AP Microeconomics – Unit 3 Test

The following chart shows the total utility that Juan receives from consuming various amounts of chocolate candy bars each day.

Following a decrease in the supply of oranges, the price of orange juice increased by 20 percent, which resulted in a 10 percent increase in the quantity of apple juice consumed. This implies that the cross elasticity of demand between orange juice and apple juice is

If raising ticket prices for Brad Paisley concert tickets increases total ticket revenue, then the demand for the concert tickets is:

Refer to the chart below. If the student purchases 2 units of pizza and 2 units of pens, the student's total utility will be

If a store raises its prices by 20 percent and its total revenue increases by 10 percent, the demand it faces in this price range must be

In a given time period, a person consumes more and more of a good or service and, as a result, enjoys each additional unit less and is willing to pay less for each additional unit. This behavior is consistent with the law of

If an increase in the price of good X causes a drop in demand for good Y, good Y is

Consumer surplus is defined as

Jessica's optimal combination of hot dogs and hamburgers generates maximum total satisfaction of:

Which of the following must be true if the revenues of wheat farmers increase when the price of wheat increases?

If a one-of-a-kind Etruscan vase is offered for sale at an auction, which, if any, of the following correctly shows the supply curve for the vase?

Assume that products X and Y are substitutes. If the cost of producing X decreases and the price of Y increases, which of the following will occur to the equilibrium price and quantity of X?

The price of an airline ticket is typically lower if a traveler buys the ticket several weeks before the flight's departure date rather than on the day of departure. This pricing strategy is based on the assumption that

To alleviate a financial crisis, a university increases student fees. This action will increase university revenues if the price elasticity of demand for university education is

Refer to the graph below. If a price ceiling is set at P1, which of the following areas represent the resulting consumer surplus, producer surplus, and deadweight loss?

In each part below, assume that the government imposes a per-unit sales tax and that the supply curve is upward-sloping.

(a) In industry X, consumers buy the same quantity no matter what the price is.

(i) Using a correctly labeled graph, show what happens to the quantity sold when the tax is imposed.

(ii) How will the burden of the tax be distributed between buyers and sellers?

(b) In industry Y, the market demand curve is perfectly elastic.

(i) Using a correctly labeled graph, show what happens to the price of the good that the consumers pay when the tax is imposed.

(ii) How will the burden of the tax be distributed between buyers and sellers?

(c) In industry Z, the market demand curve is downward-sloping. Using a correctly labeled graph, shade the area that represents total tax revenues.

Utility and price elasticity of demand are important concepts in explaining consumer behavior.

(a) Define marginal utility.
(b) The table below shows the quantities, prices, and marginal utilities of two goods, fudge and coffee, which Melissa purchases. Melissa spends all her money and buys only these two goods. In order to maximize her utility, should Melissa purchase more fudge and less coffee, purchase more coffee and less fudge, or maintain her current consumption? Explain.
(c) Assume that consumers always buy 20 units of good Q each month regardless of its price.
(i) What is the numerical value of the price elasticity of demand for good Q?
(ii) If the government implements a per-unit tax of $2 on good Q, how much of the tax will the seller pay