ECON exam 2 homework's - Custom Scholars
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# ECON exam 2 homework’s

question
If the price of good X rises and the demand for good X is elastic, then the percentage _______ in quantity demanded is ________ the percentage rise in price, and total revenue ______
fall; greater than; falls
question
suppose that when the price of a good rises from \$12 to \$14, the quantity demanded of that good falls from 220 units to 180 units. What is the approximate price elasticity of demand between these two prices?
1.3
question
If the percentage change in quantity demanded is less than the percentage change in price for good Y, then the demand for good Y is
inelastic
question
the fewer substitutes for a good,
the lower its price elasticity of demand
question
T/F: soap has a higher price elasticity of demand than the Ivory brand soap
False
question
The shorter the period of time consumers have to adjust to price changes, the _____ the ______ elasticity of demand
lower; price
question
cross elasticity of demand measures the responsiveness of changes in the quantity _______ of one good to changes in ________.
demanded; the price of another good
question
if the cross elasticity of demand for two goods is negative,
the goods are complements
question
if the cross elasticity of demand for good A with respect to good B is 2.7, then good A is
a substitute for good B
question
If jack bought 12 DVDs last year when his income was 40,000 and he buys 14 DVDS this year when his income is \$43,000, then his income elasticity of demand is _______ which means that DVDs are an _______ good for jack.
+2.13; normal
question
If casey bought 16 cotton t-shirts last years when her income was \$40,000 and she buys 14 cotton t-shirts this year when her income is \$45,000, then for casey cotton t-shirts are
an inferior good
question
an inferior good
a good for which the demand rises as income falls
question
suppose a producer decides that if the price of his or her product is \$10, the quantity supplied will be 1,000 units, and if the price is \$11, the quantity supplied will be 1,100. The supply of the good is
unit elastic
question
suppose the demand for a particular good is perfectly inelastic and the government decides to impose a tax on the production of this good. Who will pay the greater share of such tax?
the buyers will pay the entire share
question
marginal utility is defined as the
change in total utility a person derives from the consumption of a good decided by the change in the quantity of the good consumed
question
suppose you are eating buffalo wings at a local happy hour. the total utility from doing so after the fourth, fifth, sixth, and seventh are 80, 116, 136, 150, respectively. The marginal utility of the sixth wing is
20
question
T/F: it is possible for total utility to rise as marginal utility falls
true
question
suppose you just finished your third plateful of thanksgiving dinner and it yielded zero units of additional satisfaction. should you go back for more
no way. you could get negative utility from the fourth plateful
question
suppose the marginal utility (MU) of a paperback books is 60 and each book costs \$10, while the MU of a hamburger is 50 and each costs \$7.50. if you consume one book and buy one hamburger per week, are you attaining consumer equilibrium?
No. you need to buy more hamburgers and fewer books to move toward consumer equilibrium
question
ari is currently consuming 10 hot dogs and 8 hamburgers per week. the last hot dog she consumed yielded 20 utils while the last hamburger she ate gave her 25 utils. if hot dogs cost \$2 and hamburgers cost \$2.50, is Ari consuming the correct quantities of these two goods to be in consumer equilibrium?
yes, so there is no need to change her consumption
question
suppose a consumer is purchasing Coke and Pretzels in quantities such that she is achieving consumer equilibrium. Then the price of coke decreases. the consumer will likely ______ her consumption of coke and the marginal utility of coke will _____ while the total utility from coke will _____
increase; decrease; increase
question
suppose Valerie is consuming lipstick (L) and eye shadow (E) and nothing else. MUl= 40 and MUe=36. the price of eye shadow is \$9 and the price is \$15. what should Valerie
consume more eye shadow and less lipstick
question
if the marginal utility of a good is negative, then
consumers should buy less of it
question
suppose that a consumer purchases a combination of X and Y such that MUx/Px= 15 utils per dollar and MUy/Py=10 utils per dollar. To maximize utility, the consumer should buy
more of X and less of Y
question
don receives 100 utils from consuming two oranges. the utility he derives from consuming the second orange equals 30 utils. the information provided
is consistent with the law of diminishing marginal utility
question
if, as a person consumes additional units of a good, total utility rises by a constant amount, it follows that
marginal utility is constant
question
if a persons income falls, his or her budget constraint moves
inward toward the origin, and its slope remains the same
question
a cost is incurred when an actual monetary payment is made is an _____ cost
explicit
question
five months ago wilson opened up a health club. which of the following is an implicit cost related to the health club?
wilson previously worked as an accountant, earning 3,000 a month
question
economic profit is the difference between total revenue and
the sum of explicit and implicit costs
question
consider the following information about a business Diane opened last year: price= \$20, quantity sold=25,000; implicit cost= \$255,000; explicit cost= \$360,000. assuming that all relevant costs and revenue are noted, what was dines economic profit?
-\$115,000
question
if a firm earns normal profit, then it has generated revenues
equal to the sum of implicit and explicit costs
question
an unrecovered cost that should be disregarded in an current or future decision is also called a _____ cost.
sunk
question
Cy recently went into the business of producing and selling cardboard boxed. for this business, which of the following is most likely to be a fixed cost
fire insurance
question
the change in total cost than results from a change in output is ______ cost
marginal
question
"as additional units of a variable input are adde to a fixed input, eventually the marginal physical product of the variable input will decline" this is a statement of the
law of diminishing marginal returns
question
a rising marginal cost curve is a reflection of a
falling marginal physical product curve
question
there are 30 students in a class. the average grade for the first 29 students is 87. the grade of the remaining student is 84. given this students grade, the average grade of the 30-student class will be
lower than 87
question
which of the following cost curves is never U-shaped
the average fixed cost curve
question
economies of scale are said coexist when inputs are increased by some percentage and output increases by a ______ percentage, causing unit costs to _______
greater; fall
question
in the long run, If inputs are increased by 10 percent and output increases by 20 percent, then _______ are said to exist.
economies of scale
question
the main difference between the short run and the long run is that
in the short run, one or more inputs are fixed
question
which of the following is an implicit cost
smith, who could work for someone else, works for himself
question
if AFC is \$8 at a quantity of output of 1,000 units, and TC is \$12,000 at the same level of output, it follows that
AVC is \$4
question
the demand curve facing a perfectly competitive firm
is horizontal
question
the market demand curve in a perfectly competitive market is
downward sloping
question
the price at which a perfectly competitive firms sells its product is determined by
all sellers and buyers of the product
question
the perfectly competitive firms will seek to produce the level of output for which
marginal cost equals marginal revenue
question
a perfectly competitive firm should increase its level of production as long as
marginal level is greater than marginal cost
question
if MR>MC, then
the firm can increase its profits (or minimize its losses) by increasing output
question
Consider the following data: equilibrium price=\$15, quantity of output produced= 10,000 units, average total cost= \$12 and average variable cost \$7. Given this data, total revenue is _______, total cost is __________, and total fixed cost is
\$150,000; \$120,000; \$50,000
question
why must profits be zero in long-run competitive equilibrium?
if profits are not zero, firms will enter or exit the industry
question
if an industry is in long-run competitive equilibrium and experiences a decrease in demand, then as a result the equilibrium price will _______, which will cause the representative firm's _____ curve to shift downward and some firms will _______ the industry
fall; demand; exit
question
as firms exit an industry, the industry supply curve shifts ______ and the equilibrium price _____ until long-run competitive equilibrium is established and the surviving firms are earning _______ economic profits
leftward; rises; zero
question
which of the following is not a characteristic of perfect competition
sellers product and sell a heterogeneous product
question
if, for a perfectly competitive firm, marginal cost is greater than marginal revenue for the 100th unit, then it follows that
producing the 100th unit adds more to total cost than it does to total revenue
question
for a price taker, market equilibrium price is \$50. At 1,000 units MR=MC, ATC=\$45, and AVC=\$30. This price taker will
earn 5,000 profits if it produces 1,000 units
1 of 57
question
If the price of good X rises and the demand for good X is elastic, then the percentage _______ in quantity demanded is ________ the percentage rise in price, and total revenue ______
fall; greater than; falls
question
suppose that when the price of a good rises from \$12 to \$14, the quantity demanded of that good falls from 220 units to 180 units. What is the approximate price elasticity of demand between these two prices?
1.3
question
If the percentage change in quantity demanded is less than the percentage change in price for good Y, then the demand for good Y is
inelastic
question
the fewer substitutes for a good,
the lower its price elasticity of demand
question
T/F: soap has a higher price elasticity of demand than the Ivory brand soap
False
question
The shorter the period of time consumers have to adjust to price changes, the _____ the ______ elasticity of demand
lower; price
question
cross elasticity of demand measures the responsiveness of changes in the quantity _______ of one good to changes in ________.
demanded; the price of another good
question
if the cross elasticity of demand for two goods is negative,
the goods are complements
question
if the cross elasticity of demand for good A with respect to good B is 2.7, then good A is
a substitute for good B
question
If jack bought 12 DVDs last year when his income was 40,000 and he buys 14 DVDS this year when his income is \$43,000, then his income elasticity of demand is _______ which means that DVDs are an _______ good for jack.
+2.13; normal
question
If casey bought 16 cotton t-shirts last years when her income was \$40,000 and she buys 14 cotton t-shirts this year when her income is \$45,000, then for casey cotton t-shirts are
an inferior good
question
an inferior good
a good for which the demand rises as income falls
question
suppose a producer decides that if the price of his or her product is \$10, the quantity supplied will be 1,000 units, and if the price is \$11, the quantity supplied will be 1,100. The supply of the good is
unit elastic
question
suppose the demand for a particular good is perfectly inelastic and the government decides to impose a tax on the production of this good. Who will pay the greater share of such tax?
the buyers will pay the entire share
question
marginal utility is defined as the
change in total utility a person derives from the consumption of a good decided by the change in the quantity of the good consumed
question
suppose you are eating buffalo wings at a local happy hour. the total utility from doing so after the fourth, fifth, sixth, and seventh are 80, 116, 136, 150, respectively. The marginal utility of the sixth wing is
20
question
T/F: it is possible for total utility to rise as marginal utility falls
true
question
suppose you just finished your third plateful of thanksgiving dinner and it yielded zero units of additional satisfaction. should you go back for more
no way. you could get negative utility from the fourth plateful
question
suppose the marginal utility (MU) of a paperback books is 60 and each book costs \$10, while the MU of a hamburger is 50 and each costs \$7.50. if you consume one book and buy one hamburger per week, are you attaining consumer equilibrium?
No. you need to buy more hamburgers and fewer books to move toward consumer equilibrium
question
ari is currently consuming 10 hot dogs and 8 hamburgers per week. the last hot dog she consumed yielded 20 utils while the last hamburger she ate gave her 25 utils. if hot dogs cost \$2 and hamburgers cost \$2.50, is Ari consuming the correct quantities of these two goods to be in consumer equilibrium?
yes, so there is no need to change her consumption
question
suppose a consumer is purchasing Coke and Pretzels in quantities such that she is achieving consumer equilibrium. Then the price of coke decreases. the consumer will likely ______ her consumption of coke and the marginal utility of coke will _____ while the total utility from coke will _____
increase; decrease; increase
question
suppose Valerie is consuming lipstick (L) and eye shadow (E) and nothing else. MUl= 40 and MUe=36. the price of eye shadow is \$9 and the price is \$15. what should Valerie
consume more eye shadow and less lipstick
question
if the marginal utility of a good is negative, then
consumers should buy less of it
question
suppose that a consumer purchases a combination of X and Y such that MUx/Px= 15 utils per dollar and MUy/Py=10 utils per dollar. To maximize utility, the consumer should buy
more of X and less of Y
question
don receives 100 utils from consuming two oranges. the utility he derives from consuming the second orange equals 30 utils. the information provided
is consistent with the law of diminishing marginal utility
question
if, as a person consumes additional units of a good, total utility rises by a constant amount, it follows that
marginal utility is constant
question
if a persons income falls, his or her budget constraint moves
inward toward the origin, and its slope remains the same
question
a cost is incurred when an actual monetary payment is made is an _____ cost
explicit
question
five months ago wilson opened up a health club. which of the following is an implicit cost related to the health club?
wilson previously worked as an accountant, earning 3,000 a month
question
economic profit is the difference between total revenue and
the sum of explicit and implicit costs
question
consider the following information about a business Diane opened last year: price= \$20, quantity sold=25,000; implicit cost= \$255,000; explicit cost= \$360,000. assuming that all relevant costs and revenue are noted, what was dines economic profit?
-\$115,000
question
if a firm earns normal profit, then it has generated revenues
equal to the sum of implicit and explicit costs
question
an unrecovered cost that should be disregarded in an current or future decision is also called a _____ cost.
sunk
question
Cy recently went into the business of producing and selling cardboard boxed. for this business, which of the following is most likely to be a fixed cost
fire insurance
question
the change in total cost than results from a change in output is ______ cost
marginal
question
"as additional units of a variable input are adde to a fixed input, eventually the marginal physical product of the variable input will decline" this is a statement of the
law of diminishing marginal returns
question
a rising marginal cost curve is a reflection of a
falling marginal physical product curve
question
there are 30 students in a class. the average grade for the first 29 students is 87. the grade of the remaining student is 84. given this students grade, the average grade of the 30-student class will be
lower than 87
question
which of the following cost curves is never U-shaped
the average fixed cost curve
question
economies of scale are said coexist when inputs are increased by some percentage and output increases by a ______ percentage, causing unit costs to _______
greater; fall
question
in the long run, If inputs are increased by 10 percent and output increases by 20 percent, then _______ are said to exist.
economies of scale
question
the main difference between the short run and the long run is that
in the short run, one or more inputs are fixed
question
which of the following is an implicit cost
smith, who could work for someone else, works for himself
question
if AFC is \$8 at a quantity of output of 1,000 units, and TC is \$12,000 at the same level of output, it follows that
AVC is \$4
question
the demand curve facing a perfectly competitive firm
is horizontal
question
the market demand curve in a perfectly competitive market is
downward sloping
question
the price at which a perfectly competitive firms sells its product is determined by
all sellers and buyers of the product
question
the perfectly competitive firms will seek to produce the level of output for which
marginal cost equals marginal revenue
question
a perfectly competitive firm should increase its level of production as long as
marginal level is greater than marginal cost
question
if MR>MC, then
the firm can increase its profits (or minimize its losses) by increasing output
question
Consider the following data: equilibrium price=\$15, quantity of output produced= 10,000 units, average total cost= \$12 and average variable cost \$7. Given this data, total revenue is _______, total cost is __________, and total fixed cost is
\$150,000; \$120,000; \$50,000
question
why must profits be zero in long-run competitive equilibrium?
if profits are not zero, firms will enter or exit the industry
question
if an industry is in long-run competitive equilibrium and experiences a decrease in demand, then as a result the equilibrium price will _______, which will cause the representative firm's _____ curve to shift downward and some firms will _______ the industry
fall; demand; exit
question
as firms exit an industry, the industry supply curve shifts ______ and the equilibrium price _____ until long-run competitive equilibrium is established and the surviving firms are earning _______ economic profits
leftward; rises; zero
question
which of the following is not a characteristic of perfect competition
sellers product and sell a heterogeneous product
question
if, for a perfectly competitive firm, marginal cost is greater than marginal revenue for the 100th unit, then it follows that
producing the 100th unit adds more to total cost than it does to total revenue
question
for a price taker, market equilibrium price is \$50. At 1,000 units MR=MC, ATC=\$45, and AVC=\$30. This price taker will
earn 5,000 profits if it produces 1,000 units

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