Economics Test 2

 What states that when the price of a certain good rises, people tend to find alternatives that are less expensive?

• income effect

• elasticity effect

• value effect

  
  

• substitution effect

 What type of good is expected to last at least three years?

• Nondurable goods

• Durable goods
• Fragile goods
• Perishable goods

What refers to the amount of satisfaction that results from a one-unit increase of a good?

• total utility
• marginal cost
• average utility
• marginal utility

 What refers to the direct benefit received by the owner of a good?

• value in use

• marginal utility

  
  

• total utility

• value in exchange

If Miss Johnson quit a job where she annually made $40,000 to start a business whose expense was $20,000 and total revenue was $15,000 during the first year, what would her opportunity cost for the year equal?

• $15,000
• $20,000
• $5,000
• $45,000

What type of good is capable of being used in conjunction with another?

• Substitute good
• Inferior good
• Complementary good
• Normal good

What refers to the total amount of satisfaction received from possessing a particular amount of a good?

• value in use

• marginal utility

• total utility

• value in exchange

Assuming that point E is equilibrium and that supply remains constant, a shift from curve 3 to curve 2 would most likely set the new equilibrium at point _.

• F

• G

• H

• I

The quantity demanded is _______ at point H than it is at point G.

The price paid for a good is______ at point I than it is at point H.