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Home / Questions / Suppose your best friend’s birthday is next week and you are willing to pay $300 for a

Suppose your best friend’s birthday is next week and you are willing to pay $300 for a

 Suppose your best friend’s birthday is next week and you are willing to pay $300 for a
                            gift of Rollerblades, but you found them on sale for $200 at Sportsmart. Lucky? Yes.
                            Your consumer surplus is

a.$300

b.$600

c.$100

d.$200

e.$500

142.              Elvis loves steak. Suppose he values the first steak sandwich he eats at $5, the second at
                            $4.50, and the third at $4. If he buys the 3-for-$4 special, his consumer surplus is

a.$5

b.$4

c.$1.50

d.$9.50

e.$12

143.              How do you calculate the total consumer surplus in any market? It is the area

a.price times quantity

b.above the supply curve and below the price

c.beneath the demand curve

d.beneath the demand curve and above the price

e.below the supply curve and above the demand curve

144.              Everyone refers to Jerry as “Big Guy.” He is 6’4” tall and weighs 275 pounds (he says).
                            It’s probably closer to 300 pounds. Jerry loves hamburgers. He ate 4 of them at
                            McDonald’s one evening. He figured the last one was just worth the $1 price he paid. If
                            his demand curve for hamburgers is downward sloping, then he

a.gained no consumer surplus because his demand curve is downward sloping

b.would have gained consumer surplus if he had eaten one more hamburger

c.gained consumer surplus on each of the four he consumed

d.gained consumer surplus only on the first three hamburgers

e.gained $1 consumer surplus on the fourth hamburger alone

145.              Ed thinks he looks good in tweed. Last week he saw a light-brown tweed sports coat at
                            Dessen’s Fine Clothing Store and thought that the $200 price tag was about as much as
                            he was willing to pay. Lucky for him, he noticed an ad in the local paper that night that
                            had attached a $20-off coupon for any purchase at Dessen’s over $100. Using the coupon,
                            he bought the coat. He ended up with the coat and a

a.producer surplus of $80

b.producer surplus of $20

c.consumer surplus of $120

d.consumer surplus of $80

e.consumer surplus of $20

146.              Joel buys ten disks for his new personal computer, and he places a $60 value on those
                            disks, even though he only paid $2 per disk. What is his consumer surplus?

a.$48

b.$30

c.$40

d.$20

e.$4 from each floppy disk

147.              Which of the following do you know for certain is true?

a.The marginal utility of Diane’s second Coke is greater than the marginal utility of
her third pretzel.

b.The marginal utility of Diane’s second Coke is greater than the marginal utility of
Ken’s third pretzel.

c.The marginal utility of Diane’s second Coke is greater than the marginal utility of
her third Coke.

d.The total utility of two Cokes is greater than the total utility of three Cokes.

e.The marginal utility of Diane’s second Coke is greater than the marginal utility of
Ken’s third Coke.

148.              Catherine’s demand for fish takes the conventional form of a downward-sloping demand
                            curve. When the price of fish falls, her consumer surplus

a.increases

b.decreases

c.remains unchanged because the demand curve didn’t change

d.remains unchanged because the quantity demanded remains unchanged

e.decreases only if price elasticity of demand is greater than one

149.              The utility of a good is

a.different for different consumers

b.the same for all consumers

c.constant no matter how much is consumed

d.related to the cost of producing it

e.positive for all goods and all consumers

150.              George Carlson wears cuff links with his dress shirts and he loves the new pair his wife
                            bought him. He adds it to his collection, which he now values at $650. Before the new
                            purchase, he valued the collection at $575. What can we say about the marginal utility of
                            the new cuff links to him?

a.The marginal utility of the new pair is $650 and it’s higher than the marginal utility
of any pair he already had.

b.The marginal utility of the new pair is $650 and it’s lower than the marginal utility of
any pair he already had.

c.The marginal utility of the new pair is $75.

d.The marginal utility of the new pair is $575 and it’s higher than the marginal utility
of any pair he already had.

e.The marginal utility of the new pair is $75 and it’s higher than the marginal utility of
any pair he already had.

Dec 09 2019 View more View Less

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