Question :
71) The substitution effect of a price change leads consumers : 1384188
71) The substitution effect of a price change leads consumers to ________ their demand for goods whose prices have risen. The income effect leads consumers to buy less of all ________ goods whose prices have risen.
A) reduce; normal
B) increase; inferior
C) increase; normal
D) reduce; Giffen
E) reduce; complement
72) Consumer surplus is
A) the sum of the marginal values to the consumer.
B) the total value that a consumer receives from the purchase of a particular good.
C) a measure of the gains that a consumer forgoes by buying this product rather than another.
D) the difference between what the consumer is willing to pay for all the units consumed and what he or she actually paid.
E) the consumption of a commodity above and beyond the amount required by the consumer.
73) Consumer surplus is
A) the same as Karl Marx’s notion of surplus value.
B) the same as total utility.
C) the sum of the extra value placed on each unit of a commodity above the market price paid for each.
D) the total value that consumers place on their purchases.
E) the marginal value that consumers place on their purchases.
74) Consider the pizza market, with a downward-sloping demand curve and an upward-sloping supply curve. Suppose 100 pizzas are purchased at the free-market equilibrium price. The consumer surplus on the 100th pizza is
A) positive.
B) negative.
C) non-negative.
D) unknown.
E) zero.
75) Given a typical downward-sloping demand curve in a market that has reached its equilibrium, the consumer surplus
A) is measured by the area above the market price and under the demand curve.
B) is measured by the area below the market price and under the demand curve.
C) is measured by the area immediately above the demand curve.
D) is calculated as the product of market price and quantity consumed.
E) cannot be measured given the information.
76) Given a particular market demand curve, consumer surplus is
A) less the lower the price and the smaller the output.
B) less the lower the price and the larger the output.
C) greater the higher the price and the smaller the output.
D) greater the lower the price and the smaller the output.
E) greater the lower the price and the larger the output.
77) Assume a person reveals the following demand conditions. At a price of $10, quantity demanded is zero; and at a price of $1, quantity demanded is 10 units.
A) The consumer surplus will be zero at a price of $10.
B) The consumer surplus will be the area under the entire demand curve.
C) The consumer surplus is zero at a price of $1.
D) Demand decreases as the price decreases.
E) The lower the price the smaller the consumer surplus.
78) An individual’s consumer surplus from some product can be eliminated entirely by:
1. raising the price until very few units are bought.
2. charging a price for each unit that is equal to the individual’s marginal value for each unit.
3. raising the price until zero units are purchased.
A) 1 only
B) 2 only
C) 3 only
D) 2 or 3
E) 1 or 2, but not 3.
79) Assume an individual with a downward-sloping demand curve is paying a single price for each unit of some commodity. He will experience consumer surplus on
A) all units that were not bought at that particular price.
B) all of the units bought.
C) all units bought with the possible exception of the last unit.
D) the first unit only.
E) none of the units.
80) At a garage sale, Ken purchases a used bicycle for $8 when he was willing to pay $25. If the bicycle costs $75 new, Ken’s consumer surplus is
A) $0.
B) $17.
C) $33.
D) $50.
E) $67.
