Eco2301 ttu exam3
A perfectly elastic demand curve has a slope of ______ while a perfectly inelastic demand curve has a slope of ______.
0; infinity
Refer to the accompanying figure. What is the price elasticity of supply at point A?
1
Refer to the accompanying figure. Total producer surplus in this market is:
125
The accompanying figure shows the annual demand for haircuts for one person in the town of Beaumont. There are a total of 300 residents in Beaumont, each with this same demand curve. If the residents of Beaumont purchase a total of 1,800 haircuts each year, then the market price for a haircut must be:
20
Laura's total utility from consuming 8, 9, and 10 bonbons is 35, 42, and 45, respectively. Her marginal utility from the 9th bonbon is _____.
7
When the price of a good rises, marginal utility per dollar spent on that good ______, leading consumers to purchase ______ of that good.
falls; less
Suppose that total expenditures for coffee reach a maximum at a price of $5 per pound. At this price, the demand for coffee is:
unit elastic
if the price elasticity of demand for a good equals one, then the demand for that good is:
unit elastic
Individual supply curves generally slope ______ because ______.
upward; of increasing opportunity cost
According to economists, the satisfaction people get from their consumption activities is called:
utility
Even when a firm produces the level of output at which price equals marginal cost, it should shut down if its total revenue is less than its:
variable cost
Higher education is a ______ and assigned textbooks are ______.
want; wants
For two goods, coffee and scones, suppose that MU(coffee)/P(coffee) = 4 and MU(scones)/P(scones) = 3. To maximize your total utility from these two goods, you should purchase:
more coffee and fewer scones
On a given linear demand curve, as price increases demand becomes:
more elastic
The price elasticity of supply for the Hope Diamond is zero because there is only one. Therefore, the supply curve for the Hope Diamond is
perfectly inelastic
The percentage change in quantity supplied that results from a 1 percent change in price is known as the:
price elasticity of the supply curve
The difference between the price a seller actually receives for a good and the seller's reservation price is:
producer surplus
Total revenue minus both explicit and implicit costs defines a firm's:
profit
Moe's reservation price for his economics textbook is $100. The week before the semester begins, Moe finds a copy of his textbook online for $75. Moe's consumer surplus from buying the textbook online is:
25
Refer to the accompanying figure. When this market is in equilibrium, total producer surplus in the market is ______ per day
250
The accompanying graph shows the cost curves for Moe's mushroom gathering business, which is perfectly competitive. In the graph above, the average variable cost curve is labeled _____, the average total cost curve is labeled _____, and the marginal cost curve is labeled ______.
C;B;A
A seller's supply curve shows the seller's:
Opportunity cost of producing an additional unit of output at each quantity.
Shelter for homeless people is an example of:
a need
The long run is best defined as:
a period of time sufficient long that all factors of production are variable
When calculating price elasticity of demand, if the percentage change in price is negative, then the percentage change in quantity demanded is typically:
positive
For two goods, A and B, the rational spending rule is expressed as:
(MUa/Pa)=(MUb/Pb)
The accompanying figure shows a single consumer's demand for ice cream at the student union. If there are 1,000 students on campus during a regular semester, and each student's weekly demand for ice cream is shown above, then when the student union charges $3.00 per scoop, those 1,000 students purchase a total of ______ scoops per week.
4000
A price-taker faces a demand curve that is:
Horizontal at the market price
If the cross-price elasticity of demand between blueberries and yogurt is negative, then the two goods are:
complements
if demand is ______ with respect to price, a price increase will ______ total revenue.
inelastic; increase
The tendency for consumers to purchase more of a good or service as its price falls is captured by the:
law of demand
If most consumer goods and services are ______, then most income elasticities are ______.
normal; positive
If the demand curve is horizontal, then demand is:
perfectly elastic
If the quantity demanded of a good is Q when the price for the good is P, the price elasticity of demand for that good at that point is:
(p/q)x(1/slope)
The accompanying graph depicts demand.The slope of the demand curve (ignoring the negative sign) is:
0.5
Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The accompanying table describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day. when the firm uses 9 employee-hours per day, its total variable cost each day is:
126
For a given seller, the accompanying figure shows the relationship between the number of units produced and the opportunity cost of producing an additional unit of output. If the market consists of 50 identical sellers, each with the same opportunity cost as the seller depicted in the figure, then how many units would be supplied in the market at a price of $14 per unit?
17,500
The accompanying table shows a pizzeria's fixed cost and variable cost at different levels of output. Pizzas sell for $20 each. When the pizzeria makes 25 pizzas a day, its average fixed cost is ______.
20
Refer to the accompanying figure. Suppose the dairy lobby convinces the government to impose price controls in this market. If the government requires cheese to be sold for a price of $8 per pound, total consumer surplus in the market would equal:
20 per day
if the price of cheese falls by 1 percent and the quantity demanded rises by 3 percent, then the price elasticity of demand for cheese is equal to:
3
If the price elasticity of demand for pineapples is 0.75, then a 4 percent increase in the price of pineapples will lead to a:
3 precent decrease in the quantity of pineapple demanded
Refer to the accompanying table. To increase output from 99 to 132 units requires ______ extra employees per day; to increase output from 132 to 165 units requires ______ extra employees per day.
3;4
The accompanying graph depicts demand.The price elasticity of demand at point A is:
5/2
Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The accompanying table describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day. This firm's fixed cost each day is:
50
The accompanying table shows a pizzeria's fixed cost and variable cost at different levels of output. Pizzas sell for $20 each. When the pizzeria makes 100 pizzas a day, its fixed cost is ______ and its total cost is ______.
500-1350
Refer to the accompanying figure. At a price of $2, the total expenditure on lattes each hour equals:
60
The accompanying figure shows the demand curve for a product that can be sold only in whole-number amounts.The accompanying figure shows the demand curve for a product that can be sold only in whole-number amounts.
75
Refer to the accompanying graph. If this firm is a price taker, then when the price of each unit of output is $30, this firm's profit-maximizing level of output is ______.
80
Refer to the accompanying figure. What is total consumer surplus at the market equilibrium?
80 per day
Refer to the accompanying graph. If this firm is a price taker, then when the price of each unit of output is $30, how much profit does this firm earn at its profit-maximizing level of output?
800
If two products are substitutes, then the:
cross-price elasticity of demand between them will be positive.
If the income elasticity for a particular good is negative, then:
as income increases, consumers will tend to purchase less of the good
Refer to the accompanying figure. At quantities less than 50 doughnuts per day:
average cost is declining because marginal cost is less than average cost
During Thanksgiving you participated in a pumpkin-pie eating contest. You really enjoyed the first two pies, the third one was okay, but as soon as you ate the fourth one you became ill and lost the contest. After the third pie, your total utility:
decreased
It is impossible for total utility to be ______ when marginal utility is ______.
decreasing; positive
If the price elasticity of demand for a good is greater than one, then the demand for that good is:
elastic
At the midpoint of a straight-line demand curve, the price elasticity of demand is:
equal to one
Refer to the accompanying table. Total utility ______ as additional apples are consumed, but marginal utility ______ with each additional apple consumed.
first increase then decreases; decreases
When Lorenzo eats 1 slice of pizza for lunch, his total utility is 23, and when he eats 2 slices of pizza for lunch, his total utility is 42. Assuming that Lorenzo's marginal utility from eating pizza is always positive, we can infer that his total utility from eating 3 slices of pizza at lunch is:
greater than 42 and less than 61
Purchasing goods such that the ratio of marginal utility to price is equal across all goods results in the:
greatest total utility
Which of the following is NOT true of a perfectly competitive firm?
it seeks to maximize revenue
During Thanksgiving you participated in a pumpkin-pie eating contest. You really enjoyed the first two pies, the third one was okay, but as soon as you ate the fourth one you became ill and lost the contest. You got ______ utility from eating the fourth pie than from eating the second pie.
less
Demand tends to be ______ in the short run than in the long run.
less elastic
Suppose two demand curves intersect and so have a point in common. At that point, demand shown by the steeper curve will be _______ the flatter curve.
less elastic than
If the demand for a good is highly elastic, that good is likely to have:
many close substitutes
In general, perfectly competitive firms maximize their profit by producing the level of output at which:
marginal cost equals price
If a production process exhibits diminishing returns, then as output rises:
marginal cost will eventually increase
When plotting marginal and average cost curves, the ______ cost curve always crosses the ______ cost curve at its ______.
marginal; average total; minimum
During Thanksgiving you participated in a pumpkin-pie eating contest. You really enjoyed the first two pies, the third one was okay, but as soon as you ate the fourth one you became ill and lost the contest. You got ______ utility from eating the first pie than from eating the third pie.
more
The price elasticity of demand for a good measures the responsiveness of:
quantity demanded to a 1 percent change in price of that good
An increase in consumers' demand for espresso will lead to an increase in ______, while an increase in the number of firms producing espresso will lead to a(n) ______.
quantity supplied; increase in supply
A decrease in the price a firm receives for its output will lead the firm to:
reduced output
The goal of utility maximization is to allocate your ______ in order to maximize your ______.
resources; satisfaction
The law of demand indicates that as the cost of an activity:
rises, less of the activity will occur
The tendency for marginal utility to decline as consumption increases beyond some point is called:
the law of diminishing marginal utility
The short run is best defined as:
the period of time sufficiently short that at least one factor of production os fixed.