AP Econ Unit 3 Review - Consumer Choice

Question 1

The seller's total revenue at point S equals the:

Accepted Answer

area 0PSM.

Question 2

Income elasticity of demand is ___________ for a normal good that is income-elastic.

Accepted Answer

positive and greater than 1

Question 3

At the optimal consumption bundle:

Accepted Answer

marginal utility per dollar spent is equal for all goods

Question 4

Coffee and tea are substitutes. If Price of coffee increases, total surplus in the tea market:

Accepted Answer

will increase.

Question 5

The incidence of a tax pertains to....

Accepted Answer

who actually bears the burden of a tax.

Question 6

What is the length of time where at least one input is fixed?

Accepted Answer

Short Run

Question 7

The marginal utility of coffee is the change in _____ by consuming an additional unit of coffee

Accepted Answer

total utility

Question 8

In order to compare the value of different products on an equal basis, we must calculate:

Accepted Answer

marginal utility per dollar

Question 9

If there is an increase in supply, all else equal, total surplus:

Accepted Answer

will increase.

Question 10

Consumers who maximize utility are said to be:

Accepted Answer

rational

Question 11

At the point where total utility is at a maximum, marginal utility is:

Accepted Answer

zero.

Question 12

P of tonic up 6%, 2% fewer limes sold. Cross-price elas. for limes & tonic is __ & they are __

Accepted Answer

- .33; complementary

Question 13

There is a bountiful harvest of grapefruit, total consumer surplus in the grapefruit market:

Accepted Answer

will increase.

Question 14

In which of the following instances will total revenue decline?

Accepted Answer

price rises and demand is elastic

Question 15

If the market for grapefruit is in equilibrium without any government intervention:

Accepted Answer

the sum of consumer and producer surplus is maximized.

Question 16

Costs of taxation

Accepted Answer

often lead to a loss of surplus for society

Question 17

Choices that maximize total utility generally produce demand curves that are

Accepted Answer

downward-sloping.

Question 18

The cross-price elasticity of demand measures....

Accepted Answer

effect of change in one good's P on the QD of another good.

Question 19

The consumption of most goods and services is subject to:

Accepted Answer

law of diminishing marginal utility

Question 20

Economists identify the satisfaction a person derives from the consumption of products as:

Accepted Answer

utility

Question 21

If the price of a product decreases, this will result in which combination of the following?

Accepted Answer

Cons. surplus will go up and prod. surplus will go down.

Question 22

When the price elasticity of demand for a good equals zero...

Accepted Answer

The demand curve will be vertical

Question 23

Which of the following would be most likely to have a vertical supply curve?

Accepted Answer

paintings by Van Gogh

AP Econ Unit 3 Review - Consumer Choice

Questions 23

AP Econ Unit 3 Review - Consumer Choice

Questions 23