ECON

Brennan gets laid off from PetSmart and decreases his demand for boats. The resulting change in Brennan's quantity demanded will result in a(n) _____ in his marginal utility from the last boat consumed and a(n) _____ in his total utility.

increase, decrease

Suppose that for Dr. Doback's consumption bundle MUx/Px is greater than Muy/Py for the last unit of each good purchased. If Dr. Doback is currently spending all of his income, he could increase his total utility by _____ his consumption of good X and _____ his consumption of good Y.

increasing, decreasing

Firms find the profit-maximizing level of output where _____ is equal to _____.

marginal revenue, marginal cost

Which of the following will cause an increase in the long run cost curves? (Mark all that apply.) -an improvement in technology -an increase in the price of an input -an increase in taxes

-an increase in the price of an input -an increase in taxes

Dr. Stu's Dentistry is a firm earning normal profit. Which of the following statements about Dr. Stu's Dentistry is TRUE? (Mark all that apply.) -Accounting profit is equal to implicit cost -The firm is earning the same as it could in another industry -Economic profit is equal to implicit cost.

-Accounting profit is equal to implicit cost -The firm is earning the same as it could in another industry

Which of the following statements about fixed costs is FALSE? (Mark all that apply.) -Fixed costs fall to zero when output falls to zero. -Fixed costs do not change as output changes. -Fixed costs are usually associated with labor. -Fixed costs cannot be varied in the short run.

-Fixed costs fall to zero when output falls to zero -Fixed costs are usually associated with labor.

Which of the following statements about the Law of Diminishing Marginal Returns is TRUE? (Mark all that apply.) -LDMR only applies in the long run. -LDMR explains why the short run cost curves eventually decrease as output increases. -LDMR states that as successive units of a fixed resource are added to a variable resource, the marginal product of the fixed resource eventually increases -LDMR explains why the short run cost curves eventually increase as output increase

-LDMR explains why the short run cost curves eventually increase as output increases

Which of the following is NOT one of the properties of most indifference curves? (Mark all that apply.) -indifference curves are upward sloping -indifference curves are bowed inward -indifference curves farther from the origin represent a LOWER level of total utility -indifference curves farther from the origin represent a HIGHER level of total utility

-indifference curves are upward sloping -indifference curves farther from the origin represent a LOWER level of total utility

Diseconomies of scale occur when -long run average total cost increases as output increases -long run total cost decreases as output increases -long run total cost increases as output increases -long run average total cost decreases as output increases

-long run average total cost increases as output increases

Which of the following is a characteristic of perfect competition? (Mark all that apply.) -many small buyers and sellers -no barriers to entry -imperfect information -high barriers to entry -differentiated products -standaradized products

-many small buyers and sellers -no barriers to entry -standardized products

Dale considers pancakes and chocolate chips to be perfect complements. If the price of a pancake is $3, and the price of a package of chocolate chips is $5, and Dale has $80 to spend, his optimal bundle will contain how many units of chocolate chips?

10

Nancy has $200 to spend on goods X and Y. Good X has a price of $16 and good Y has a price of $4. If Nancy spends all of her income on a bundle that contains 5 units of good X, then the bundle must contain ___ units of good Y.

30

A firm in a perfectly competitive product market aces a market price of $24. If the firm faces marginal cost represented by the equation MC = 4 + 4q, then q* is ___ units.

5

Bundle Qx MUx Qy MUy A 2 800 100 200 B 4 600 56 300 C 6 400 24 400 D 8 200 8 800 Using the Relative Price Rule, find the optimal consumption bundle if the price of good X is $4 and the price of good Y is $16.

D