Day 2 Quiz

What are two assumptions that are made about consumers?

• People are irrational and love money

• People love money and presents

• People are rational and use money to maximize their total satisfaction

• People are irrational and use money to maximize their total satisfaction

• None of the Above

What is consumer surplus?

• The difference between the benefit received or willingness to pay and the price

• The difference between marginal utility and total utility

• The addition of marginal utility and price

• Anytime a consumer buys more than originally planned

• None of the Above

What are the four things spending habits are influenced by?

• Disposable income, wealth, money, and fame

• Religion, life, celebrities, and commercials

• Disposable income, wealth, expectations, and interest rates

• Expectations, money, interest rate, and luck

• None of the Above

What would happen to the PPC for a country that produced oil if a new drilling technique was able to withdraw more oil from the same locations previously used?

• The PPC would remain the same since it changes nothing

• The PPC would increase

• The PPC decrease

• The PPC does shifts both in and out

• None of the Above

Johnny the Skeleton loves to eat popsicles and the data above represents his decisions to eat popsicles, use it to answer questions 6-9. Each Popsicle box costs $10. The store which Johnny the Skeleton shops at is 8 miles from his house.

What is the marginal utility of 2 Popsicle boxes (A)?

• 72

• 31

• 9

• 15

• None of the Above

What is the total utility from 4 Popsicle boxes (C)?

• 54

• 50

• 60

• 12

• None of the Above

What is the consumer surplus from 4 Popsicle boxes (D)?

• $2

• $1

• $10

• -$2

• None of the Above

How many Popsicle boxes maximize Johnny the Skeleton’s utility?

• 0

• 5

• 6

• 8

• None of the Above

The diagram above shows the production possibilities curve for Country Y. Which of the following statements is true?

• The opportunity cost of producing more machines is constant

• If Country Y is producing at point C, it is using all its resources efficiently

• 1. Country Y cannot produce at point E

• Producing at point C is the most preferable, because butter is a nondurable good

• None of the Above

What is happening at point D on the graph?

• Through hard work and determination the country has increased production

• The country has increased the minimum wage allowing workers to possess more goods.

• Specialized production techniques which encourage workers improves salaries

• Everyone in the country has migrated to a cooler climate away from the dry heat

• None of the Above