Micro Test 3 - Custom Scholars
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# Micro Test 3

question
The following table shows a hypothetical total utility schedule for a consumer of chocolate candy bars. USE the table to answer the following questions. This consumer begins to experience diminishing marginal utility when he consumes the
third candy bar
question
Based on the table, marginal utility becomes negative with the consumption of the
seventh candy bar
question
Based on the data from the table you can conclude that the
total utility of 5 units is 42
question
The branch of economics that seeks to enrich the understanding of decision-making by integrating the insights of psychology and by investigating how given dollar amounts can mean different things to individuals depending on the situation, is called
Behavioral economics
question
The common pattern that each marginal unit of a good consumed provides less of an addition to utility than the previous unit, is called
Diminishing marginal utility
question
The additional utility provided by one additional unit of consumption is called
marginal utility
question
When a price changes, consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price. This is known as
Substitution effect
question
If the long-run average-total-cost curve for a firm is downsloping, this indicates that there
are economics of scale
question
Utility as defined in this unit refers to the
satisfaction or pleasure from consuming a good
question
Which of the following is true?
TC= TVC + TFC
question
20
question
Now assume Samantha's weekly income is \$12, the price of a pizza is \$2, and the price of music downloads is \$1. What is the utility-maximizing quantity of pizza and music downloads if she spends her entire \$12?
4 units of pizza and 4 units of music
question
In order to determine the average variable cost, the firm's variable costs are divided by
The quantity of output
question
In order to calculate marginal cost, changes in _______ are divided by the amount of changes in quantity.
total costs
question
Direct, purchased, out-of-pocket costs paid to resource suppliers outside the firm are called
explicit costs
question
Indirect, non-purchased, or opportunity costs of resources provided by the entrepreneur are known as
implicit cost
question
As a general rule, utility-maximizing choices between consumption goods occur where the:
price ratio and marginal utilities ratio of two goods is equal
question
If a business owner has a \$100,000 accounting profit, and could have made exactly \$50,000 in his next best business opportunity, he has earned
\$50,000 in economic profits
question
With capital fixed at one unit with 1, 2, 3 units of labor added in equal successive units, production of the output increases from 300 (1 unit of labor), to 350 (2 units of labor) to 375 (3 units of labor). Which of the following is a correct interpretation?
This is short run diminishing marginal productivity
question
Marginal cost (MC) is equal to average variable cost (AVC) and average total cost (ATC) when:
MC interests AVC and ATC at their minimum points
question
Which of the following statements is true regarding the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves?
If MC is greater than ATC and AVC, then ATC and AVC must be increasing
question
The fixed cost of the firm is \$500, and the firm's total variable cost is indicated in the following table. The average variable cost of the firm when 4 units of output are produced is:
\$175
question
The average total cost of the firm when 4 units of output are being sold is
\$300
question
The marginal cost of the sixth unit of output is
\$800
question
Which cost curves do 1, 2, 3, and 4 represent in order from 4 to 1 ?
MC, ATC, AVC, AFC
question
Summing the marginal utilities of each unit consumed will determine total
utility
question
The price of water is substantially less than the price of diamonds because
the marginal utility of a diamond is significantly greater than the marginal utility of a gallon of water
question
Suppose a firm produces 100,000 units a year and sells them all for \$5 each. The explicit costs of production are \$350,000, and the implicit costs of production are \$100,000. The firm has an accounting profit of
\$150,000 and an economic profit of \$50,000
question
less because they decrease total utility
question
A firm has total fixed costs of \$4,000 a year. The average variable cost is \$3.00 for 2,000 units of output. At this level of output, its average total costs are
\$5.00
1 of 30
question
The following table shows a hypothetical total utility schedule for a consumer of chocolate candy bars. USE the table to answer the following questions. This consumer begins to experience diminishing marginal utility when he consumes the
third candy bar
question
Based on the table, marginal utility becomes negative with the consumption of the
seventh candy bar
question
Based on the data from the table you can conclude that the
total utility of 5 units is 42
question
The branch of economics that seeks to enrich the understanding of decision-making by integrating the insights of psychology and by investigating how given dollar amounts can mean different things to individuals depending on the situation, is called
Behavioral economics
question
The common pattern that each marginal unit of a good consumed provides less of an addition to utility than the previous unit, is called
Diminishing marginal utility
question
The additional utility provided by one additional unit of consumption is called
marginal utility
question
When a price changes, consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price. This is known as
Substitution effect
question
If the long-run average-total-cost curve for a firm is downsloping, this indicates that there
are economics of scale
question
Utility as defined in this unit refers to the
satisfaction or pleasure from consuming a good
question
Which of the following is true?
TC= TVC + TFC
question
20
question
Now assume Samantha's weekly income is \$12, the price of a pizza is \$2, and the price of music downloads is \$1. What is the utility-maximizing quantity of pizza and music downloads if she spends her entire \$12?
4 units of pizza and 4 units of music
question
In order to determine the average variable cost, the firm's variable costs are divided by
The quantity of output
question
In order to calculate marginal cost, changes in _______ are divided by the amount of changes in quantity.
total costs
question
Direct, purchased, out-of-pocket costs paid to resource suppliers outside the firm are called
explicit costs
question
Indirect, non-purchased, or opportunity costs of resources provided by the entrepreneur are known as
implicit cost
question
As a general rule, utility-maximizing choices between consumption goods occur where the:
price ratio and marginal utilities ratio of two goods is equal
question
If a business owner has a \$100,000 accounting profit, and could have made exactly \$50,000 in his next best business opportunity, he has earned
\$50,000 in economic profits
question
With capital fixed at one unit with 1, 2, 3 units of labor added in equal successive units, production of the output increases from 300 (1 unit of labor), to 350 (2 units of labor) to 375 (3 units of labor). Which of the following is a correct interpretation?
This is short run diminishing marginal productivity
question
Marginal cost (MC) is equal to average variable cost (AVC) and average total cost (ATC) when:
MC interests AVC and ATC at their minimum points
question
Which of the following statements is true regarding the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves?
If MC is greater than ATC and AVC, then ATC and AVC must be increasing
question
The fixed cost of the firm is \$500, and the firm's total variable cost is indicated in the following table. The average variable cost of the firm when 4 units of output are produced is:
\$175
question
The average total cost of the firm when 4 units of output are being sold is
\$300
question
The marginal cost of the sixth unit of output is
\$800
question
Which cost curves do 1, 2, 3, and 4 represent in order from 4 to 1 ?
MC, ATC, AVC, AFC
question
Summing the marginal utilities of each unit consumed will determine total
utility
question
The price of water is substantially less than the price of diamonds because
the marginal utility of a diamond is significantly greater than the marginal utility of a gallon of water
question
Suppose a firm produces 100,000 units a year and sells them all for \$5 each. The explicit costs of production are \$350,000, and the implicit costs of production are \$100,000. The firm has an accounting profit of
\$150,000 and an economic profit of \$50,000
question
less because they decrease total utility
question
A firm has total fixed costs of \$4,000 a year. The average variable cost is \$3.00 for 2,000 units of output. At this level of output, its average total costs are
\$5.00

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