Which of these is closest to the meaning of Jeremy Bentham's idea of utility a Satisfaction b Harmony c Minimize d Balance 2 Economists since Jeremy Bentham have referred to consumer satisfaction from goods and services as utility a True b False 3 According to the text, the principle of diminishing marginal utility in consumption explains which other economic principle a The law of supply b The law of unintended policy consequences c The fundamental principle of behavioral economic theory d The law of demand 4 Next to the utility from goods and services, consumer behavior is influenced by constraints a True b False 5 The most important constraints on consumer behavior are consumer income (budget) and product prices a True b False 6 Marginal utility is the extra satisfaction from an extra unit of the good a True b False 7 In the principle of diminishing marginal utility, what causes extra satisfaction from an extra unit of a good to diminish a The price of the good is increasing b The number of units of the good consumed is increasing c The cost of producing the good is decreasing d Use of the good by other people is increasing 8 Diminishing marginal utility was rejected as a valid economic theory in the 1800s a True b False 9 Diminishing marginal utility states that, compared to the first piece of pizza, the second piece adds a less additional cost b greater extra pleasure c less total satisfaction from pizza d less extra satisfaction 10 The law of diminishing marginal utility explains the law of demand a True b False 11 If the price of X declines from $10 to $5 and a customer had been buying 100 units of the good, other things being equal, then due to an income effect, the customer's real income has increased by $5 100 $500 a True b False 12 You buy two normal goods, A and B, with a given budget The price of A drops 10 Which effect explains that you will buy more of A and less of B a The negative income tax effect b The substitution effect c The nominal income effect d The unintended policy effect 13 The income and substitution effects of a price change for a normal good explain the law of demand a True b False 14 Good A is an economically inferior good When Price of A declines, which economic effect of the price change will demonstrate this fact a Diminishing marginal utility effect b Substitution effect c Income effect d Rising extra cost effect 15 If the price of X increases from $10 to $15 and a customer had been buying 100 units of the good per year, other things equal, then due to an income effect, the customer's real income has changed by how much a Increased $1,500 b Increased $500 c Decreased $1,500 d Decreased $500 16 When discussing an income and substitution effect, what is causing these effects to occur a A price of one good increases or it decreases b The consumer budget is made larger or smaller c The number of goods available to buy is expanded or contracted d The noneconomic behavioral constraints or incentives are altered 17 When seatbelts lowered the costs of unsafe driving, a study showed that the substitution effect of a lower price was confirmed lower costs of safety led to higher average speeds a True b False 18 In thinking about driving a car in good weather or snowy weather, what two factors does the text compare as substitutes a Comfort and gas mileage b Gas mileage and money spent on gas c Pleasure of scenery versus pain of sitting in the car d Safety and travel time 19 In considering children as durable consumer goods giving long term benefits to parents, but at a cost, economist Gary Becker considers the biggest opportunity cost of having children to be a the time spent in caring for them b the cost of sending them to college c the cost of food d the cost of clothing 20 An individual's demand curve measures the consumer's willingness to pay for each extra unit of a good a True b False

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Which of these is closest to the meaning of Jeremy Bentham's idea of utility? a. Satisfaction b. Harmony c. Minimize d. Balance 2. Economists since

Which of these is closest to the meaning of Jeremy Bentham's idea of utility?

a. Satisfaction
b. Harmony
c. Minimize
d. Balance

2. Economists since Jeremy Bentham have referred to consumer satisfaction from goods and services as utility.

a. True
b. False

3. According to the text, the principle of diminishing marginal utility in consumption explains which other economic principle?

a. The law of supply
b. The law of unintended policy consequences
c. The fundamental principle of behavioral economic theory
d. The law of demand

4. Next to the utility from goods and services, consumer behavior is influenced by constraints.

a. True
b. False

5. The most important constraints on consumer behavior are consumer income (budget) and product prices.

a. True
b. False

6. Marginal utility is the extra satisfaction from an extra unit of the good.

a. True
b. False

7. In the principle of diminishing marginal utility, what causes extra satisfaction from an extra unit of a good to diminish?

a. The price of the good is increasing.
b. The number of units of the good consumed is increasing.
c. The cost of producing the good is decreasing.
d. Use of the good by other people is increasing.

8. Diminishing marginal utility was rejected as a valid economic theory in the 1800s.

a. True
b. False

9. Diminishing marginal utility states that, compared to the first piece of pizza, the second piece adds _____.

a. less additional cost
b. greater extra pleasure
c. less total satisfaction from pizza
d. less extra satisfaction

10. The law of diminishing marginal utility explains the law of demand.

a. True
b. False

11. If the price of X declines from $10 to $5 and a customer had been buying 100 units of the good, other things being equal, then due to an income effect, the customer's real income has increased by $5 * 100 = $500.

a. True
b. False

12. You buy two normal goods, A and B, with a given budget. The price of A drops 10%. Which effect explains that you will buy more of A and less of B?

a. The negative income-tax effect
b. The substitution effect
c. The nominal income effect
d. The unintended policy effect

13. The income and substitution effects of a price change for a normal good explain the law of demand.

a. True
b. False

14. Good A is an economically inferior good. When Price of A declines, which economic effect of the price change will demonstrate this fact?

a. Diminishing marginal utility effect
b. Substitution effect
c. Income effect
d. Rising extra cost effect

15. If the price of X increases from $10 to $15 and a customer had been buying 100 units of the good per year, other things equal, then due to an income effect, the customer's real income has changed by how much?

a. Increased $1,500
b. Increased $500
c. Decreased $1,500
d. Decreased $500

16. When discussing an income and substitution effect, what is causing these effects to occur?

a. A price of one good increases or it decreases.
b. The consumer budget is made larger or smaller.
c. The number of goods available to buy is expanded or contracted.
d. The noneconomic behavioral constraints or incentives are altered.

17. When seatbelts lowered the costs of unsafe driving, a study showed that the substitution effect of a lower price was confirmed: lower costs of safety led to higher average speeds.

a. True
b. False

18. In thinking about driving a car in good weather or snowy weather, what two factors does the text compare as substitutes?

a. Comfort and gas mileage
b. Gas mileage and money spent on gas
c. Pleasure of scenery versus pain of sitting in the car
d. Safety and travel time

19. In considering children as "durable consumer goods" giving long-term benefits to parents, but at a cost, economist Gary Becker considers the biggest opportunity cost of having children to be _____.