Sophia Microeconomics Unit 2 Milestone 2. Complete With Answers.

Sophia Microeconomics Unit 2 Milestone 2. Complete With Answers. Which of the following is an example of the law of diminishing returns? If Shane and Marie order an additional bucket of popcorn, it will provide more satisfaction to them than the first bucket. The rate of utility gained decreases each additional hour that Isabella stays up to study, because her studying provides less benefit to her as she starts to get tired. As Alice consumes more tea, each additional cup of tea provides her with more satisfaction than the previous one. As Shana continues to win more and more first place awards, each additional first place award means more to her than the previously earned ones. CONCEPT Utility Theory 2 Determine which scenario below is an example of own-price elasticity. Helium balloons are on sale this week, so LaTisha will need fewer streamers for the party to celebrate her husband's job promotion. If the price of leather sofas increases next month, Heather will opt to purchase a microfiber sofa instead. Tom, a construction foreman, will buy 100 sheets of plywood when the price is $12 per sheet. He will buy 150 sheets of plywood when the price drops to $10 per sheet. Because he makes more money this year than he did last year, George purchased more gifts for his family members this year. CONCEPT Own-Price Elasticity 3 This preference map shows the various amounts of DVDs and magazines Jennifer likes to purchase each month, depending on her monthly income. Which of the following statements best describes why Jennifer will not choose option C on the preference map? Although she would enjoy option C, she would prefer B. Option A would provide utility maximization. Although she would prefer option C, she cannot choose it due to budget constraints. Option C is on the budget constraint. CONCEPT Optimal Choice 4 Select the statement below that is true. Indifference means that only a particular combination of goods are preferable to the consumer. Completeness means that none of the items in a set should be missing. Non-satiation means that more is always better. The consumer's preference is indicated by the Y axis.