Which economic concept is defined as the measure of how responsive consumers are to price change?
a. consumer expectation
b. consumer taste
c. decreasing marginal utility
d. elasticity of demand
Ans: d. elasticity of demand
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In Figure 3-7 above, the multiplier effect does NOT explain
A) the increase in equilibrium income. B) the increase in induced saving. C) the increase in AP. D) all of the above.
Which of the following might cause a market to produce a quantity that is less than optimal?
a. A price ceiling above the market equilibrium price. b. Market control by a monopolist. c. A subsidy to low-income consumers. d. None of the above.
Using supply and demand analysis, customers will stand in line for gasoline when a price ceiling is in force, even if the price ceiling is at a level higher than the equilibrium price
a. True b. False Indicate whether the statement is true or false
An "all you can eat" restaurant illustrates the economic principle:
a. of consumers' inability to maximize their total utility. b. that economic theory clearly breaks down under certain circumstances. c. that marginal utility is always positive. d. that consumers will stop eating when marginal utility is zero. e. that consumers will stop eating when total utility is zero.