Econ exam 2

Price Quantity Demanded 7 1 6 2 5 3 4 4 3 5 The marginal revenue obtained from selling the fourth unit of output is

$1

Suppose that a pure monopolist can sell 12 units of output at $12 per unit and 13 units at $11.50 per unit. The marginal revenue of the 13th unit of output is

$5.50

Refer to the demand and cost data for a pure monopolist given in the table. If the monopolist perfectly price-discriminated and sold each unit of the product at the maximum price the buyer of that unit would be willing to pay, and if the monopolist sold 4 units, then total revenue would be Output Price TotalCost 0 300 250 1 275 260 2 250 290 3 225 350 4 200 500 5 175 680

$950.

The first Pepsi yields Craig 12 units of utility and the second yields him an additional 15 units of utility. His total utility from three cans of Pepsi is 36 units of utility. The marginal utility of the third Pepsi is

9 units of utility

If the marginal utility from consuming the fourth unit of a product is 20 and the total utility from all four units is 126, then the total utility from consuming three units must be

106

If the total utility from consuming eight units of a product is 123 and the marginal utility of a ninth unit is 3, then the total utility from consuming nine units would be

126

Quantity of Total Cost. Produce Price Output 0 250 300 1 260 250 2 290 200 3 350 150 4 480 100 5 700 50 Based on the accompanying table, how many units would the given profit-maximizing nondiscriminating pure monopolist produce?

2

Quantity of Total Cost. Produce Price Output 0 250 500 1 260 300 2 290 250 3 350 200 4 480 150 5 700 100 If the profit-maximizing pure monopolist whose information is in the accompanying table is able to price discriminate, charging each customer the price associated with each given level of output, how many units will the firm produce?

4

what is the marginal utility of the fifth unit? # of units of commodity. total utility 3. 36 4 80 5 150 6 252 7 350 8 440

70

Mylie's total utility from singing the same song over and over is 80 utils after one repetition, 120 utils after two repetitions, 100 utils after three repetitions, 50 utils after four repetitions, -20 utils after five repetitions, and -170 utils after six repetitions, as shown in the table below. a. Write down her marginal utility for each repetition. b. Once Mylie's total utility begins to decrease, does each additional singing of the song hurt more than the previous song or less than the previous song?

a. b. more than the previous song

Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a normal profit. a. What is ATC per unit for each level of output listed in the table? Enter your answers in the table above. b. Is this a decreasing-cost industry? c. Suppose that the market price for a bottle of vitamins is $2.5. At that price the total market quantity demanded is 75,000,000 bottles. How many firms will be in this industry? d. Suppose that, instead, the market quantity demanded at a price of $2.5 is only 75,000. How many firms will be in this industry? e. Review your answers to parts b, c, and d. Does the level of demand determine this industry's market structure?

a. b. no c. 1000 d. 1 e. yes

Mylie's total utility from singing the same song over and over is 50 utils after one repetition, 90 utils after two repetitions, 70 utils after three repetitions, 20 utils after four repetitions, −50 utils after five repetitions, and −200 utils after six repetitions, as shown in the table below. a. Write down her marginal utility for each repetition. b. Once Mylie's total utility begins to decrease, does each additional singing of the song hurt more than the previous song or less than the previous song?

a. b.more than the previous song

Mrs. Simpson buys loaves of bread and quarts of milk each week at prices of $1 and 80 cents, respectively. At present she is buying these products in amounts such that the marginal utilities from the last units purchased of the two products are 80 and 70 utils, respectively. a. Is she buying the utility-maximizing combination of bread and milk? b. If not, how should she reallocate her expenditures between the two goods?

a. No, the marginal utility per cent spent on bread is 0.80 and the marginal utility per cent spent on milk is 0.875 b. She should buy more milk and less bread.

John likes Coca-Cola. After consuming one Coke, John has a total utility of 10 utils. After two Cokes, he has a total utility of 25 utils. After three Cokes, he has a total utility of 50 utils. a. Does John show diminishing marginal utility for Coke, or does he show increasing marginal utility for Coke? b. Suppose that John has $3 in his pocket. If Cokes cost $1 each and John is willing to spend one of his dollars on purchasing a first can of Coke, would he spend his second dollar on a Coke, too? c. What about the third dollar? d. If John's marginal utility for Coke keeps on increasing no matter how many Cokes he drinks, would it be fair to say that he is addicted to Coke?

a. increasing marginal utility b. yes c. yes d. yes

a. ''It is irrational for an individual to take the time to be completely rational in economic decision making. ''This statement recognizes that b."Telling your spouse the name of the restaurant where you would like to eat for your birthday makes sense in terms of utility maximization." This statement recognizes that

a. it would take a great deal of time to consider all the factors of every decision. b.the benefit of making the request will likely exceed the cost.

If MUa/Pa = 50/$4 = MUb/Pb = 80/? = MUc/Pc = 125/?, the prices of products B and C in consumer equilibrium

are $6.4 and $10, respectively.

Suppose you are consuming two goods, A and B. Your marginal utility from good A is 20 while your marginal utility from good B is 4. In addition, good A costs $10 each and good B costs $2 each. a. According to the utility-maximizing rule, you are

maximizing your total utility

Frank spends $75 on 10 magazines and 25 newspapers. The magazines cost $5 each and the newspapers cost $2.50 each. Suppose that his MU from the final magazine is 10 utils while his MU from the final newspaper is also 10 utils. According to the utility-maximizing rule, Frank should:

reallocate spending from magazines to newspapers.

Jermaine spends his money on cucumbers and lettuce. If the price of cucumbers falls, the MU per dollar of cucumbers will _______ and Jermaine will _______ cucumbers for lettuce.

rise; substitute

Suppose that Ms. Thomson is currently exhausting her money income by purchasing 10 units of A and 8 units of B at prices of $3 and $4, respectively. The marginal utility of the last units of A and B are 15 and 24, respectively. These data suggest that Ms. Thomson

should buy more B and less A

In the last decade or so, there has been a dramatic expansion of small retail convenience stores (such as 7-Eleven, Kwik Trip, and Circle K), although their prices are generally much higher than prices in large supermarkets. The success of these convenience stores can be partially explained by

the time consumers save when purchasing goods there.

Many apartment-complex owners are installing water meters for each apartment and billing the occupants according to the amount of water they use. This system contrasts with the former procedure of having a central meter for the entire complex and dividing up the collective water expense as part of the rent. Where individual meters have been installed, water usage has declined 10 to 40 percent. This decline in water usage

would be expected since people now have to pay according to the amount of water they use.