Chapter 6 - Consumer Theory

Chapter 6 - Consumer Theory

University

15 Qs

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Chapter 6 - Consumer Theory

Chapter 6 - Consumer Theory

Assessment

Quiz

Social Studies

University

Practice Problem

Hard

Created by

Richard Gosselin

Used 2+ times

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15 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Behavioral economics integrates psychology into economic decision-making. What is its core principle concerning how individuals perceive money?

Money has constant and stable value regardless of the situation.
People's spending is only influenced by their income levels.
The perceived value of money can vary depending on the context.
Individuals always prefer more money to less.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does a budget constraint illustrate in consumer theory?

The level of utility that maximizes consumer satisfaction.
The inflation rate that affects consumer purchasing power.
The maximum number of goods a firm can produce.
The various combinations of two goods a consumer can afford with a limited income.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

At which point does consumer equilibrium occur on a budget line?

When the marginal utility of the goods equals their prices.
When the income effect no longer applies.
When the ratio of the prices of the goods is equal to the ratio of their marginal utilities.
When the total utility is at its minimum level.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is diminishing marginal utility?

The increase in total utility a consumer gets from consuming one more unit of a good.
The decrease in satisfaction from consuming additional units of a good after reaching a saturation point.
The reduction in additional satisfaction as one consumes more units of a good.
The point where additional units of a good no longer provide any utility.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does it mean for a good to be "fungible"?

It is easily replaceable by another identical item and holds the same value.
It can only be produced by a monopolistic company.
It provides diminishing marginal utility.
It has no utility to the consumer.

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the income effect in the context of a price increase for a good?

It is the increased income required to purchase the same amount of the good.
It is the reduction in the quantity of the good demanded because of the higher price.
It refers to the reduced effective buying power when the price of a good increases.
It is the additional income earned by working overtime to afford the more expensive good.

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does marginal utility indicate?

The total satisfaction received from a given level of consumption.
The additional utility gained by increasing consumption by one more unit.
The utility lost when one less unit of a product is consumed.
The cost of producing one additional unit of a good.

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