If demand for a product is re/ative/y elastic, this means An increase in price causes a more than proportionate decrease in quantity demanded. E.g. a 10% increase in price results in a 20% decrease in Qd An increase in price causes a decrease in the quantity demanded An increase in price causes a less than proportionate decrease in quantity demanded. E.g. a 10% increase in price results in a 5% increase in Qd An increase in price causes a proportionate decrease in quantity demanded. E.g. a 10% increase in price results in a 10% increase in Qd a large increase in price results in a small increase in quantity supplied, pply can be described as Elastic with respect to price Perfectly elastic with respect to price Inelastic with respect to price Perfectly inelastic with respect to price Suppose that at point A, the price of frisbees is $2 each and the quantity supplied is 2 frisbees. Similarly at point B, the price of frisbees is $4 each and the quantity supplied is 6 trisbees. Using the midpoint method, the price elasticity of supply is: 1.5 If a perfect substitute to firm A's product is offered by firm B, we can infer that the price elasticity of demand for firm A's product is: Negative Positive Perfectly inelastic Perfectly elastic If the price elasticity of demand for Netix movies is 0.75, and Netix moderately increases in the price to watch a movie, sales revenues for Netix should: Increase Stay the same Decrease If the Federal government raises the minimum wage to $15 per hour, for which type of products will manufacturers be able to pass more of the wage increase on to consumers through higher prices? Products that are luxuries Products that are necessities Imported products Suppose the price of our decreases, causing an increase in our consumption by bread companies. We can dene the Flour Price Elasticity of Supply of Bread as: The percentage increase in the supply of our divided by the percentage decrease in the price of bread The percentage decrease in the price of our divided by the percentage increase in the supply of bread The percentage decrease in the consumption of our divided by the percentage increase in the price of bread The percentage increase in the supply of bread divided by the percentage decrease in the price of our If an increase in the price of some product has no effect on the demand for another product, we can describe the products as: Substitute goods or services Complement goods or services Unrelated goods or services If used cars are inferior goods, it must be true that: A decrease in price causes an increase in demand for used cars A decrease in income causes an increase in demand for used cars A decrease in income causes a decrease in demand for used cars A decrease in price causes a decrease in demand for used ca rs Which of the fol lowing statements is true? If an individual consumes enough of a product, marginal utility can become negative Marginal utility is almost always greater than total utility Marginal utility increases at a decreasing rate Total utility can never decrease as consumption of a product increases Suppose the marginal utility you receive from the last unit of soda you consumed is 225 utils and the marginal utility of the last unit of hot dog consumed is 250 utils. Suppose also that the price of a soda is $0.75 and the price of a hot dog is $1.25. Given your budget constraint if you want to maximize total utility, you will: Purchase less soda and more hot dogs Purchase fewer hot dogs and more soda Purchase less soda and fewer hot dogs Stick with your current consumption of soda and hot dogs hich of the following is NOT an assumption of the utility maximization ramework? Your utility is subjective Your utility is objectively measurable by someone else After some point, marginal utility decreases the more you consume Total utility increases at a decreasing rate the more you consume Consumer equilibrium refers to: The quantity of goods or services where demand equals supply The y-intercept of the budget constraint The combination of goods and services purchased which maximizes an individual's total utility The combination of goods and services purchased which maximizes an individual's marginal utility A decrease in a consumer's income can be shown by: A parallel shift of the budget constraint away from the origin A rotation inward of the budget constraint around the X-axis leading to a reduction in the y-intercept A rotation outward of the budget constraint around the y-axis leading to an increase in the x-intercept A parallel shift of the budget constraint towards the origin If a decrease in the price of pants causes an increase in demand for shoes, it must be true that: The substitution effect of the price change on shoes exceeded the income effect The income effect of the price change on shoes exceeded the substitution effect The substitution effect and the income effect with respect to shoes exactly offset one another A demand curve for ice cream is based: Only on the substitution effect of a change in the price of ice cream On the sum of the substitution and income effects of a change in the price of ice cream Only on the income effect of a change in the price of ice cream Behavioral economics assumes that: People always choose what to purchase based on what will maximize utility People aren't always perfectly rational People typically spend all of their budgetLoss aversion refers to a finding: That an individual gains less utility from earning $10 in overtime pay than the utility they would lose from spending $ 10 in a lottery than didn't win That losing income reduces a person's utility That people prefer winning to losing