Econ. Quiz - Utility & Elasticity

​ (a)   is how much product a business is able to sell, and ​ (b)   is how many consumers want/need to buy it.

• Supply
• Demand
• Goods
• Services

What does the term "utility" refer to in economics?

• The cost of producing a good or service

• The satisfaction or pleasure a consumer gets from consuming a good or service

• The price of a good or service in the market

• The amount of money a consumer spends each month on goods and services

Which of the following best describes the Law of Diminishing Marginal Utility?

• Total utility increases at an increasing rate as more units are consumed

• Marginal utility increases as more units are consumed

• Marginal utility decreases as more units are consumed

• Total utility decreases as more units are consumed

If the price of a good increases and the quantity demanded decreases, what type of elasticity is being demonstrated?

• Price elasticity of supply

• Price elasticity of demand

• Income elasticity of demand

• Cross elasticity of demand

Which of the following statements is true about marginal utility?

• Marginal utility is always negative

• Marginal utility is always constant

• Marginal utility can decrease as more units are consumed

• Marginal utility increases as more units are consumed

Which of the following best describes "inelastic demand"?

• Quantity demanded changes greatly with a small change in price

• Quantity demanded does not change much with a change in price

• Quantity demanded and price change by the same percentage

• Quantity demanded falls to zero when price increases

In a given time period, a person consumes more and more of a good and enjoys each additional unit less and is willing to pay less for it, because of:

• diminishing returns
• diminishing marginal product
• diminishing marginal utility
• increasing costs

The price elasticity of demand measures how much

• quantity demanded responds to a change in price.
• quantity demanded responds to a change in income.
• price responds to a change in demand.
• demand responds to a change in supply.

Describe your demand for a product if you buy the same amount of it or just a small amount less after a large price increase.

• elastic

• unitary elastic

• inelastic

• hyperelastic