Microeconomics Exam chapters 6-8

The utility from a specific product is:

A measure of one's preference or taste for it

Which of the following is the best synonym for "marginal" in economics?

Additional

Refer to the above graph. There are diseconomies of scale:

After Q4

The graph above shows two indifference curves and QR and QS represent different budget lines. A change in the equilibrium position on the diagram from point 1 to point 2 could result, other things being equal, from:

An increase in the price of B

When a firm doubles its inputs and finds that its output has more than doubled, this is known as:

Economics of scale

"The bigger the volume, the lower the cost, and we pass these savings on to you" is a familiar slogan. Its idea is illustrated in which of the above graphs?

Graph A

Refer to the above graphs. Which graph shows a change in the price of X, but no changes in the price of Y and in the buyer's budget?

Graph B

The main difference between the short run and the long run is that:

In the short run, some inputs are fixed and some are variable

Refer to the above graphs. Minimum efficient scale occurs at:

Q2

Refer to the graph above. What could cause the consumer equilibrium point to shift from point a to point b?

The price of good 1 decreased

Utility

The satisfaction or pleasure one gets from consuming a good or service

The opportunity cost of doing or getting something is best and fully defined as:

The value of the best alternative that is given up in order to do or get something

Refer to the above table. Diminishing marginal returns set in with the addition of the:

Third unit of labor

Which situation is consistent with the law of diminishing marginal utility?

he more pizza Joe eats, the less he enjoys an additional slice

Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The economic profits of Harvey's firm in the first year were:

$160,000

Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The implicit costs of Harvey's firm in the first year were:

$60,000

Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The explicit costs of Harvey's firm in the first year were:

$605,000

Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The total revenues of Harvey's firm in the first year were:

$825,000

Refer to the above table. What is the marginal utility of the fourth unit?

44 (80-36=44)

In the graph above, a decrease in the price of good Y will result in:

A decrease in demand for good X

Refer to the above graph. The shift of the budget line from AB to CD is consistent with:

A decrease in the prices of both Goods 1 and 2

If a more efficient technology was discovered by a firm, there would be:

A downward shift in the MC curve

Variable costs are:

Costs that change with the level of production

Economic Profits are:

Equal to the difference between accounting profits and implicit costs

Cash expenditures a firm makes to pay for resources are called:

Explicit Costs

Fixed costs are those costs which are:

Independent of the rate of output

At point X on the graph above, which depicts a consumer's indifference curve for goods A and B and the relevant budget constraint line, we know that:

MUA/PA = MUB/PB

Many people do not steal or commit fraud because to them, the resulting feelings of guilt and uneasiness make the:

Marginal cost of the act increase

After eating four slices of pizza, you are offered a fifth slice for free. You turn down the fifth slice. Your refusal indicates that the:

Marginal utility is positive for the fourth slice and negative for the fifth slice

If total utility is increasing, then marginal utility:

May either be increasing or decreasing, but it must be greater than zero

If a consumer is initially in equilibrium, an increase in money income will:

Move the consumer to a new equilibrium on a higher indifference curve

Diseconomies of scale occur mainly because:

Of the inherent difficulties involved in managing and coordinating a large business enterprise

Which would be an implicit cost for a firm? The cost:

Of wages foregone by the owner of the firm

The reason why people are charged for an additional can of soda they get from a soda machine, but are not charged for an additional paper taken from a newspaper dispensing machine, is that the marginal utility of an additional:

Soda diminishes slowly, but the marginal utility of an additional paper is close to zero

To derive the demand curve of a product in indifference curve analysis, the:

Tastes and preferences of the consumer are assumed to be fixed

According to the law of diminishing marginal returns:

The additional output generated by additional units of an input will diminish

Marginal Utility

The additional satisfaction from consuming one more unit of a product

Refer to the above graph. If the firm is producing at Q1, the area 0ADQ1 represents:

Total costs

Refer to the above graph. If the firm is producing at Q1, the area BADE represents:

Total fixed costs

Which of the following statements is correct?

Total utility is the accumulation or summation of marginal utility