which of the following? ⚫ a. The income effect ⚫ b. The substitution effect ⚫ c. Diminishing marginal utility ⚫ d. Consumer surplus ⚫ e. The law of demand
6. When the price of a good goes up, other goods become relatively more attractive describes which of the following? ●a. The income efifect o b. The substitution effect o c. Diminishing marginal utility ●d. Consumer surplus o e. The law of demand
⚫ 6. When the price of a good goes up, other goods become relatively more attractive describes which of the following? ⚫ a. The income effect ⚫ b. The substitution effect ⚫ c. Diminishing marginal utility ⚫ d. Consumer surplus ⚫ e. The law of demand
7. The difference between your reservation price and the actual price paid for a good is your ●a. marginal utility ●b. consumer surplus c. income effect ●d. demand price ●e. excess demand
⚫ 7. The difference between your reservation price and the actual price paid for a good is your ⚫ a. marginal utility. ⚫ b. consumer surplus. ⚫ c. income effect. ⚫ d. demand price. ⚫ e. excess demand
o8. The consumer surplus for a good purchased at the equilibrium price equals ●a.Zer0 ●b. infinity. o C. the price paid for the good. o d. the demand for the good. ●e。 total revenue
⚫ 8. The consumer surplus for a good purchased at the equilibrium price equals ⚫ a. zero. ⚫ b. infinity. ⚫ c. the price paid for the good. ⚫ d. the demand for the good. ⚫ e. total revenue
9. Why do the wealthy in Manhattan live in smaller houses than the wealthy in Seattle? o a. There are no small houses in Seattle ●b. The income effect o C. The price elasticity of demand for houses is different o d. the substitution effect o e. New Yorkers have a higher consumer surplus
⚫ 9. Why do the wealthy in Manhattan live in smaller houses than the wealthy in Seattle? ⚫ a. There are no small houses in Seattle. ⚫ b. The income effect. ⚫ c. The price elasticity of demand for houses is ⚫ different. ⚫ d. The substitution effect. ⚫ e. New Yorkers have a higher consumer ⚫ surplus