Question 1

The following question are based on the following graph:
  
-As consumption is increased from 1 to 3 units,marginal utility is

Accepted Answer

A)  rising. 
B)  falling. 
C)  constant. 
D)  zero. 
E)  negative. 
A)  rising. 
B)  falling. 
C)  constant. 
D)  zero. 
E)  negative.

Question 2

Costs of owner-supplied resources are ________ costs.

Accepted Answer

A)  fixed 
B)  related 
C)  functional 
D)  optimal 
E)  implicit 
A)  fixed 
B)  related 
C)  functional 
D)  optimal 
E)  implicit

Question 3

A rising marginal cost curve reflects a falling ________ curve.

Accepted Answer

A)  total product 
B)  marginal product 
C)  average fixed cost 
D)  total cost 
E)  long-run average cost 
A)  total product 
B)  marginal product 
C)  average fixed cost 
D)  total cost 
E)  long-run average cost

Question 4

A rising marginal cost curve intersects the

Accepted Answer

A)  average fixed cost curve at its minimum point. 
B)  total cost curve at its minimum point. 
C)  production function at its maximum point. 
D)  average variable and average total cost curves at their minimum points. 
E)  explicit and implicit cost curves at their maximum points. 
A)  average fixed cost curve at its minimum point. 
B)  total cost curve at its minimum point. 
C)  production function at its maximum point. 
D)  average variable and average total cost curves at their minimum points. 
E)  explicit and implicit cost curves at their maximum points.

Question 5

The following question are based on the following graph:
  
-At 70 units of output per day,total variable cost is

Accepted Answer

A)  $1,000. 
B)  $1,500. 
C)  $2,500. 
D)  $3,500. 
E)  $4,500. 
A)  $1,000. 
B)  $1,500. 
C)  $2,500. 
D)  $3,500. 
E)  $4,500.

Question 6

The next question is based on the typical teenager's lunch preferences as depicted in the table.
  
-If burgers cost $1.75,fries cost $0.75,and shakes cost $1,a utility-maximizing teenager with $6 to spend on lunch will buy

Accepted Answer

A)  0 burgers, 0 fries, and 6 shakes. 
B)  0 burgers, 4 fries, and 3 shakes. 
C)  1 burger, 3 fries, and 2 shakes. 
D)  2 burgers, 2 fries, and 1 shake. 
E)  3 burgers, 1 fries, and 0 shakes. 
A)  0 burgers, 0 fries, and 6 shakes. 
B)  0 burgers, 4 fries, and 3 shakes. 
C)  1 burger, 3 fries, and 2 shakes. 
D)  2 burgers, 2 fries, and 1 shake. 
E)  3 burgers, 1 fries, and 0 shakes.

Question 7

In the short run,a firm's total costs are the sum of ________ costs and ________ costs.

Accepted Answer

A)  average; marginal 
B)  input; output 
C)  fixed; average 
D)  marginal; variable 
E)  variable; fixed 
A)  average; marginal 
B)  input; output 
C)  fixed; average 
D)  marginal; variable 
E)  variable; fixed

Question 8

This diagram shows hypothetical demand curves for individuals A and B.
 
The differences in their slopes suggest that consumer A and consumer B

Accepted Answer

A)  have very different income levels. 
B)  have different tastes. 
C)  are not subject to the law of diminishing marginal utility. 
D)  are charged different prices for the same commodity. 
E)  are offered different amounts to purchase. 
A)  have very different income levels. 
B)  have different tastes. 
C)  are not subject to the law of diminishing marginal utility. 
D)  are charged different prices for the same commodity. 
E)  are offered different amounts to purchase.

Question 9

Approximately what percentage of their income do U.S.households spend on taxes?

Accepted Answer

A)  8 percent 
B)  11 percent 
C)  23 percent 
D)  32 percent 
E)  46 percent 
A)  8 percent 
B)  11 percent 
C)  23 percent 
D)  32 percent 
E)  46 percent

Question 10

The law of diminishing marginal utility means that as more of a commodity is consumed,total utility will

Accepted Answer

A)  rise but at a declining rate. 
B)  fall steadily, eventually becoming negative. 
C)  remain unchanged until the individual is satiated. 
D)  generally be less than marginal utility. 
E)  fall when marginal utility falls. 
A)  rise but at a declining rate. 
B)  fall steadily, eventually becoming negative. 
C)  remain unchanged until the individual is satiated. 
D)  generally be less than marginal utility. 
E)  fall when marginal utility falls.

Question 11

If the marginal utility of food divided by the price of food exceeds the marginal utility of clothing divided by the price of clothing

Accepted Answer

A)  the price of food is too high and less food should be purchased. 
B)  the total utility received from food exceeds the total utility received from clothing. 
C)  more should be spent on food and less on clothing. 
D)  more clothing should be purchased to raise the marginal utility of the last dollar spent. 
E)  the price of clothing must exceed the price of food. 
A)  the price of food is too high and less food should be purchased. 
B)  the total utility received from food exceeds the total utility received from clothing. 
C)  more should be spent on food and less on clothing. 
D)  more clothing should be purchased to raise the marginal utility of the last dollar spent. 
E)  the price of clothing must exceed the price of food.

Question 12

A consumer buying food and clothing is in equilibrium when the marginal

Accepted Answer

A)  utilities of food and clothing equal the total utilities of food and clothing. 
B)  utility of the last dollar spent on food equals the marginal utility of the last dollar spent on clothing. 
C)  utilities of both goods are the same. 
D)  utilities of both goods are the greatest. 
E)  utility of food equals the price of food and the marginal utility of clothing equals the price of clothing. 
A)  utilities of food and clothing equal the total utilities of food and clothing. 
B)  utility of the last dollar spent on food equals the marginal utility of the last dollar spent on clothing. 
C)  utilities of both goods are the same. 
D)  utilities of both goods are the greatest. 
E)  utility of food equals the price of food and the marginal utility of clothing equals the price of clothing.

Question 13

The following question are based on the following diagram of the average cost curves for three different-sized plants:
  
-If the long-run average cost curve were shown,it would indicate

Accepted Answer

A)  diminishing returns. 
B)  decreasing returns to scale. 
C)  constant returns to scale. 
D)  increasing returns to scale. 
E)  constant marginal cost. 
A)  diminishing returns. 
B)  decreasing returns to scale. 
C)  constant returns to scale. 
D)  increasing returns to scale. 
E)  constant marginal cost.

Question 14

The following question are based on the following diagram of the average cost curves for three different-sized plants:
  
-If the firm is still in the planning stages of plant construction,it should choose the

Accepted Answer

A)  small plant if it expects an output rate below 3,000 units per day. 
B)  large plant regardless of output because it has the lowest per unit costs. 
C)  medium-sized plant because it would give the firm the most flexibility, allowing it to produce any output between 0 and 3,000. 
D)  small plant if it expects an output rate below 1,000 per day. 
E)  medium-sized plant because it has the advantage of increasing economies of scale. 
A)  small plant if it expects an output rate below 3,000 units per day. 
B)  large plant regardless of output because it has the lowest per unit costs. 
C)  medium-sized plant because it would give the firm the most flexibility, allowing it to produce any output between 0 and 3,000. 
D)  small plant if it expects an output rate below 1,000 per day. 
E)  medium-sized plant because it has the advantage of increasing economies of scale.

Question 15

The equilibrium market basket is the one in which the

Accepted Answer

A)  total utilities for each commodity consumed are equal. 
B)  marginal utility of the last dollar spent on all commodities purchased is the same. 
C)  marginal utility for each commodity is rising. 
D)  amount of money allocated to each commodity is proportional to the total utility received from each commodity. 
E)  price of each good is equal to its marginal utility. 
A)  total utilities for each commodity consumed are equal. 
B)  marginal utility of the last dollar spent on all commodities purchased is the same. 
C)  marginal utility for each commodity is rising. 
D)  amount of money allocated to each commodity is proportional to the total utility received from each commodity. 
E)  price of each good is equal to its marginal utility.

Exam 4: Getting Behind the Demand and Supply Curves

The following question are based on the following graph: -As consumption is increased from 1 to 3 units,marginal utility is

Costs of owner-supplied resources are ________ costs.

A rising marginal cost curve reflects a falling ________ curve.

A rising marginal cost curve intersects the

The following question are based on the following graph: -At 70 units of output per day,total variable cost is

The next question is based on the typical teenager's lunch preferences as depicted in the table. -If burgers cost $1.75,fries cost $0.75,and shakes cost $1,a utility-maximizing teenager with $6 to spend on lunch will buy

In the short run,a firm's total costs are the sum of ________ costs and ________ costs.

This diagram shows hypothetical demand curves for individuals A and B. The differences in their slopes suggest that consumer A and consumer B

Approximately what percentage of their income do U.S.households spend on taxes?

The law of diminishing marginal utility means that as more of a commodity is consumed,total utility will

If the marginal utility of food divided by the price of food exceeds the marginal utility of clothing divided by the price of clothing

A consumer buying food and clothing is in equilibrium when the marginal

The following question are based on the following diagram of the average cost curves for three different-sized plants: -If the long-run average cost curve were shown,it would indicate

The following question are based on the following diagram of the average cost curves for three different-sized plants: -If the firm is still in the planning stages of plant construction,it should choose the

The equilibrium market basket is the one in which the

What is Economics

Markets and Prices

The Business Firm: Organization,motivation,and Optimal Input Decisions

Market Demand and Price Elasticity

Economic Efficiency,market Supply,and Perfect Competition

Monopoly and Its Regulation

Monopolistic Competition,oligopoly,and Antitrust Policy

Pollution and the Environment

The Supply and Demand for Labor

Interest,rent,and Profit

Poverty,income Inequality,and Discrimination

Economic Growth

Public Goods and the Role of the Government

National Income and Product

Business Fluctuations and Unemployment

The Determination of National Output and the Keynesian Multiplier

Fiscal Policy and National Output

Inflation

Money and the Banking System

The Federal Reserve and Monetary Policy

Supply Shocks and Inflation

Productivity,growth,and Technology Policy

Surpluses,deficits,public Debt,and the Federal Budget

Monetary Policy,interest Rates,and Economic Activity

Controversies Over Stabilization Policy

International Trade

Exchange Rates and the Balance of Payments

Filters

In the short run,a firm's total costs are the sum of costs and costs.