Consumer Choice Theory MCQs
Consumer Choice Theory MCQs
Answer these 30 Consumer Choice Theory MCQs and see how sharp is your knowledge of Consumer Choice Theory.
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1: A field of economics that incorporates insights from human psychology is called
A. Environmental economics
B. Behavioral economics
C. Health and education economics
D. Business economics
2: Consumer equilibrium is Based on the ratio of ________Utility.
A. Fixed Utility
B. Total Utility
C. Marginal Utility
D. Additional Utility
3: Diminishing marginal utility is A good’s ability to provide ____ satisfaction with each successive unit consumed
A. Less
B. More
C. Most
D. Extra
4: Income effect occurs because of a consumer’s ____ purchasing power.
A. Increased
B. Decreased
C. Reduced
D. Extra
5: Extra satisfaction generated by consumption of an additional good during a specific time period is called
A. Marginal Utility
B. Fixed Utility
C. Total Utility
D. Additional Utility
6: Substitution effect is when a consumer’s switch to another similar good when the _____ of the preferred good increases
A. Quantity
B. Quality
C. Price
D. Production
7: Substitution effect is when a consumer’s switch to another similar good when the _____ of the preferred good increases
A. Quantity
B. Quality
C. Price
D. Production
8: Total amount of satisfaction derived from the consumption of a certain number of goods or services is known as
A. Marginal Utility
B. Fixed Utility
C. Total Utility
D. Utility
9: One unit of satisfaction is called
A. Utility
B. Util
C. Marginal Utility
D. Fixed Utility
10: Utility is ________ of Satisfaction
A. One Unit
B. Relative levels
C. Reduced levels
D. Multi Unit
11: Which of the following is used to explain why the demand curve has a downward slope?
A. Consumer choice theory
B. Endowment effect
C. Law of diminishing marginal utility
D. Bounded rationality
12: Which of the following do economists define as equal to one unit of satisfaction?
A. One util
B. Total utility
C. Marginal utility
D. Anchor price
13: Economists recognize that it is not really possible to make ______ utility comparisons.
A. Total
B. Income-based
C. Intrapersonal
D. Interpersonal
14: As consumption increases, ______ also increases.
A. Total utility
B. The endowment effect
C. The income effect
D. The substitution effect
15: What happens to marginal utility as consumption increases?
A. It holds steady.
B. It decreases.
C. It increases.
D. It briefly decreases before increasing.
16: Extra satisfaction generated by consumption of an additional good or service during a specific time period is known as ______.
A. Total utility
B. Marginal utility
C. One util
D. Utility
17: Because of the law of diminishing marginal utility, the marginal utility curve has a(n) ______ slope.
A. Negative
B. Positive
C. Zero
D. Undefined
18: A consumer will stop buying one good and start buying a second good if she gets ______.
A. More total satisfaction from the first good
B. More total satisfaction from the second good
C. More satisfaction per dollar from the first good
D. More satisfaction per dollar from the second good
19: Consumer equilibrium occurs when all goods ______.
A. Are equally satisfying to all consumers
B. Cost the same regardless of how satisfying they are
C. Deliver the same “bang for the buck”
D. Are affordable to consumers with a fixed budget
20: If a movie ticket and a dance recital ticket cost the same, but the marginal utility of the dance recital ticket is greater than the marginal utility of the movie ticket, then consumers will buy ______.
A. More dance recital tickets
B. More movie tickets
C. Equal amounts of movie and dance recital tickets
D. Fewer tickets overall
21: At consumer equilibrium, the marginal utility per dollar for smartphones and tablets would be ______.
A. Equal
B. Zero
C. One
D. Infinite
22: Behavioral economics augments the traditional economic model by drawing on which of the following fields?
A. Sociology
B. Psychology
C. Anthropology
D. History
23: When consumers rely on decisions they feel have worked well enough in the past, they are using ______.
A. Anchoring
B. The endowment effect
C. Framing
D. Rules of thumb
24: Standard economics views consumers as ______.
A. Highly limited
B. Somewhat unrealistic
C. Completely self-controlled
D. Occasionally irrational
25: When we own something, we value it more than other people do. This is known as ______.
A. Framing
B. The endowment effect
C. Anchoring
D. The ultimatum game
26: Classical conditioning takes place when a(n) ________ is continuously matched with a(n) ________.
A. Conditioned stimulus; conditioned response
B. Unconditioned response; conditioned response
C. Conditioned stimulus; unconditioned stimulus
D. Unconditioned stimulus; unconditioned response
27: In the goods market, firms ________ and households ________.
A. Social Sec taxes; supply goods and services
B. Capital goods; Social Sec taxes
C. Supply goods and services; purchase goods and services
D. Only firms; Social Sec taxes
28: __________ is the theoretical basis for reality therapy.
A. WDEP theory
B. Choice theory
C. Behavior therapy
D. Cognitive behavioral therapy
29: The global trend towards large multinational firms is partially driven by __________.
A. Absolute advantage
B. Specialization
C. Opportunity cost
D. Comparative advantage
30: A period of strong economic growth tends to make a __________________.
A. Trade surplus larger
B. A trade surplus
C. Trade deficit larger
D. None of these
31: A monopolist's goal is to maximize _____.
A. Output
B. Costs
C. Profits
D. None of these
32: A person ________ be cheaply prevented from using national defense, a(n) ________ good.
A. Can; excludable
B. Cannot; nonexcludable
C. Cannot; excludable
D. None of these
33: A price ceiling is a legally imposed ___________ price.
A. Maximum
B. Minimum
C. Both a & b
D. None of these
34: A system of allocating scarce goods and services using criteria other than price is _____.
A. Search Cost
B. Rationing
C. Supply Shock
D. Black Market
35: ____ deals with the likelihood that an agency or department can implement a policy well.
A. Administrative feasibility
B. Efficiency
C. Technical feasibility
D. Security managers
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