A

1. What evidence is there that the sum total of human wants cannot be satisfied?

2. Why does a clothier often advertise without mentioning prices?

3. How does variety affect consumption?

4. Does the law of diminishing utility apply to the possession of money ?

5. If the supply of goods be increased, how would the value of each unit be affected? the value of the total stock? Explain.

6. Why is money usually said to have a "reflected" marginal utility ?

7. Explain the conditions under which a large consumers' surplus would exist; a small consumers' surplus.

8. Why is it more difficult to measure the consumers' surplus of water than of oranges?

B

1. Compare the window display of a ten-cent store with the window display of a dealer in ladies' ready-to-wear garments in the following respects: a. Variety of goods displayed. 6. Price tags.

c. Attractiveness.

d. Effect on intensity of wants.

2. Name 25 nationally advertised goods. Why does a monopolist advertise his products?

3. Make a list of ten of your personal wants in the order of their intensity. Would this order be changed if each were multiplied by five?

4. Make a list of the articles you would buy if you had $100. How would this list be affected if, instead of $100, you had $200?

a. Would the number of items be increased?

b. Would the first list contain items not included in the second list?

c. Would the second list contain the same amount of any item or items included in the first list?

d. Is it likely that the second list will contain but one item ?

5. Call to mind some recent purchases you have made. In which did each of the following have an influence: a. Law of diminishing utility ?

b. Law of marginal utility?

c. Consumers' surplus?

6. Estimate the amount of consumers' surplus in the purchase of a lead pencil, a pair of shoes, a dish of ice cream, a loaf of bread, a suit of clothing.

C

1. Many people condemn window displays and advertising as an economic waste. Discuss from the standpoint of: a. Social progress.

b. Service to the consumer.

c. Good will in merchandising.

2. A prominent lawyer recently told the story of how his greatest, unattained ambition when a boy had been to own a shotgun. Now he has wealth enough to buy hundreds of such guns, but has not one.

a. Account for his change in desires.

b. Did he have a demand for a gun when he was a boy?

c. Has he now a demand for a gun?

3. "A clothier, when he goes into the market to buy goods, usually has some adequate notion of the marginal utilities of his customers." a. Why do some clothiers handle only expensive clothing?

b. Why do others handle cheaper grades?

c. Why do some handle both expensive and cheap grades ?

Supplementary Reading

Bullock, Introduction to the Study of Economics, 3d ed., pages 84-96

Ely, Outlines of Economics, 3d ed., pages 132-139.

Fisher, Elementary Principles of Economics, pages 281-300.

Johnson, Introduction to Economics, pages 23-28.

Seager, Principles of Economics, pages 89-100.

Seligman, Principles of Economics, 5th ed., pages 173-184.

Taussig, Principles of Economics, 2d ed., Vol. I, pages 124-137.