Ch. 6,7,9,10 Micro economics

Figure: The Marginal Cost Curve (Figure: The Marginal Cost Curve) Look at the figure The Marginal Cost Curve. The total cost of mowing four lawns is approximately: $100. $50. $10. $15.

$50

(Figure: The Market for Productivity Apps) Look at the figure The Market for Productivity Apps. If the government imposes a tax of $1 in this market, consumers will pay _____ more per app and purchase _____ fewer apps. $1; 5 $0.50; 5 $0.50; 20 $1; 25

$0.50; 5

Suppose the government imposes a $10 per month tax on cell phone service. If the demand curve for cell phone service is perfectly inelastic and the supply curve is upward-sloping, the monthly price for cell phone service will increase by: $10. $0. $5. less than $10.

$10

(Figure: The Shrimp Market) Look at the figure The Shrimp Market. If the government wants to limit shrimp sales to 250 pounds, it can impose a _____ excise tax on sellers, and the total tax revenue generated will be _____. $10; $2,500 The answer cannot be determined from the information provided. $5; $2,500 $7.50; $7,500

$10; $2,500

Table: Marginal Cost of Sweatshirts) Look at the table Marginal Cost of Sweatshirts. The marginal cost of the second sweatshirt is: $29. $20. $9. $11.

$11

(Table: Marginal Cost of Sweatshirts) Look at the table Marginal Cost of Sweatshirts. The marginal cost of the fifth sweatshirt is: $11. $17. $13. $15.

$17

Figure: The Marginal Cost Curve) Look at the figure The Marginal Cost Curve. The total cost of mowing four lawns is approximately: $15. $50. $10. $100.

$50

(Scenario: Betty's Cookie Shop) Use Scenario: Betty's Cookie Shop. Betty's implicit and explicit costs are equal to:Scenario: Betty's Cookie ShopBetty runs a cookie shop where she sells cookies for $1 each. She employs five people, each of whom worked a total of 500 hours last year; she paid them $10 per hour. Her costs of equipment and raw materials add up to $75,000. Her business ability is legendary, and other companies have offered to pay Betty $100,000 to come to work for them. She also knows she could sell her cookie shop for $150,000. The bank in town pays an annual interest rate of 3% on all funds deposited with it. $184,500. $204,500. $80,000. $100,000.

$204,500

When the price of chocolate-covered peanuts decreases from $1.10 to $0.95, the quantity demanded increases from 190 bags to 215 bags. If the price is $1.10, total revenue is _____, and if the price is $0.95, total revenue is _____. $209; $204.25 $180.50; $209 $209; $236.50 $236.50; $209

$209; $204.25

(Table: TC's Pizza Parlor) Use Table: TC's Pizza Parlor. Assume that the marginal benefit is constant in intervals of production. Suppose five slices of pizza are being produced. What is the marginal benefit of producing one more slice of pizza? $2 $3 $55 $15

$3

Scenario: Accounting and Economic Profit Rather than put the $100,000 that his grandmother left him in a mutual fund that earns 5% each year, Tommy Wang quit his job, which paid $60,000 per year, and started Wang's Wicker Furniture Store. He rented a showroom for $20,000 for the year, purchased $60,000 in wicker furniture, and incurred costs of $40,000 for sales help and advertising. Instead of using the capital for his own business, he could rent it to a rival firm and earn $5,000 a year. In his first year, his revenue was $150,000. Reference: Ref 9-1 (Scenario: Accounting and Economic Profit) Look at the scenario Accounting and Economic Profit. The accounting profit of Wang's Wicker Furniture Store is: $200,000. $30,000. $60,000. $0.

$30,000

Nancy is consuming her optimal consumption bundle of burritos and margaritas. The marginal utility of her last burrito was 75 utils, and each burrito costs $3. Her marginal utility of her last margarita was 100 utils. What is the price of a margarita? $2 $4 $3 $1

$4

After earning your BA, you have to decide whether to take a job that will pay you $45,000 per year or spend an additional two years earning an MBA. If you decide to pursue the graduate degree, your annual expenses for tuition, books, board, and lodging will be $32,000. You have been offered a scholarship for $10,000 per year, but to pay the remaining $22,000 per year, you would have to cash in savings bonds from your grandparents that have been earning $500 in interest per year. The annual opportunity cost of earning your MBA is: $77,000. $67,500. $77,500. $99,000.

$67500

(Figure and Table: The Market for Taxi Rides) Look at the figure and table The Market for Taxi Rides. If the government imposes an excise tax of $1 per ride (causing the supply curve to shift upward by that amount), then the government will collect tax revenues of _____. However, the tax will cause a _____ deadweight loss to society. $50 million; $0.5 million $16 million; $1 million $9 million; $0.5 million $45 million; $1 million

$9 million; $0.5 million

The price of gasoline rises 5% and the quantity of gasoline purchased falls 1%. The price elasticity of demand is equal to _____, and demand is described as _____. 5; inelastic 0.2; elastic 0.2; inelastic

0.2; inelastic

(Table: Market for Pizza) Look at the table Market for Pizza and use the midpoint method. The price elasticity of demand for pizza between $14 and $12 per pizza when income is $1,000 per month is: 0.6. 1. 1.6. 2.

1

Suppose at $10 the quantity demanded is 100. When the price falls to $8, the quantity demanded increases to 130. The price elasticity of demand between $10 and $8, by the midpoint method, is approximately: 0.85. 1.00. 1.17. 1.50.

1.17

Faruq spends all of his income on tacos and milkshakes. His income is $100, the price of tacos is $10, and the price of milkshakes is $2. Put tacos on the horizontal axis and milkshakes on the vertical axis. The horizontal intercept for Faruq's budget line is _____ tacos. 100 10 5 50

10

(Table: Marginal Analysis of Sweatshirt Production I) Use Table: Marginal Analysis of Sweatshirt Production I. The profit at the optimal quantity of sweatshirts is: $70. $12. $8. $45.

12

(Table: Marginal Benefit of Sweatshirts) Use Table: Marginal Benefit of Sweatshirts. The marginal benefit of producing the third sweatshirt is: $16. $31. $14. $15.

14 Quantity 1-16 2-31 3-45

Reference: Ref 10-1 (Table: The Utility of Pecan Rolls) Look at the table The Utility of Pecan Rolls. The marginal utility for the second roll is: 5. 10. 15. 35.

15

(Table: TC's Pizza Parlor) Use Table: TC's Pizza Parlor. What is the optimal level of production? 5 slices 15 slices 10 slices 20 slices

15 slices

Figure: The Marginal Benefit Curve (Figure: The Marginal Benefit Curve) Look at the figure The Marginal Benefit Curve. The total benefit of mowing six lawns is approximately $200. $154. $19. $35

154

Figure: The Market for Hamburgers) Look at the figure The Market for Hamburgers. If the market is originally in equilibrium and the government imposes an excise tax of $0.80 per unit of the good sold, consumer surplus will be reduced by: $105. $240. $90. $175.

175

(Table: Price Elasticity) Look at the table Price Elasticity. What is the price elasticity of demand (using the midpoint formula) between $2.50 and $2.25? 19 0.5 119 9

19

(Table: Marginal Cost of Sweatshirts) Use Table: Marginal Cost of Sweatshirts. The marginal cost of the second sweatshirt is: $11. $9. $29. $20

2- was 20 the first quantity of shirt was 9 subtract to get 11

Assume that the marginal utilities for the first three units of a good consumed are 200, 150, and 125, respectively. The total utility for the first unit is: 125. 200. 150. 350.

200

(Table: Utility from Oranges and Star Fruit) Look at the table Utility from Oranges and Star Fruit. Oranges cost $2 per pound and star fruit costs $5 per pound. Calvin has $26 to spend. If Calvin buys 4 pounds of star fruit and 3 pounds of oranges, how much is his total utility? 364 72 180 280

280

(Table: Marginal Utility per Dollar of M&Ms) Look at the table Marginal Utility per Dollar of M&Ms. The price of M&Ms is $2 per bag. The marginal utility per dollar of the first bag of M&Ms is: 3. 2. 6. 12.

3

Assume that Billy gets no utility from saving. His total income is $240 and that the two goods he must choose across are cream ($50 per gallon) and butter ($30 per gallon): Creams TU of Cream Butter TU of Butter 1 250 1 180 2 450 2 330 3 600 3 450 4 700 4 540 5 750 5 600 6 750 6 630 7 700 7 630 8 600 8 600 What is Billy's best mix of the two goods? 1 cream, 5 butters 6 creams, 7 butters 2 creams, 4 butters 3 creams, 3 butters

3 creams, 3 butters

(Table: Marginal and Total Benefit) Look at the table Marginal and Total Benefit. Sed is deciding how many football games he wants to attend this year. His marginal benefit from increasing the number of games that he attends from two to three is: 40. 20. 10. 30. (Same Image as above) (Table: Marginal and Total Benefit) Look at the table Marginal and Total Benefit. Sed is deciding how many football games he wants to attend this year. If tickets to each football game cost $10, then he should attend _____ game(s). 2 5 0

30; 5

(Table: Utility from Oranges and Star Fruit) Look at the table Utility from Oranges and Star Fruit. Oranges cost $2 per pound and star fruit costs $5 per pound. The table shows Calvin's total utility from eating various amounts of oranges and star fruits. If Calvin has $26, he should eat _____ oranges and _____ pounds of star fruit, and he will have _____ left over. no; 5; $1 left over 3; 4; no money 8; 2; no money 4; 5; no money

3; 4; no money

Faruq spends all of his income on tacos and milkshakes. His income is $100, the price of tacos is $10, and the price of milkshakes is $2. Put tacos on the horizontal axis and milkshakes on the vertical axis. If Faruq spends all of his income, the opportunity cost of one taco equals _____ milkshakes. 5 10 2 1/5

5

Scenario: Accounting and Economic Profit Rather than put the $100,000 that his grandmother left him in a mutual fund that earns 5% each year, Tommy Wang quit his job, which paid $60,000 per year, and started Wang's Wicker Furniture Store. He rented a showroom for $20,000 for the year, purchased $60,000 in wicker furniture, and incurred costs of $40,000 for sales help and advertising. Instead of using the capital for his own business, he could rent it to a rival firm and earn $5,000 a year. In his first year, his revenue was $150,000. Reference: Ref 9-1 (Scenario: Accounting and Economic Profit) Look at the scenario Accounting and Economic Profit. The implicit cost of capital for Wang's Wicker Furniture Store is: $50,000. $5,000. $2,000. $0.

5000

(Figure: Budget Lines for Oranges and Apples) Look at the figure Budget Lines for Oranges and Apples. For some time, Antonio has had $5 per month to spend on oranges and apples. The price of an orange is $0.50 and the price of an apple is $0.25. Which of the charts shows what will happen to his budget line if his income increases to $6? D B C A

A

(Figure: A Market with a Tax) Use Figure: A Market with a Tax. The deadweight loss arising from the imposition of this tax is equal to the areas: D + E. B + D B + C. C + F.

C+F which is the middle triangle dashes

The percentage change in quantity demanded of one good or service divided by the percentage change in the price of a related good or service is the _____ of demand. income elasticity quantity elasticity cross-price elasticity price elasticity

Cross-price elasticity

4. Figure: Estimating Price Elasticity Reference: Ref 6-5 (Figure: Estimating Price Elasticity) Look at the figure Estimating Price Elasticity. Between the two prices, P1 and P2, which demand curve has the lowest price elasticity? D4 (straight up/down) D2 D3 D1

D4 (straight up/down)

Diego spends all of his income on milkshakes and french fries. At his current consumption levels the marginal utility of one milkshake and the marginal utility of one order of french fries are equal. According to the optimal consumption rule: Diego is maximizing his utility. Diego should buy more milkshakes and fewer fries if a milkshake costs more than an order of fries. Diego is maximizing his utility only if one milkshake and one order of french fries have the same price. Diego will maximize his utility by specializing in consumption and buying either milkshakes or fries but not both.

Diego is maximizing his utility only if one milkshake and one order of french fries have the same price.

Which of the following is an "either-or" decision? Allen must decide how many courses to take this semester. Dylan must decide whether to major in economics or finance. Chris must decide how many hours to work each week at his part-time job. Sally must decide how many hours to spend studying for each of the four courses that she is taking this semester.

Dylan must decide whether to major in economics or finance.

The price elasticity of demand for gasoline in the short run has been estimated to be 0.4. If a war in the Middle East causes the price of oil (from which gasoline is made) to increase, how will that affect total revenue from gasoline in the short run, all other things unchanged? Quantity demanded will not change; total revenue will rise. Quantity demanded will stay the same; total revenue will fall. Quantity demanded will decrease; total revenue will rise.

Quantity demanded will decrease; total revenue will rise.

Which of the following is a "how much" decision? Andy is trying to decide whether to take a prep course for the Law School Admissions Test. Tim is trying to decide the amount of money to save each month to buy a new car next year. Mary is trying to decide whether to go to work or go to college after she graduates from high school next month. Andrea is trying to decide whether to go to graduate school in economics or go to law school.

Tim is trying to decide the amount of money to save each month to buy a new car next year.

Which statement describes a "how much" decision? Tim is trying to decide the amount of money to save each month to buy a new car next year. Andy is trying to decide whether to take a prep course for the Law School Admissions Test. Andrea is trying to decide whether to go to graduate school in economics or go to law school. Mary is trying to decide whether to go to work or go to college after she graduates from high school next month.

Tim is trying to decide the amount of money to save each month to buy a new car next year.

Profit is the difference between _____ and _____. marginal costs; marginal revenues total sales; total revenues total profits; total costs total revenues; total costs

Total revenues; total costs

Which of the following statements is TRUE? In consumer choice theory, we assume all goods and services are inferior. A budget constraint limits what a poor consumer can spend, but there is no similar constraint on rich people. The slope of the budget constraint depends on how much of each good is consumed. Utility maximization requires seeking the most utility from a given budget.

Utility maximization requires seeking the most utility from a given budget.

A perfectly price-inelastic demand curve is: downward-sloping. horizontal. upward-sloping. Vertical

Vertical

If the estimated price elasticity of demand for foreign travel is 4: a 10% increase in the price of foreign travel will increase quantity demanded by 40%. a 20% decrease in the price of foreign travel will increase quantity demanded by 80%. the demand for foreign travel is inelastic. a 20% increase in the price of foreign travel will increase quantity demanded by 80%.

a 20% decrease in the price of foreign travel will increase quantity demanded by 80%.

(Figure: The Market for SUVs) Use Figure: The Market for SUVs. If the government imposes a $60,000 tax on SUVs and collects it from the consumers, the _____ curve will shift _____ by _____. supply; upward; $60,000 demand; downward; $30,000 supply; upward; $30,000 demand; downward; $60,000

demand:downward $60,000

Use of the midpoint method to calculate the price elasticity of demand eliminates the problem of computing: different elasticities, because price and quantity are inversely related on the demand curve. total revenue when price falls and demand is elastic. different elasticities, depending on whether price decreases or increases. total revenue when price falls and demand is inelastic.

different elasticities, depending on whether price decreases or increases.

If demand is inelastic, then deadweight loss will: decrease if demand becomes more elastic. be maximized if supply is also inelastic. increase if supply becomes more inelastic. be minimized if supply is also inelastic.

be minimized if supply is also inelastic

If a good is a necessity with few substitutes, then demand will tend to: be the same as that of a luxury good. have price elasticity equal to 1. be more price-elastic. be more price-inelastic.

be more price-inelastic.

A linear demand curve has

both elastic and inelastic price elasticities of demand.

If demand and supply are both very inelastic, a decrease in the rate of an excise tax will likely: increase government revenue. not affect government revenue. decrease government revenue. make demand and supply both elastic.

decrease government revenue

As George ate pizza during one recent outing, he found that he enjoyed each additional slice less and less. This implies that his marginal benefit was: increasing. decreasing. constant. vertical.

decreasing

If an excise tax is imposed on automobiles and collected from consumers, the: demand curve will shift downward by the amount of the tax. equilibrium quantity supplied will increase relative to the pretax level . supply curve will shift upward by the amount of the tax. equilibrium quantity demanded will increase relative to the pretax level.

demand curve will shift downward by the amount of the tax.

A men's tie store sold an average of 30 ties per day at $5 per tie but sold 50 of the same ties per day at $3 per tie. The price elasticity of demand, by the midpoint method, is: greater than zero but less than 1. greater than 3. greater than 1 but less than 3. equal to 1.

equal to 1.

Reference: Ref 10-1 (Table: The Utility of Pecan Rolls) Look at the table The Utility of Pecan Rolls. Total utility is maximized at the _____ roll. second first sixth fourth

fourth

If the price of chocolate-covered peanuts decreases from $1.15 to $1.05 and the quantity demanded increases from 190 bags to 220 bags, then the price elasticity of demand (by the midpoint method) is: greater than 1. 2. 0.5. 1.

greater than 1

To maximize her grade in economics, Stacey should study until: her marginal benefit of studying begins to decrease. her marginal cost of studying begins to increase. her marginal cost of studying reaches zero. her marginal benefit of studying equals her marginal cost of studying.

her marginal benefit of studying equals her marginal cost of studying.

(Scenario: Betty's Cookie Shop) Use Scenario: Betty's Cookie Shop. Betty is trying to decide at what point she should stop selling cookies, and she knows she cannot change the price of a cookie. She should stop selling cookies if her:Scenario: Betty's Cookie ShopBetty runs a cookie shop where she sells cookies for $1 each. She employs five people, each of whom worked a total of 500 hours last year; she paid them $10 per hour. Her costs of equipment and raw materials add up to $75,000. Her business ability is legendary, and other companies have offered to pay Betty $100,000 to come to work for them. She also knows she could sell her cookie shop for $150,000. The bank in town pays an annual interest rate of 3% on all funds deposited with it. implicit costs are greater than her accounting profits. economic profit is equal to her accounting profit. explicit and implicit costs are less than her revenues. economic profit is positive.

implicit costs are greater than her accounting profits

The income elasticity of demand for eggs has been estimated to be 0.57. If income grows by 5% in a period, all other things unchanged, demand will: increase by more than 5.7%. increase by about 2.9%. decrease by more than 5.7%. decrease by less than 5.7%.

increase by about 2.9%.

Suppose the government levies a $4 per month excise tax on cable TV. If the demand for cable TV is relatively (but not perfectly) inelastic and the supply curve is relatively (but not perfectly) elastic, then the price of cable TV will: increase by less than $4. increase by exactly $4. remain constant. increase by more than $4

increase by less than $4.

Assuming a normal upward-sloping supply curve and downward-sloping demand curve, if the government imposes a $5 excise tax on leather shoes and collects the tax from the suppliers, the price of leather shoes will: increase by less than $5. increase, but we cannot determine by how much. increase by more than $5. increase by $5.

increase by less than $5

(Table: Marginal Cost of Sweatshirts) Look at the table Marginal Cost of Sweatshirts. The marginal cost of producing sweatshirts is an example of ______ marginal costs. decreasing random increasing constant

increasing

(Table: Marginal Cost of Sweatshirts) Look at the table Marginal Cost of Sweatshirts. The marginal cost of producing sweatshirts is an example of ______ marginal costs. random constant decreasing increasing

increasing

Excise taxes that raise the most revenue and cause the least deadweight loss are likely to be levied on goods for which demand is _____ and supply is _____. inelastic; elastic elastic; elastic inelastic; inelastic elastic; inelastic

inelastic; inelastic

Economic profit is: greater than accounting profit if implicit costs exist. less than accounting profit if implicit costs are zero. less than accounting profit if implicit costs exist. always equal to accounting profit.

less than accounting profit if implicit costs exist.

(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of both goods is $1 per unit, that you consume four units of good X and two units of good Y, and that you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume _____ of X and _____ of Y. less; more less; less more; less more; more

less; more

The amount by which an additional unit of an activity increases total benefit is: marginal cost. utility. net benefit. marginal benefit.

marginal benefit

Assume that diminishing marginal utility applies to both coffee and football tickets and that the consumer is spending all of her income. If a consumer purchases a combination of coffee and football tickets such that MUCoffee / PCoffee = 20 and MUFootball tickets / PFootball tickets = 10, to maximize utility, the consumer should buy _____ coffee and _____ football tickets. less; more more; fewer more; more less; fewer

more; fewer

(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of both goods is $1 per unit, that you consume three units of good X and three units of good Y, and that you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume _____ of X and _____ of Y. more; more less; less more; less less; more

more; less

Xavier notices that the marginal utility of working with a tutor seems to fall with each hour the tutor helps him study. If Xavier keeps the tutor until his grade actually begins to fall, his marginal utility for the last hour of tutoring will be: zero. positive, but rising more slowly. negative. immeasurable.

negative

Scenario: Tom's Budget ConstraintTom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.Reference: Ref 10-6(Scenario: Tom's Budget Constraint) Read the scenario Tom's Budget Constraint. The combination _____ music downloads and _____ movies lies INSIDE Tom's budget line. (Tom can afford this combination, but he will not be spending the entire $50.) 100; 5 no; 5 50; no 50; 10

no; 5

If the government wants to minimize the deadweight loss from taxes, it should tax goods for which the: demand is high. price elasticity of demand is low. price elasticity of demand is high. price elasticity of supply is high.

price elasticity of demand is low.

Suppose the price elasticity of demand is relatively elastic and the price elasticity of supply is relatively inelastic in a specific market. If an excise tax is imposed on this good, who will bear the greater burden of the tax? consumers producers government both consumers and producers equally

producers

If the government imposes a $5 excise tax on leather shoes and the price of leather shoes increases by $2: the government will receive less tax revenue than anticipated. producers are paying more of the tax than are the consumers. consumers are paying more of the tax than the producers. the quantity of shoes sold will increase.

producers are paying more of the tax than are the consumers.

A tax that takes a higher percentage of income as income rises is: an ability tax. regressive. proportional. progressive.

progressive

If demand is elastic, the _____ effect dominates the _____ effect, and a(n) _____ in price will cause total revenue to rise. quantity; price; decrease price; quantity; decrease quantity; price; increase. price; quantity; increase

quantity; price; decrease

Brianna and Jess must pay an income tax. Both Brianna and Jess pay $1,000 in taxes each year, but Brianna earns $20,000 and Jess earns $10,000. From this information, you can infer that this tax is: progressive. equitable. proportional. regressive.

regressive

People are willing to buy insurance because of: risk aversion. bounded rationality. the status quo. the miscalculation of opportunity costs.

risk aversion

Utility is most closely related to: necessity. usefulness. requirement. satisfaction.

satisfaction

Now imagine the price of butter falls to $25 per gallon. Graphically, how has Billy's budget line changed? Shifted in along the butter's axis Shifted out along both axes Shifted in along the cream's axis Shifted out along the butter's axis

shifted out along the butter's axis

An excise tax that the government collects from the producers of a good has an effect similar to that of a tax subsidy. reduces revenue for the government. shifts the supply curve downward. shifts the supply curve upward. reduces revenue for the government. shifts the supply curve downward. shifts the supply curve upward.

shifts the supply curve upward

(Table: The Utility of Pecan Rolls) Look at the table The Utility of Pecan Rolls. Marginal utility becomes negative at the _____ roll. sixth second fifth first

sixth

If the marginal benefit received from consuming a good is less than the marginal cost of production: society's well-being can be improved if production decreases. the market is producing too little of the good. society's well-being cannot be improved by changing production. society's well-being can be improved if production increases.

society's well-being can be improved if production decreases.

If the marginal benefit received from consuming a good is equal to the marginal cost of production: society's well-being can be improved if production increases. the market is producing too much of the good. society's well-being can be improved if production decreases. society's well-being cannot be improved by changing production.

society's well-being cannot be improved by changing production.

Jenny believes that spending one hour studying for economics will increase her grade by 20 points. Studying for a second hour will increase her grade by 10 points. She also believes that studying for an hour for history will increase her grade by 15 points, but spending a second hour will increase her grade by only 5 points. Jenny has two hours to study. If Jenny wants to maximize her scores, what should she do? study 1 hour for economics and 1 hour for history study 1 hour for economics and not study for history not study for economics and study 2 hours for history study 2 hours for economics and not study for history

study 1 hour for economics and 1 hour for history

If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when the price of shirts increases from $8 to $12, for you, shoes and shirts are considered: inferior goods. substitute goods. complementary goods. luxury goods.

substitute goods

You own a small deli that sells sandwiches, salads, and soup. Which factor is an implicit cost of the business? your monthly utility bill wages paid to part-time employees the job offer you did not accept at a local catering service bread, meat, and vegetables used to produce the items on your menu

the job offer you did not accept at a local catering service

The optimal consumption rule for all goods requires: the marginal utility of all goods consumed to exceed the total utility of all goods. the marginal utility of all goods consumed divided by the price to be equal to the budget constraint. the prices of all goods to be equal. the marginal utility of all goods consumed divided by the respective price to be equal.

the marginal utility of all goods consumed divided by the respective price to be equal.

The deadweight loss from an excise tax comes about because: the number of transactions in the market is smaller than the no-tax equilibrium. the number of transactions in the market is reduced and some mutually beneficial transactions do not take place. a quota rent exists. some mutually beneficial transactions do not take place.

the number of transactions in the market is reduced and some mutually beneficial transactions do not take place.

The implicit cost of capital is: the expense associated with buying machines. the expense associated with leasing machines. irrelevant for determining economic profit. the opportunity cost of capital used by a business.

the opportunity cost of capital used by a business.

Total revenue is: the price of a good divided by the amount of the good sold. the price effect times the quantity effect. the price of a good times the quantity of the good that is sold. total sales less total cost.

the price of a good times the quantity of the good that is sold

. When the price goes down, the quantity demanded goes up. The price elasticity of demand measures: the responsiveness of the quantity change to the price change. how much the equilibrium price goes up. how much the price goes down. the responsiveness of the price change to an income change.

the responsiveness of the quantity change to the price change

Jacquelyn is a student at a major state university. Which of the following is NOT an explicit cost of her attending college? tuition the salary that she could have earned working full-time textbooks computer lab fees

the salary that she could have earned working full-time

(Table: Marginal Analysis of Sweatshirt Production I) Look at the table Marginal Analysis of Sweatshirt Production I. The optimal quantity of sweatshirts to produce is: four. five. three. two.

three

If marginal costs of production are greater than marginal benefits of production: not all costs are being considered. too much of the good is being produced. costs will eventually decrease. more of the good should be produced.

too much of the good is being produced

Tax incidence refers to: the deadweight loss from the tax. who really pays the tax. who writes the check to the government. the total revenue that the government collects from the tax.

who really pays the tax