Question 1

NARRBEGIN: Exhibit 6-15
Exhibit 6-15
 
-Consumer surplus can be used to compare the effects of any of the following except for different

Accepted Answer

The answer of NARRBEGIN: Exhibit 6-15
Exhibit 6-15
 
-Consumer surplus can...

Question 2

In most markets, each consumer

Accepted Answer

While consumers may see the same money price for a product, they will have different time prices based on their opportunity cost of time. For example, a consumer who values their time highly may be willing to pay a premium for a product that saves them time, while someone who has more free time may be willing to wait for a lower price. This creates different time prices for different consumers while the money price remains the same.

Question 3

Your willingness to pay additional money for time-saving goods depends primarily on

Accepted Answer

Your willingness to pay additional money for time-saving goods depends primarily on the opportunity cost of your time. This means that it is primarily determined by how much you value your time, based on what else you could be doing with that time. If your time is very valuable to you (i.e. you could be making more money or doing something else you enjoy), then you will be more willing to pay extra money for goods and services that save you time.

Question 4

The demand for a service like medical care

Accepted Answer

The demand for medical care is sensitive to the time component of cost. This means that people are more likely to seek medical care when they perceive it as urgent or necessary, regardless of the price. However, when it comes to non-urgent or elective medical services, people are more likely to weigh the cost against the benefit and may opt to delay or forego the service altogether. Therefore, demand for medical care can be influenced by the time factor and is not perfectly inelastic or elastic. It is also not an inferior good, as an increase in income generally increases the demand for medical care.

Question 5

One reason why a consumer might buy from a high-priced local hardware store instead of going to a big discount store several miles away in another community is that

Accepted Answer

This is because the consumer values time highly and is willing to pay a little more in money prices to save time by shopping at the local hardware store instead of traveling several miles away to a big discount store.

Question 6

Opportunity cost is measurable only when prices are known

Accepted Answer

The answer of Opportunity cost is measurable only when prices...

Question 7

Which of the following must be true of an attorney who buys a portable computer so that she can work on trains and planes?

Accepted Answer

The answer of Which of the following must be true...

Question 8

Which of the following people would be least likely to search the newspaper ads for bargains and clip store coupons?

Accepted Answer

An attorney earning $100 per hour is the least likely to search for bargains and clip store coupons as their income is high enough to not need to rely on discounts and deals.

Question 9

Which of the following statements is true?

Accepted Answer

The time price is the amount of time spent to acquire a good or service, while the money price is the amount of money spent to acquire the same good or service. Low-wage earners have relatively less money but more time, while high-wage earners have relatively more money but less time. Therefore, the time price is usually less for low-wage earners than for high-wage earners, making option D the correct statement.

Question 10

People who use drive-through windows at restaurants and eat while on the road tend to

Accepted Answer

People who use drive-through windows and eat while on the road have a high opportunity cost of time because they choose to sacrifice the time it would take to sit down and eat in order to save time.

Question 11

Although some tastes do change over time, economists believe that tastes are relatively stable. If tastes were not mostly stable, then we

Accepted Answer

If tastes were not mostly stable, we could not reasonably make the other-things-constant assumption required for demand analysis. This assumption states that all other factors, besides price, that affect demand remain constant, which is only feasible if tastes remain stable.

Question 12

Which of the following people is least likely to clip store coupons?

Accepted Answer

A high-priced consultant is least likely to clip store coupons as they may have a higher income and may not see the perceived value in doing so.

Question 13

Time has a positive value for most people, but their opportunity costs of time differ.

Accepted Answer

This statement is true. While time is generally seen as a valuable resource, the opportunity cost of using that time (i.e. what else could have been done with that time) can differ depending on the individual and their priorities.

Question 14

NARRBEGIN: Exhibit 6-15
Exhibit 6-15
 
-On a normal day, Emily Mapai's demand curve for a cup of hot chocolate is initially shown as D in Exhibit 6-15. On a day when the high temperature does not get above zero degrees, her demand curve increases to D'. At a price P for a cup of hot chocolate, Emily's consumer surplus on a freezing day

Accepted Answer

Emily's consumer surplus would increase a great deal on a freezing day because her demand curve shifts to D', indicating that she is willing to pay a higher price for a cup of hot chocolate than on a normal day. This means that at the same price P, Emily would receive a greater consumer surplus on a freezing day compared to a normal day.

Question 15

A business executive who buys a portable computer so that she can work on airplanes is trying to reduce the cost of traveling.

Accepted Answer

By purchasing a portable computer, the business executive can work on airplanes instead of being unproductive during travel time. This can ultimately reduce the amount of time she needs to spend at a destination, thus reducing travel costs.

Question 16

The cost of consumption has two components:

Accepted Answer

The answer of The cost of consumption has two components:
...

Question 17

When a service, such as medical care, is provided free of charge,

Accepted Answer

The answer of When a service, such as medical care,...

Question 18

Suppose you want to get to Orlando, Florida, for the week-long spring break. You can get there in two and one-half days by bus, and back in another two and one-half days. This will cost you $20 round-trip. You can fly there and back in four hours each way. This will cost $200. Which of the following is not true?

Accepted Answer

The answer of Suppose you want to get to Orlando,...

Question 19

The fact that some consumers will purchase a nine-ounce bottle of Evian water for $1.49, equivalent to $21.19 per gallon, illustrates the principle that the additional cost of the water is greater than the additional benefit.

Accepted Answer

The principle illustrated here is that consumers perceive the additional benefit of the convenience, brand, or quality of the Evian water to be worth the additional cost, not that the cost is greater than the benefit.

Question 20

Which of the following economic explanations describes "cabin fever"?

Accepted Answer

"Cabin fever" refers to the negative psychological effects of being confined indoors due to inclement weather. Option B, which states that each additional cold day brings more disutility (or negative utility), best describes this phenomenon.

Quiz 6: Consumer Choice and Demand

NARRBEGIN: Exhibit 6-15 Exhibit 6-15 -Consumer surplus can be used to compare the effects of any of the following except for different