Microecon SLO

Assume a consumer purchases a combination of good X and Y such that MUx/Px = 20 and MUY/PY = 10. To maximize utility, the consumer should buy _________ of good X.

more

Suppose you calculate the income elasticity to be 2.65. Based on this calculation, this good is a(n) ___________ good

normal

If a firm's average fixed cost is $4 and its average variable cost is $2, then average total cost is _____.

$6

First cup of coffee - 10 Marginal Utility Second cup of coffee - 8 Marginal Utility Third cup of coffee - 5 Marginal Utility What is the total utility gained from consuming all three cups of coffee?

23

The market for milk is initially in equilibrium. If workers in the milk industry are successful in negotiating higher wages we would expect the equilibrium quantity to ______.

Decrease

After you graduate from college, you open a business selling computers. There are many other businesses in your city that sell similar computers so the number of substitutes is high. Based on this information, the price elasticity of demand for the computers that your business sells will be more __________.

Elastic

The market for milk is initially in equilibrium. If workers in the milk industry are successful in negotiating higher wages we would expect equilibrium prices to ______.

Increase

The market for milk is initially in equilibrium. Milk producers engage in a nationwide advertising campaign to encourage milk drinking. The campaign is successful so the demand for milk increases. Therefore, it can be concluded that the equilibrium price of milk will __________

Increase

The market for milk is initially in equilibrium. Milk producers engage in a nationwide advertising campaign to encourage milk drinking. The campaign is successful so the demand for milk increases. Therefore, it can be concluded that the equilibrium quantity of milk will __________.

Increase

Which of the following would be an example of a good whose price elasticity of demand is inelastic?

Insulin for diabetics

Firms in any market structure produce where ________

MR = MC

Generally speaking, as production of a good increases, the marginal cost (MC) curve intersects the average total cost curve (ATC) ________.

at ATC's minimum

Generally speaking, as production of a good increases, the marginal cost curve:

decreases and then increases

A monopoly has a demand curve that is _____.

downward sloping

One major difference between Perfect Competition and Monopoly is that monopolies produce ______ goods and charger a __________ price.

fewer, higher

Inputs that do not change in the short run as a firm increases output are known as _____

fixed inputs

Firms in perfect competition have a demand curve that is _____

horizontal

If a firm raises the price of the good it sells and experiences higher revenues, then this good's price elasticity of demand must be _____

inelastic

Assume a consumer purchases a combination of good X and Y such that MUx/Px = 20 and MUY/PY = 10. To maximize utility, the consumer should buy _________ of good Y

less

First cup of coffee - 10 Marginal Utility Second cup of coffee - 8 Marginal Utility Third cup of coffee - 5 Marginal Utility At which cup of coffee is diminishing marginal utility observed?

second cup