MicroEconomics Feng Test 2

question

If a consumer purchases any combination of goods and services on his ________, he will exhaust his income completely.

answer

budget constraint

question

Assume that a combination of 10 bottles of wine and 2 cartons of milk lies on a consumer's budget constraint. If the price of one bottle of wine is $10, and one carton of milk is $1, what is the consumer's income?

answer

$102

question

The following figure displays John's budget constraint when he spends his income on tables and chairs.

Refer to the figure above. If John spends his entire income on tables, how many tables can he purchase?

answer

40... (where he is only spending money on TABLES and 0 dollars on chairs. at the x-axis in this example)

question

The following figure displays John's budget constraint when he spends his income on tables and chairs.

Refer to the figure above. If John spends his entire income on chairs, how many chairs can he purchase?

answer

8... (where he is only spending money on CHAIRS and 0 dollars on tables. at the y-axis in this example)

question

The following figure displays John's budget constraint when he spends his income on tables and chairs.

Refer to the figure above. If the price of a table is $2, what is John's income?

answer

$80

question

The following figure illustrates the budget constraint of a consumer of jeans and sweaters.

Refer to the figure above. A change in the budget constraint from B1 to B2 indicates:

answer

a decrease in the price of sweaters

question

The following figure illustrates the budget constraint of a consumer of jeans and sweaters.

Refer to the figure above. A change in the budget constraint from B2 to B3 indicates:

answer

an increase in the consumers income

question

The following figure shows the market demand curve for calculators. Refer to the figure above. What is the market-wide consumer surplus when the market price of calculators is $6?

answer

$50

question

The following figure shows the market demand curve for calculators. Refer to the figure above. What is the market-wide consumer surplus when the market price of calculators is $3?

answer

$1,000

question

________ in economics is a measure of satisfaction or happiness that comes from consuming a good or service.

answer

Utility

question

The following figure shows the indifference curves (IC) and the budget constraint (BC) of a consumer who needs to decide between the number of trousers and shirts he should purchase.

Refer to the figure above. Given the consumer's budget constraint, the consumption bundle that maximizes his satisfaction consists of:

answer

20 shirts and 15 trousers

question

Manuri has $300 to spend on Pilates classes and Yoga classes. The price of a group Pilates class is $20 and the price of a group Yoga class is $10. Manuri's optimal bundle is given by "A" in Figure 9-6.

Refer to Figure 10-6. Suppose the price of Pilates sessions rises to $30 while income and the price of Yoga sessions remain unchanged. What is her new optimal bundle?

answer

bundle c

question

Manuri has $300 to spend on Pilates classes and Yoga classes. The price of a group Pilates class is $20 and the price of a group Yoga class is $10. Manuri's optimal bundle is given by "A" in Figure 9-6.

Refer to Figure 10-6. Suppose the price of Pilates sessions rise to $30 while income and the price of Yoga sessions remain unchanged. The substitution effect of this price change is represented by the movement from

answer

A to D

question

Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.

Refer to Table 10-2. What is Keira's marginal utility per dollar spent on the third cup of soup?

answer

6 units of utility

question

Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.

Refer to Table 10-2. If Keira maximizes her utility, how many units of each good should she buy?

answer

3 cups of Soup and 4 Sandwhiches

question

Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.

Refer to Table 10-2. Suppose Keira's income increases from $18 to $23 but prices have not changed. What is her utility maximizing bundle now?

answer

4 cups of Soup and 5 Sandwhiches

question

A characteristic of the long run is

answer

all inputs can be varied

question

Which of the following is the best example of a short run adjustment?

answer

Your local Walmart has two more associates

question

Academic book publishers hire editors, designers, and production and marketing managers who help prepare books for publication. Because these employees work on several books simultaneously, the number of people the company hires will not go up and down with the quantity of books the company publishes during any particular year. The salaries and benefits of people in these job categories will be included in

answer

fixed cost and total cost, but not variable cost

question

The marginal product of labor is defined as

answer

the additional output that results when one more worker is hired, holding all other resources constant.

question

The law of diminishing marginal returns states

answer

that at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline.

question

If diminishing marginal returns have already set in for Golden Lark Woodworks, and the marginal product of the 6th carpenter is 8 chairs, then the marginal product of the 7th carpenter is

answer

less than 8 chairs

question

Refer to Figure 11-1. The marginal product of the 3rd worker is

answer

question

Refer to Figure 11-1. The marginal product of the 7th worker is

answer

-2

question

Refer to Figure 11-1. The marginal product of the 4th worker is

answer

question

Refer to Figure 11-2. The curve labeled "E" is

answer

the marginal product curve

question

Refer to Figure 11-2. The curve labeled "F" is

answer

the average product curve

question

Refer to Figure 11-2. Diminishing returns to labor set in

answer

after L1

question

Refer to Figure 11-2. Short run output is maximized at

answer

question

Marginal cost is equal to the

answer

change in total cost divided by change in output

question

Average fixed costs of production

answer

fall as long as output is increased

question

Which of the following equations is correct?

answer

AFC + AVC = ATC

question

When the average total cost is $16 and the total cost is $800, then the number of units the firm is producing is

answer

question

Average variable cost can be calculated using any of the formulas below except

answer

Delta(TC-FC)DeltaQ

question

Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.

Refer to Table 11-3. What is the variable cost of production when the firm produces 115 lanterns?

answer

$1,157

question

Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.

Refer to Table 11-3. What is the average total cost of production when the firm produces 120 lanterns?

answer

$14

question

Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.

Refer to Table 11-3. What is the average variable cost per unit of production when the firm produces 90 lanterns?

answer

$5.44

question

Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.

Refer to Table 11-3. What is the marginal cost per unit of production when the firm produces 100 lanterns?

answer

$32

question

Figure 11-8 shows the optimal input combinations for the production of a given quantity of cotton in the United States and in China.

Refer to Figure 11-8. Consider the following statements:
a. For each country, the marginal product per dollar spent on labor equals to the marginal product
per dollar spent on capital.
b. The price of labor is relatively higher in the United States than in China and the price of capital
is relatively lower in the United States than in China.
c. The price of labor and the price of capital are relatively higher in the United States than in
China. Based on the figure, which of the statements above is true?

answer

statements a and b only

question

Figure 11-8 shows the optimal input combinations for the production of a given quantity of cotton in the United States and in China.

Refer to Figure 11-8. Which of the following could explain why the United States and China use different input combinations to produce a given quantity of cotton and yet, each country produces that quantity at the lowest possible cost?

answer

because the prices of inputs are not the same for the two countries: labor is relatively lower-priced and capital is relatively higher priced in China

question

Refer to Figure 11-4. Identify the curves in the diagram.

answer

E = marginal cost curve; F = average total cost curve; G = average variable cost curve; H = average fixed cost curve.

question

Refer to Figure 11-4. The vertical difference between curves F and G measures

answer

average fixed costs

question

If, when a firm doubles all its inputs, its average cost of production decreases, then production displays

answer

economics of scale

question

The total cost of a firm is $50, the average variable cost is $2, and the average fixed cost is $3. How may units of the output does the firm produce?

answer

10 units

question

When the marginal cost curve lies below the average cost curve, ________.

answer

the average cost curve slopes upward

1 of 45

question

If a consumer purchases any combination of goods and services on his ________, he will exhaust his income completely.

answer

budget constraint

question

answer

$102

question

answer

40... (where he is only spending money on TABLES and 0 dollars on chairs. at the x-axis in this example)

question

answer

8... (where he is only spending money on CHAIRS and 0 dollars on tables. at the y-axis in this example)

question

The following figure displays John's budget constraint when he spends his income on tables and chairs.

Refer to the figure above. If the price of a table is $2, what is John's income?

answer

$80

question

The following figure illustrates the budget constraint of a consumer of jeans and sweaters.

Refer to the figure above. A change in the budget constraint from B1 to B2 indicates:

answer

a decrease in the price of sweaters

question

The following figure illustrates the budget constraint of a consumer of jeans and sweaters.

Refer to the figure above. A change in the budget constraint from B2 to B3 indicates:

answer

an increase in the consumers income

question

The following figure shows the market demand curve for calculators. Refer to the figure above. What is the market-wide consumer surplus when the market price of calculators is $6?

answer

$50

question

The following figure shows the market demand curve for calculators. Refer to the figure above. What is the market-wide consumer surplus when the market price of calculators is $3?

answer

$1,000

question

________ in economics is a measure of satisfaction or happiness that comes from consuming a good or service.

answer

Utility

question

answer

20 shirts and 15 trousers

question

answer

bundle c

question

Manuri has $300 to spend on Pilates classes and Yoga classes. The price of a group Pilates class is $20 and the price of a group Yoga class is $10. Manuri's optimal bundle is given by "A" in Figure 9-6.

Refer to Figure 10-6. Suppose the price of Pilates sessions rise to $30 while income and the price of Yoga sessions remain unchanged. The substitution effect of this price change is represented by the movement from

answer

A to D

question

answer

6 units of utility

question

Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.

Refer to Table 10-2. If Keira maximizes her utility, how many units of each good should she buy?

answer

3 cups of Soup and 4 Sandwhiches

question

Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.

Refer to Table 10-2. Suppose Keira's income increases from $18 to $23 but prices have not changed. What is her utility maximizing bundle now?

answer

4 cups of Soup and 5 Sandwhiches

question

A characteristic of the long run is

answer

all inputs can be varied

question

Which of the following is the best example of a short run adjustment?

answer

Your local Walmart has two more associates

question

answer

fixed cost and total cost, but not variable cost

question

The marginal product of labor is defined as

answer

the additional output that results when one more worker is hired, holding all other resources constant.

question

The law of diminishing marginal returns states

answer

that at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline.

question

If diminishing marginal returns have already set in for Golden Lark Woodworks, and the marginal product of the 6th carpenter is 8 chairs, then the marginal product of the 7th carpenter is

answer

less than 8 chairs

question

Refer to Figure 11-1. The marginal product of the 3rd worker is

answer

question

Refer to Figure 11-1. The marginal product of the 7th worker is

answer

-2

question

Refer to Figure 11-1. The marginal product of the 4th worker is

answer

question

Refer to Figure 11-2. The curve labeled "E" is

answer

the marginal product curve

question

Refer to Figure 11-2. The curve labeled "F" is

answer

the average product curve

question

Refer to Figure 11-2. Diminishing returns to labor set in

answer

after L1

question

Refer to Figure 11-2. Short run output is maximized at

answer

question

Marginal cost is equal to the

answer

change in total cost divided by change in output

question

Average fixed costs of production

answer

fall as long as output is increased

question

Which of the following equations is correct?

answer

AFC + AVC = ATC

question

When the average total cost is $16 and the total cost is $800, then the number of units the firm is producing is

answer

question

Average variable cost can be calculated using any of the formulas below except

answer

Delta(TC-FC)DeltaQ

question

Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.

Refer to Table 11-3. What is the variable cost of production when the firm produces 115 lanterns?

answer

$1,157

question

Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.

Refer to Table 11-3. What is the average total cost of production when the firm produces 120 lanterns?

answer

$14

question

Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.

Refer to Table 11-3. What is the average variable cost per unit of production when the firm produces 90 lanterns?

answer

$5.44

question

Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights.

Refer to Table 11-3. What is the marginal cost per unit of production when the firm produces 100 lanterns?

answer

$32

question

answer

statements a and b only

question

answer

because the prices of inputs are not the same for the two countries: labor is relatively lower-priced and capital is relatively higher priced in China

question

Refer to Figure 11-4. Identify the curves in the diagram.

answer

E = marginal cost curve; F = average total cost curve; G = average variable cost curve; H = average fixed cost curve.

question

Refer to Figure 11-4. The vertical difference between curves F and G measures

answer

average fixed costs

question

If, when a firm doubles all its inputs, its average cost of production decreases, then production displays

answer

economics of scale

question

The total cost of a firm is $50, the average variable cost is $2, and the average fixed cost is $3. How may units of the output does the firm produce?

answer

10 units

question

When the marginal cost curve lies below the average cost curve, ________.

answer

the average cost curve slopes upward

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MicroEconomics Feng Test 2

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