Practice Questions
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When the price of a good decreases, which of the following describes the substitution effect?
When a good gets cheaper, people tend to buy more of it. Other options are incorrect because This answer suggests that people buy less of the cheaper ...
When the price of a good decreases, how does a consumer adjust their optimal consumption bundle to maximize utility?
When a good's price goes down, it becomes cheaper. Other options are incorrect because This answer suggests that consumers will only buy the cheaper g...
How does a change in the price of a good affect a consumer's utility maximization behavior, given their preferences for that good and the marginal utility derived from it?
When the price of a good changes, consumers look at how much happiness or satisfaction they get from it. Other options are incorrect because Some migh...
When the price of a good decreases, which of the following effects contributes to the change in consumer surplus due to increased utility maximization, particularly focusing on the substitution effect?
When a good becomes cheaper, people often buy it instead of more expensive options. Other options are incorrect because This answer suggests that peop...
How does the substitution effect influence consumer surplus when the price of a good decreases, and how is this represented in terms of indifference curves?
When the price of a good goes down, people can buy more of it. Other options are incorrect because This answer suggests that happiness decreases when ...
If the price of a good decreases, what is the likely effect on the consumer's utility maximization, assuming all other factors remain constant?
When the price goes down, people can buy more of that good. Other options are incorrect because Some might think lower prices mean buying less, but th...
If the price of a good decreases, what is the likely impact on a consumer's utility maximization given their budget constraint?
When the price goes down, people can buy more of that good with the same amount of money. Other options are incorrect because Some might think that lo...
After a price change in the market, how does a consumer adjust their consumption to maximize utility?
When prices go up, people often buy less of those items. Other options are incorrect because Thinking that buying more of everything will help is a mi...
When faced with a price increase for oranges, which of the following strategies would a consumer likely consider to maximize their utility? (Select all that apply)
None of the strategies listed help a consumer get more satisfaction for their money after the price of oranges goes up. Other options are incorrect be...
If a consumer decides to buy more apples after the price of oranges increases, what underlying economic principle explains this behavior?
When oranges cost more, apples seem like a better deal. Other options are incorrect because This suggests the person has more money to spend; This ide...
If the relationship between the price of apples and the quantity consumed is similar to the relationship between the price of oranges and the quantity consumed, then the price of apples increasing would relate to the change in consumption of oranges as: A:B :: C:?
When the price of apples goes up, people might buy fewer apples. Other options are incorrect because Some might think that higher apple prices mean mo...
How should a consumer adjust their consumption of apples and oranges if the price of oranges rises, given their marginal utilities?
When the price of oranges goes up, they become less affordable. Other options are incorrect because This choice suggests buying more oranges, but high...
If the price of oranges increases, how should a consumer adjust their consumption to maximize utility?
When oranges cost more, people should buy fewer oranges. Other options are incorrect because Some might think buying more oranges is good, but higher ...
When the price of oranges increases, a consumer will likely adjust their consumption by comparing the _____ of apples and oranges to maximize their utility.
When the price of oranges goes up, people look at how much satisfaction they get for each dollar spent. Other options are incorrect because Total util...
Maria is evaluating her fruit purchases after the price of oranges has increased. Previously, she consumed 6 apples and 4 oranges, but now she can only afford 5 apples and 3 oranges within her budget. If the marginal utility of the 5th apple is 7 units and the marginal utility of the 3rd orange is 15 units, which choice reflects the best utility-maximizing decision based on her new consumption situation?
Maria should stick to 5 apples and 3 oranges. Other options are incorrect because This choice assumes oranges give more total satisfaction; This optio...
A consumer is deciding how to allocate their budget between apples and oranges after the price of oranges increases. If the marginal utility of the fourth apple is 5 and the marginal utility of the fourth orange is 10, which of the following classification best describes the consumer's optimal consumption choice?
The consumer gets more satisfaction from oranges. Other options are incorrect because Just being cheaper doesn't mean apples are better; Sticking to t...
Arrange the steps for adjusting consumption after a price change to maximize utility.
This order helps you find the best way to spend your money. Other options are incorrect because This option suggests picking a good before comparing; ...
Master Utility Maximization After Price Change
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