1) Suppose that Homer derives 45 utils of total utility from eating 4 donuts and 55 utils of total utility from eating 5 donuts. What is Homer's marginal utility from eating the 5th donut?
A) 10
B) 45
C) 55
D) 100
2) Marginal utility is measured as
A) utility per unit of production.
B) extra output divided by extra utility.
C) output of a good or service divided by price.
D) extra utility from each additional good consumed.
3) If total utility is decreasing, then marginal utility is
A) negative.
B) positive.
C) zero.
D) increasing.
4) The total utility from consuming 8 units of a good is 155. The marginal utility of the 8th unit is 7 and the marginal utility of the 7th unit is 11. The total utility from consuming 6 units of the good is
A) 173.
B) 144.
C) 137.
D) 130.
5) A well-known athlete loves cupcakes. He receives 200 utils for the first cupcake, an additional 160 for the second, an additional 120 for the third, another 80 for the fourth, and another 40 for the fifth.
The marginal utility of the fourth cupcake is ________ and the total utility of consuming four cupcakes is ________.
A) 40; 80
B) 80; 600
C) 80; 560
D) 40; 402
6) Using the above table, what is the total utility of the third piece of pizza?
A) 75 utils
B) 0 utils
C) 25 utils
D) -25 utils
7) For good A and good B, the consumer maximizes personal satisfaction when
A) MUA/PA = PB/MUB.
B) PA/MUA = PB/MUB.
C) MUA/PA = MUB/PB.
D) MUA/MUB = PA/PB.
8) The price of good "a" is $5 and the price of good "b" is $15. If the marginal utility of good "a" is 20 then the marginal utility of good "b" must be ________ to have an optimum combination of goods purchased.
A) 4
B) 20
C) 60
D) 80
9) When the marginal utility per dollar of good x exceeds the marginal utility per dollar of good y,
A) the consumer should consume more of good x.
B) the consumer is consuming too much of good x.
C) good y must have a negative marginal utility.
D) the consumer is in an optimal situation if the price of good x exceeds the price of good y.
10) If a consumer is initially at an optimum, and then the price of Y falls, then
A) MUX/ PX < MUY / PY.
B) MUX / PX > MUY / PY.
C) MUX / PX = MUY / PY.
D) MUX / MUY > PY / PX.
11) An indifference curve provides the set of consumption alternatives that
A) yield the same total amount of satisfaction.
B) maximize the utility of the consumer.
C) can be purchased for the same amount of money.
D) yield the same marginal utility for the last unit consumed of each good.
12) A curve where every combination of the two goods being considered yields the same level of satisfaction is known as
A) a marginal utility curve.
B) a total utility curve.
C) an indifference curve.
D) a budget constraint.3
13) In a map showing three indifference curves a consumer is most well off on
A) the curve which is closest to the origin of the coordinate axes.
B) the curve which is most farther away from the coordinate axes.
C) The curve that is in the middle.
D) none of the above
14) An indifference map shows
A) that money income is constant, but product prices may change.
B) that utility is at a maximum at the origin.
C) that curves closer to the origin represent higher levels of utility.
D) that curves further from the origin represent higher levels of utility.
15) Refer to the above figure. Which point represents the highest level of utility?
A) Point A
B) Point B
C) Point C
D) Point D
16) Refer to the above figure. Which point(s) represents the lowest level of utility?
A) Points A & C
B) Point B
C) Point C only
D) Point D
17) The possible combinations of goods that can be purchased with a specific income are called the
A) budget constraint.
B) indifference map.
C) marginal rate of substitution.
D) income-consumption curve.4
18) Suppose that the quantity of good y is measured along the vertical axis and that the quantity of good x is measured along the horizontal axis. If the price of good x is $5 and the price of good y is $10 when income is $200 per time period, the slope of the consumer's budget constraint will be
A) -0.5.
B) -2.
C) -5.
D) -10.
19) Using the above figure, we can conclude that
A) the consumer will purchase goods at combination M.
B) the consumer is indifferent between J and M.
C) K is the optimal combination of goods.
D) L is preferred to K.
20) In the above figure, if the budget line is the line DF, the consumer will maximize utility at point
A) A.
B) B.
C) C.
D) G.5
21) Suppose that one worker can produce 15 cookies, two workers can produce 35 cookies together, and three workers can produce 65 cookies together. What is the marginal product of the 2nd worker?
A) 15 cookies
B) 20 cookies
C) 30 cookies
D) 35 cookies
22) Changes in production functions are associated with changes in
A) the level of output.
B) demand.
C) the levels of costs.
D) technology.
23) When El Torito Restaurant is deciding how many waiters to hire for a holiday weekend, it is making a ________ decision.
A) plant-size
B) long-run
C) short-run
D) fixed-input
24) In the long run, a firm can change
A) nothing.
B) only one input, such as plant size.
C) all inputs.
D) None of the above are correct.
25) If marginal product is negative, then
A) total product is rising.
B) total product is falling.
C) marginal cost is falling.
D) average profit is rising.
26) Marginal physical product of the first worker is 100, 120 for the second, 80 for the third, 30 for the fourth, 5 for the fifth, 3 for the sixth, 2 for the seventh, 1 for the eighth, and 0 for the ninth. What is total product for the fifth worker and the ninth worker respectively?
A) 335; 341
B) 335; 0
C) 5; 0
D) 0; 56
27) In the above table, average physical product is 30 snowboards when
A) 4 workers are employed.
B) 3 workers are employed.
C) 2 workers are employed.
D) 1 worker is employed.
28) In the above table, how many workers are employed when marginal product reaches its maximum?
A) 1
B) 2
C) 3
D) 4
29) Any activity that results in the conversion of resources into products that can be used in consumption is
A) planning.
B) investment.
C) production.
D) discounting.
30) The relationship Q = f(K, L) is an example of a
A) cost function.
B) production function.
C) demand equation.
D) profit equation.7
31) Using the above table, the total product and average physical product when 3 workers are employed are
A) 36 and 12, respectively.
B) 39 and 13, respectively.
C) 37 and 27, respectively.
D) 40 and 10, respectively.
32) Using the above table, the total product and average physical product when 5 workers are employed are
A) 61 and 21, respectively.
B) 62 and 13, respectively.
C) 62 and 15, respectively.
D) 61 and 12.2, respectively.
33) Using the above table, the average physical product and marginal physical w hen 4 workers are employed are
A) 13 and 13, respectively.
B) 13 and 14, respectively.
C) 13 and 9, respectively.
D) 14 and 13, respectively.
34) Refer to the above figure. The curve reflects
A) the law of diminishing marginal product in labor.
B) the law of increasing marginal product in labor.
C) the law of diminishing marginal product in capital.
D) the law of increasing marginal product in capital.
35) Which of the following is correct?
A) TC = TFC + TVC
B) TC = TFC - TVC
C) TC = TFC * TVC
D) TC = TFC / TVC8
36) Suppose that a firm is currently producing 1,000 units of output. At this level of output, AVC is $1 per unit, and TFC is $500. What is the firm's TC?
A) $1,500
B) $1,000
C) $501
D) $499
37) Suppose that a firm is currently producing 500 units of output. At this level of output, TVC = $1,000 and TFC = $2,500. What is the firms ATC?
A) $2
B) $5
C) $7
D) $10
38) Suppose that when the level of output for the firm increases from 100 to 110 units, its variable costs increase from $500 to $700. What is the firm's marginal cost?
A) $5
B) $7
C) $20
D) $200
39) Which one of the following statements is FALSE?
A) TC = TFC + TVC
B) ATC = AFC + AVC
C) AFC = TFC divided by Q
D) MC = TC divided by Q
40) We are in the short run. When output is 100 units, the firm's total fixed cost is $500. What will this firm's total fixed cost be if output doubles to 200 units?
A) $1,000
B) $500
C) $250
D) Can't tell from the information provided
41) Refer to the above table. At an output of 4 units, average variable costs are
A) $16.
B) $22.
C) $38.50.
D) $44.9
42) Refer to the above table. At an output of 3 units, average variable costs are
A) $42.
B) $30.
C) $44.
D) $14.
43) Refer to the above table. At an output of 2 units, average total costs are
A) $61.
B) $122.
C) $16.
D) $45.
44) In the above figure, if this firm produces output level Q2, it has average variable costs
of
A) OF.
B) OE.
C) OB.
D) OD.
45) In the above figure, if this firm produces output level Q2, it has average total costs of
A) OF.
B) OE.
C) OC.
D) OD.
46) Refer to the above table. What are total fixed costs at an output of 2 units?
A) $50
B) $100
C) $150
D) $20010
47) Refer to the above table. What are total variable costs at an output of 2 units?
A) $50
B) $100
C) $150
D) $200
48) When the price of shirts emblazoned with a college logo is $10, consumers buy 150 per week. When the price declines to $9, consumers purchase 200 per week. Based on this information, calculate the price elasticity of demand for logo-emblazoned shirts.
49) In a local market, the monthly price of Internet access service decreases from $20 to $10, and the total quantity of monthly accounts across all Internet access providers increases from 100,000 to 200,000. What is the price elasticity of demand? Is demand elastic, unit-elastic, or inelastic?
50) The Short run price elasticity of demand for tires is 0.9. If an increase in the price of petroleum (used in producing tires) causes the market prices of tires to rise from $50 to $60, by what percentage would you expect the quantity of tires demanded to change?