Micro Ch_6 Vocab Quiz Principles of Microeconomics

What is the backward-bending supply curve for labor?

• A curve showing that as wages increase, the quantity of labor supplied initially increases and then decreases.

• A curve showing that as wages increase, the quantity of labor supplied continuously increases.

• A curve showing that as wages increase, the quantity of labor supplied continuously decreases.

• A curve showing no relationship between wages and the quantity of labor supplied.

Behavioral economics is a field that combines insights from which two disciplines?

• Economics and Psychology

• Economics and Sociology

• Economics and Anthropology

• Economics and Political Science

A budget constraint (or budget line) is:

• A graphical representation of all possible combinations of two goods that can be purchased with a given income.

• A list of expenses that exceed income.

• A financial plan for saving and investing.

• A method for calculating taxes.

Consumer equilibrium is defined as the point where a consumer achieves maximum satisfaction given their budget constraints.

• The point where a consumer achieves maximum satisfaction given their budget constraints.

• The point where a consumer spends all their income on goods and services.

• The point where a consumer saves the most money.

• The point where a consumer buys the most expensive goods.

Diminishing marginal utility refers to the principle that as a person consumes more of a good, the additional satisfaction gained from consuming each additional unit decreases.

• The satisfaction from consuming more of a good increases.

• The satisfaction from consuming more of a good remains constant.

• The satisfaction from consuming more of a good decreases.

• The satisfaction from consuming more of a good is unpredictable.

Which of the following best explains the concept of fungible goods?

• Goods that are unique and cannot be replaced by another identical item.

• Goods that can be exchanged for another identical item of the same value.

• Goods that have a fixed price and cannot fluctuate in value.

• Goods that are perishable and have a limited shelf life.

The income effect refers to the change in consumption resulting from a change in:

• Consumer's income

• Price of goods

• Consumer's preferences

• Availability of substitutes

Marginal utility is defined as the additional satisfaction or benefit received from consuming one more unit of a good or service.

• The total satisfaction received from consuming a good or service

• The additional satisfaction received from consuming one more unit of a good or service

• The decrease in satisfaction from consuming one more unit of a good or service

• The cost of producing one more unit of a good or service

What is marginal utility per dollar?

• The additional satisfaction gained from consuming one more unit of a good.

• The total satisfaction gained from consuming a good.

• The additional satisfaction gained per dollar spent on a good.

• The total cost of consuming a good.

Explain the substitution effect.

• The change in consumption patterns due to a change in relative prices.

• The increase in demand for a good as its price decreases.

• The decrease in demand for a good as its price increases.

• The effect of a change in income on consumption patterns.