2.Refer to Figure 1. Which of the indicated total utility charts exhibits diminishing marginal utility? Figure 1 C 3.Assad buys a jacket, and his total utility is 100 utils. He then buys a second jacket, and his total utility increases to 180 utils. What is his marginal utility for buying the second jacket? 80 4.Refer to the Marginal and Total Utility Table: Coffee Consumption. What is the total utility when two cups of coffee are consumed in one day (x)? Marginal and Total Utility Table: Coffee Consumption 30 5.Refer to the Marginal and Total Utility Table: Coffee Consumption. What is the marginal utility of consuming a third cup of coffee (y)? Marginal and Total Utility Table: Coffee Consumption 6 7.Rebecca loves to eat chocolate. However, every piece of chocolate that Rebecca eats provides her with less total utility. What can we conclude about Rebecca's utility? Her marginal utility is decreasing. 9.Anna, a health nut, spends all of her money on two goodsapples and quinoa. The price of a gram of quinoa is five times higher than for a gram of apples. Assume that the utility she receives per gram of each good is exactly the same. Which of the following instructions would maximize her total utility? Buy apples until the marginal utility of quinoa is 5 times the marginal utility of apples. 10.Which of the following statements is true in a situation where a consumer could increase their total utility by buying more bread than butter? The marginal utility per dollar spent on bread must be higher than that of butter 11.Refer to the Marginal and Total Utility Table: Potato Chips and Pop. What is the marginal utility spent per dollar when two bottles of pop are consumed (x)? Marginal and Total Utility Table: Potato Chips and Pop Potato Chips $1Pop $2 7 12.Refer to the Marginal and Total Utility Table: Potato Chips and Pop. At what point is the consumer in equilibrium? Marginal and Total Utility Table: Potato Chips and Pop Potato Chips $1Pop $2 when two bags of chips and one bottle of pop are consumed 13.Refer to the Marginal and Total Utility Table: Potato Chips and Pop. If a consumer has $5 to spend, how much of each product will be consumed? Marginal and Total Utility Table: Potato Chips and Pop three bags of chips and one bottle of pop 14.Russell is considering the purchase of a new vehicle. He has learned that a Pathfinder is $40 000 and that a Range Rover is $100 000. He thinks that if he purchases the Pathfinder, then his marginal utility will be 400, and if he purchases the Range Rover, his marginal utility will be 800. Which should he purchase? The Pathfinder since the marginal utility per dollar spent is higher 15.Russell is considering the purchase of a new vehicle. He has learned that a Pathfinder is $40 000 and that a Range Rover is $100 000. He thinks that if he purchases the Pathfinder, then his marginal utility will be 400. Under which of the following situations will he purchase the Range Rover? If his marginal utility for the Range Rover is 1100. 17.Suppose the price of a hot chocolate on a cold day is $2. How much consumer surplus will Alex receive if he is willing to pay $5 for a cup of hot chocolate? $3 18.Refer to the Consumer and Producer Surplus Graph. What area is equal to the loss in consumer surplus as a result of the tax? Consumer and Producer Surplus Graph. GHAB 19.Refer to the Consumer and Producer Surplus Graph. What area is equal to the loss in producer surplus as a result of the tax? Consumer and Producer Surplus Graph. GBCF 22.Suppose the government imposes a new law that prohibits the sale of a good that was previously legal. Which of the following statements is correct regarding the new law? It will decrease consumer surplus. 3.Refer to the Market Equilibrium Price and Quantity graph. How is an excess supply illustrated? Market Equilibrium Price and Quantity Q3 - Q1 4.Refer to the Market Equilibrium Price and Quantity graph. Which of the following is indicated when the market price is at P1? Long Description There is excess demand, and consumers will bid the price upward. 5.Shaving cream and razors are complementary goods. What would you expect to happen to the equilibrium price and quantity of shaving cream if the price of razors increases? Price would fall, and quantity would fall. 6.Refer to the Market Equilibrium Price and Quantity graph. Which of the following is true if the price is at P 3? Market Equilibrium Price and Quantity A total of Q1 units will be exchanged in the market 7.Refer to the Market Equilibrium Price and Quantity graph. Which of the following is true if the price is at P 1? Market Equilibrium Price and Quantity A total of Q1 units will be exchanged in the market 8.Suppose that generic drugs are an inferior good. What would you expect to happen to the equilibrium price and quantity of generic drugs if average incomes increase? Price would fall, and quantity would fall. 9.In 2008 and 2009, the housing market in most Canadian cities experienced a decrease in sales and a decrease in median prices. What are these decreases consistent with? a decrease in demand 10. Refer to the Price and Quantity Graph. What does this graph illustrate? Price and Quantity Graph a decrease in the price of a complementary good 11. A large factory opens up in a small town and employs a large percentage of the local population. What is the likely effect on the local restaurants? Prices would rise, and quantity would rise 12.The government decides to subsidize the production of hybrid cars. What is the resulting effect on the market for hybrid cars? Prices will fall, and quantity will rise. 13.Refer to the Supply Curve Shift Graph. What explains the shift in the figure? Supply Curve Shift Graph Factor prices decreased. 14. Suppose that a devastating winter freeze destroys the Florida orange groves. What would likely happen to the equilibrium price and quantity of orange juice? Price would rise, and quantity would fall 15.Which of the following events would lead to a decrease in the market price of notebook computers? the development of a new technology used to make computers 16.Suppose that airline travel is a normal good and that, as a result of a boom, people have more disposable income. At the same time, oil prices have increased. How will these two factors affect the equilibrium price and quantity or airline travel? The equilibrium price will be higher, and the equilibrium quantity will be uncertain. 17.The number of books available on e-readers has increased significantly. Assume that books and e-readers are complementary products on the demand side. At the same time the technology used in the production of e-readers has also improved. What effect will these two situations have on the market for e-readers? The equilibrium price will be uncertain, and the equilibrium quantity will be higher 18.Which of the following is a likely outcome of an effective rent control? a reduction in the quality of rental accommodations 19.To help the country's low-income earners, the government has decided to implement a price ceiling on food necessities, such as milk and bread. What effect will the price ceiling have on the economy? There will be shortages and poor people could continue to suffer 20.Refer to the Price Ceiling Graph. What will the price ceiling at P1 cause? Price Ceiling Graph Long Description a shortage equal to Q3 - Q1 21.Refer to the Price Ceiling Graph. What will the price floor at P1 cause? Price Ceiling Graph Long Description neither a shortage nor a surplus, because the floor is ineffective 22.The current hourly wage rate in the labour market is $15 and the government decides to increase the price floor from $14 to $16. What will be the effect on the labour market? There will be a surplus of labour 23.Refer to the Price Floor and Ceiling Graph. Suppose there is a price floor set at $7. What would be the total dollar value of goods exchanged in the market? Price Floor and Ceiling Graph $1,050 24.Refer to the Price Floor and Ceiling Graph. Suppose there is a price ceiling set at $4. What would be the total dollar value of goods exchanged in the market? Price Floor and Ceiling Graph $900 25.Refer to the Price Floor and Ceiling Graph. Suppose there is a price ceiling set at $7. What would be the total dollar value of goods exchanged in the market? Price Floor and Ceiling Graph $1,650