TTU Econ 2301 exam 3

After subsistence levels of food, shelter, and clothing are provided economists refer to all other goods and services as:

wants

At his current level of consumption, Evan gets twice as much marginal utility from an additional bottle of water as that from an additional bottle of soda. If the price of soda is $1 per bottle, then Evan is maximizing utility if the price of a bottle of water is:

$2

assume that Dusty has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. At the original income of $30, if the price of a loaf of bread decreased to $1 and the price of peanut butter increased to $5, then Dusty could buy a maximum of _____ loaves of bread and and max of ____ jars of peanut butter

30;6

The tendency for consumers to purchase more of a good or service as its price falls is captured by the:

law of demand

as price increases, firms in a perfectly competitive market find that it is:

beneficial to produce more units of output

suppose a perfectly competitive firm is producing 77 units of output, and the marginal cost of the 77th unit is 11. If the firm can sell each unit of output for $8 and the firm's revenue is sufficient to cover its variable cost, the firm should:

decrease production

during Thanksgiving you participated in a pumpkin pie eating contest. You really enjoyed the first two pies, then 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

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 his marginal utility is always positive, we can infer that his total utility from eating 3 slices is:

greater than 42 and less than 61

According to the law of diminishing returns, when some factors of production are fixed, in order to increase production by a given amount, a firm will eventually need to add successively:

larger and larger quantities of the variable factors of production

during Thanksgiving you participated in a pumpkin pie eating contest. You really enjoyed the first two pies, then 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

On the fifth day of Sven's vacation, Sven went blueberry picking all day. On the fifth day of Sven's vacation, he had decided that another hour of skiing would yield:

less utility than blueberry picking

growing rice requires extensive irrigation in California. Economists consider water to be a ___________ for rice farmers in California

need

Pat's total utility after eating 99 peanut butter cups was greater than his total utility after eating 100 cups. Therefore, Pat's marginal utility from the 100th butter cup was:

negative

Alex wants to maximize his utility. At his current level of consumption, Alex's marginal utility from an additional cup of coffee is 15 utils, and his marginal utility from an additional can of soda is 11 utils. If the price of a cup of coffee is $3 and the price of a can of soda $2, Alex should:

reallocate his spending away from coffee and towards soda

if a perfectly competitive firm produces an output level at which price is less than marginal costs, then the firm should:

reduce output to earn greater profits or smaller losses

taking a limousine to a five star restaurant in New York is a:

want to both Joe Average and Richie Rich