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WorksheetsSurplus, Deadweight Loss, and Consumer Behavior Theory
Total questions: 25
Worksheet time: 15mins
Name
Class
Date
1.
The degree to which tax falls on a particular person or group
a)
Surplus
b)
Tax incidence
c)
Deadweight loss
d)
Elasticity
2.
The difference from the equilibrium price before tax and the equilibrium price after tax will help you determine the...
a)
Tax burden on the consumer
b)
Tax burden on the producer
c)
Both, if you know what you're doing!
d)
None of these are correct
3.
True or false: if a demand is inelastic, it is more likely to be taxed higher by the government
a)
True
b)
False
4.
True or false: the more elastic the supply, the larger the portion of the tax is on producers
a)
True
b)
False
5.
Efficiency loss is another term for...
a)
Deadweight loss
b)
Consumer surplus
c)
Producer surplus
d)
Elasticity
6.
The maximum price a consumer is willing to pay for a product and the actual price that they do pay
a)
Consumer surplus
b)
Producer surplus
c)
Deadweight loss
d)
Allocative Efficiency
7.
Reductions of combined consumer and producer surplus
a)
Deadweight loss
b)
Elasticity
c)
Tax incidence
d)
Surplus
8.
Want-satisfying power
a)
Utility
b)
Deadweight loss
c)
Efficiency
d)
Surplus
9.
According to the ____________________ when the consumer has "balanced his margins" he has achieved ______________.
a)
utility-maximizing rule; consumer equilibrium
b)
utility-maximizing rule; utility equilibirum
c)
allocative efficiency rule; consumer equilibrium
d)
deadweight loss rule; tax burden point
10.
You can always expect consumers to act in a _____________
a)
rational behavior
b)
play
c)
way to spend money without utility maximization
d)
way that helps the community
11.
The impact that a change in the price of a product has on a consumer's real income and the quantity demanded on that good
a)
income effect
b)
substitution effect
c)
rational behavior
d)
deadweight loss
12.
The impact that a change in a product's price has on its relative expensiveness and on the quantity demanded
a)
income effect
b)
substitution effect
c)
deadweight loss
d)
consumer surplus
13.
A consumer's demand curve for a product is downsloping because...
a)
total utility falls below marginal utility as more of a product is consumed
b)
marginal utility diminishes as more of a product is consumed
c)
the income and substitution effects precisely offset eachother
d)
time becomes less valuable as more of a product is consumed
14.
Efficiency losses ____________________
a)
are not possible is suppliers are willing to produce and sell a product
b)
can only result from underproduction
c)
can only result from overproduction
d)
none of the above
15.
If there is a tax of $60 and the consumer burden is $10 what is the burden on the producers?
a)
$50
b)
$60
c)
$10
d)
There is not enough information
16.
Jennifer buys a piece of costume jewelry for $33 for which she was willing to pay $42. The minimum acceptable price to the seller, Nathan, was $30. Jennifer experiences...
a)
A consumer surplus of $12 and Nathan experiences a producer surplus of $3
b)
A producer surplus of $9 and Nathan experiences a consumer surplus of $3
c)
A consumer surplus of $9 and Nathan experiences a producer surplus of $3
d)
A producer surplus of $9 and Nathan experiences a consumer surplus of $12
17.
Graphically, if the supply and demand curves are linear, consumer surplus is measured as the triangle...
a)
under the demand curve and below the actual price
b)
under the demand curve and above the actual price
c)
above the supply curve and above the actual price
d)
above the supply curve and below the actual price
18.
Allocative efficiency occurs only at that output where...
a)
marginal benefit exceeds marginal cost by the greatest amount
b)
consumer surplus exceeds producer surplus by the greatest amount
c)
the combined amounts of consumer surplus and producer surplus are maximized
d)
the areas of consumer and producer surplus are equal
19.
A deadweight loss declines in size when a unit of output is produced for which...
a)
marginal cost exceeds marginal benefit
b)
maximum willingness to pay exceeds minimum acceptable price
c)
consumer surplus exceeds producer surplus
d)
producer surplus exceeds consumer surplus
20.
The first Pepsi yields Craig 18 units of utility and the second yields him an additional 12 units of utility. His total utility from three Pepsis is 38 units of utility. The marginal utility of the third Pepsi is
a)
26 untils
b)
6 utils
c)
8 utils
d)
38 utils
21.
If the price of X rises, then the resulting decline in the amount purchased will...
a)
necessarily increase the consumer's total utility from his total purchases
b)
increase the marginal utility of the last unit consumed of this good
c)
increase the total utility from purchases of this good
d)
reduce the marginal utility of the last unit consumed of this good
22.
When determining the consumer's purchasing choice based off of marginal utility you should first...
a)
Determine your own utility for that same product
b)
Calculate the marginal utility per dollar
c)
Determine the utils of each product
d)
Find the square root of happiness
23.
While eating at Alex's "Pizza by the Slice" restaurant, Kara experiences diminishing marginal utility. She gained 10 units of satisfaction from her first slice of pizza consumed and would only receive 5 units of satisfaction from consuming a second slice, at the same price. Based on this information we can conclude that:
a)
Alex may have to lower the price of convince Kara to buy a second slice
b)
Kara will not eat a second slice, even if it is given to her at no charge
c)
Kara will definitely want to buy a second slice of pizza
d)
even if Kara buys a second slice, she will not buy a third slice
24.
Mrs. Arnold is spending all her money income by buying bottles of soda and bags of pretzels in such amounts that the marginal utility of the last bottle is 60 utils and the marginal utility of the last bag is 30 utils. The prices of soda and pretzels are $.60 per bottle and $.40 per bag respectively. It can be concluded that:
a)
the two commodities are substitute goods
b)
Mrs. Arnold should spend more on pretzels and less on soda
c)
Mrs. Arnold should spend more on soda and less on pretzels
d)
Mrs. Arnold is buying soda and pretzels in the utility-maximizing amounts
25.
Katie Filipedidecides to buy a $75 ticket to a particular New York professional hockey game rather than a $50 ticket for a particular Broadway play. We can conclude that Katie:
a)
Forgot how much she loves theatre
b)
Recently attended several other Broadway plays
c)
has a higher "marginal utility-to-price ratio" for the hockey game than the play
d)
obtains more marginal utility from the play than from the hockey game
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