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1.When Kelly Ziegenfuss buys five units of a particular good or service, __________.

a.she has no consumer surplus

b.she has a consumer surplus

c.there is no way of knowing whether she has a consumersurplus

2.Lauren Elise Ballard would be maximizing her total utility when__________.

a.she had a consumer surplus

b.her marginal utility was zero

c.her marginal utility was equal to her total utility

d.she had no consumer surplus

3.Which statement is true?

a.Most people have the same utility schedules.

b.Most people enjoy a consumer surplus for at least some of thethings they buy.

c.We will consume additional units of a product until our consumersurplus is zero.

d.The utility of a product is measured by its usefulness.

4.Which statement is false?

a.The water-diamond paradox can be resolved with the help of the law of diminishing marginal utility.

b.We will consume a service when its marginal utility is equal toits price.

c.The law of diminishing marginal utility has little validity today.

d.None is false.

5.As Keith Collins buys more and more of any good or service, his__________.

a.total utility and marginal utility both decline

b.total utility and marginal utility both rise

c.total utility rises and marginal utility declines

d.total utility declines and marginal utility rises

6.Doug Horn will buy more and more of a good or service until__________.

a.marginal utility is greater than price

b.price is greater than marginal utility

c.price is equal to marginal utility

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Kritika Krishnakumar
Kritika KrishnakumarLv10
28 Sep 2019
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Related textbook solutions

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Related questions

3.

Which statement is true?

The minimum point on the firm's marginal cost curve is the shutdown point.

The minimum point on the firm's average variable cost curve is the shutdown point.

The minimum point on the firm's average total cost curve is the shutdown point.

The minimum point on the firm's marginal cost curve is the break-even point.

4.

As output expands beyond the break-even point, the vertical distance between the AVC and ATC will

remain constant.

get smaller.

get larger.

5.

Total revenue divided by output equals

average variable cost.

marginal cost.

price.

average total cost.

6.

A monopoly firm selling mustache wax to vain men in a small town is currently maximizing profits by charging a price of $5. It follows that the marginal cost of mustache wax

is equal to $5.

is greater than $5.

is less than $5.

None of these choices are true.

7.

A firm can sell 14 units at $18, but to sell 15 units, the firm must cut the price to $17. The marginal revenue derived from selling the 15th unit is

-$18

$3

$17

0

8.

If total revenue is increasing as output is rising, then

marginal revenue must be greater than zero.

marginal revenue must be less than zero.

marginal revenue must be equal to zero.

price must be increasing.

9.

Firms that had virtual monopolies, that is control over at least 80 percent of industry production, because of control over an essential resource include all of the following except

the DeBeers Diamond Company.

the Standard Oil Company.

the Ford Motor Company.

the International Nickel Company.

10.

Which statement is true?

None of these statements are true.

Most natural monopolies are government regulated or government owned.

All monopolies are bad.

All monopolies are good.

11.

Which is the most accurate statement?

There are virtually no oligopolies in the U.S.

The most important aspect of oligopoly is product differentiation.

There are a whole range of oligopolistic models, from a cartel to cutthroat competition.

An oligopolistic industry cannot have more than five firms

12.

Oligopolists have more control over prices than monopolistic competitors because

their prices are always set by the government.

since an oligopolist is the only competitor in the market, setting prices is no problem.

they can legally collude whereas monopolistic competitors may not.

with fewer competitors, they are able to monitor and determine their own prices much easier.

13.

The definition of monopolistic competition differs from that of perfect competition

in neither the number of firms nor the type of product.

in both the number of firms and the type of product.

with respect to the type of product.

with respect to the number of firms in the industry.

14.

The typical monopolistic competitor

may compete on the basis of physical differences, convenience, service, and ambience.

always competes on the basis of producing a product that is physically different from those of its competitors.

never uses price discrimination.

is a large firm.

15.

Which statement is true?

The monopolistic competitor may make a profit in the long run.

The monopolistic competitor has a perfectly elastic demand curve.

None of these statements are true.

The monopolistic competitor operates at the minimum point of her ATC curve.

16.

Which statement is true about the monopolistic competitor in the long run?

It will be breaking even.

It will be making a profit.

It may be making a profit or taking a loss.

It will be taking a loss.

17.

Which statement is true?

Most monopolistic competitors are large firms.

Monopolistic competitors produce goods or services for which there are no close substitutes.

None of these statements are true.

Monopolistic competitors usually operate at the minimum point of their average total cost curves.

18.

Which statement is false?

As the price of a good rises the consumer surplus decreases.

A person would maximize her total utility when she had no consumer surplus.

We will consume a service when its marginal utility is equal to its price.

A product's utility to a buyer is measured by how much the buyer is willing to pay for it.

1.

A consultant has advised Consolidated Fish, Inc., a perfectly competitive firm, that it should cut back its production in order to increase its profits. We can conclude from this that

CF's total costs must be greater than its total revenues.

CF's marginal cost must be greater than the price of its product.

CF's costs are increasing at a rate less than its revenues.

fixed costs are not being covered and CF should shut down.

2.

If marginal cost is equal to marginal revenue

the firm should hold output constant.

the firm should expand output.

there is no way to determine if the firm should expand output, contract output, or hold output constant.

the firm should contract output.

3.

Which statement is true?

The minimum point on the firm's marginal cost curve is the shutdown point.

The minimum point on the firm's average variable cost curve is the shutdown point.

The minimum point on the firm's average total cost curve is the shutdown point.

The minimum point on the firm's marginal cost curve is the break-even point.

4.

As output expands beyond the break-even point, the vertical distance between the AVC and ATC will

remain constant.

get smaller.

get larger.

5.

Total revenue divided by output equals

average variable cost.

marginal cost.

price.

average total cost.

6.

A monopoly firm selling mustache wax to vain men in a small town is currently maximizing profits by charging a price of $5. It follows that the marginal cost of mustache wax

is equal to $5.

is greater than $5.

is less than $5.

None of these choices are true.

7.

A firm can sell 14 units at $18, but to sell 15 units, the firm must cut the price to $17. The marginal revenue derived from selling the 15th unit is

-$18

$3

$17

0

8.

If total revenue is increasing as output is rising, then

marginal revenue must be greater than zero.

marginal revenue must be less than zero.

marginal revenue must be equal to zero.

price must be increasing.

9.

Firms that had virtual monopolies, that is control over at least 80 percent of industry production, because of control over an essential resource include all of the following except

the DeBeers Diamond Company.

the Standard Oil Company.

the Ford Motor Company.

the International Nickel Company.

10.

Which statement is true?

None of these statements are true.

Most natural monopolies are government regulated or government owned.

All monopolies are bad.

All monopolies are good.

11.

Which is the most accurate statement?

There are virtually no oligopolies in the U.S.

The most important aspect of oligopoly is product differentiation.

There are a whole range of oligopolistic models, from a cartel to cutthroat competition.

An oligopolistic industry cannot have more than five firms

12.

Oligopolists have more control over prices than monopolistic competitors because

their prices are always set by the government.

since an oligopolist is the only competitor in the market, setting prices is no problem.

they can legally collude whereas monopolistic competitors may not.

with fewer competitors, they are able to monitor and determine their own prices much easier.

13.

The definition of monopolistic competition differs from that of perfect competition

in neither the number of firms nor the type of product.

in both the number of firms and the type of product.

with respect to the type of product.

with respect to the number of firms in the industry.

14.

The typical monopolistic competitor

may compete on the basis of physical differences, convenience, service, and ambience.

always competes on the basis of producing a product that is physically different from those of its competitors.

never uses price discrimination.

is a large firm.

15.

Which statement is true?

The monopolistic competitor may make a profit in the long run.

The monopolistic competitor has a perfectly elastic demand curve.

None of these statements are true.

The monopolistic competitor operates at the minimum point of her ATC curve.

16.

Which statement is true about the monopolistic competitor in the long run?

It will be breaking even.

It will be making a profit.

It may be making a profit or taking a loss.

It will be taking a loss.

17.

Which statement is true?

Most monopolistic competitors are large firms.

Monopolistic competitors produce goods or services for which there are no close substitutes.

None of these statements are true.

Monopolistic competitors usually operate at the minimum point of their average total cost curves.

18.

Which statement is false?

As the price of a good rises the consumer surplus decreases.

A person would maximize her total utility when she had no consumer surplus.

We will consume a service when its marginal utility is equal to its price.

A product's utility to a buyer is measured by how much the buyer is willing to pay for it.

QUESTION 1

Assume there are two basic goods produced in a nation, consumer goods and capital goods. The production possibilities graph for these two goods is bowed out from the origin. This reason for this shape of the graph is because of:

A.

the other-things-equal assumption.
B.

the law of increasing opportunity costs.
C.

diminishing marginal utility.
D.

present choices and future possibilities.

1 points

QUESTION 2

From an economic perspective, when a student decides to attend another year of college, the student has concluded that the:

A.

marginal costs of attending college are reduced by the availability of grants and subsidies.
B.

marginal benefits of attending college have increased because the future is brighter.
C.

marginal benefits of attending college are greater than the marginal costs.
D.

marginal costs of attending college have decreased to make college affordable.

1 points

QUESTION 3

A person observes that as consumer prices fall, economic growth increases. The person concludes that fall consumer prices leads to economic growth. This conclusion would be an example of:

A.

confusing correlation with causation.
B.

the fallacy of composition.
C.

trade-offs among economic goals.
D.

the other-things-equal assumption.

1 points

QUESTION 4

The problem of unlimited wants and limited income is known as

A.

the scientific method.
B.

unequal wealth distribution.
C.

normative economics.
D.

the economizing problem.

1 points

QUESTION 5

A point outside the production possibilities curve is:

A.

unattainable without economic growth.
B.

attainable and the economy is efficient.
C.

unattainable without inflation.
D.

attainable, but the economy is inefficient.

1 points

QUESTION 6

Which one of the following would be an example of loaded terminology?

A.

market forces
B.

tentative hypothesis
C.

entrepreneurial functions
D.

creeping socialism

1 points

QUESTION 7

Suppose there are two economies, Alpha and Beta, both of which have the same production possibilities curves. If Beta devotes more resources to produce investment goods than consumer goods as compared to Alpha, then in the future:

A.

Alpha will not be able to achieve full employment.
B.

Beta will not be able to achieve full employment.
C.

Alpha will experience greater economic growth than Beta.
D.

Beta will experience greater economic growth than Alpha.

1 points

QUESTION 8

Macroeconomics, as opposed to microeconomics, is concerned with

A.

individual businesses.
B.

new computer technology.
C.

the stock market.
D.

the economy as a whole.

1 points

QUESTION 9

Which one of the following is an example of a positive economic statement?

A.

The size of the Federal government should be reduced.
B.

Midwest states affected by drought should be given more federal disaster aid.
C.

Education and income are highly correlated.
D.

The minimum wage for workers should be raised to help low-income workers.

1 points

QUESTION 10

Economics is primarily concerned with

A.

interactions between the government and market participants.
B.

how scarce resources are used.
C.

the production and distribution of capital goods.
D.

how income is divided among individuals.

1 points

QUESTION 11

The production possibilities table below shows the hypothetical relationship between the production of guns (national defense) and butter (social goods) in an economy.

A B C D E

Guns 0 4 7 9 10

Butter 4 3 2 1 0

If the economy is producing at alternative C, what is the opportunity cost of producing another unit of butter?

A.

3 units of guns.
B.

1 units of guns.
C.

2 units of guns.
D.

4 units of guns.

1 points

QUESTION 12

Assume that a consumer can buy only two goods X and Y, and has an income of $120. The price of X is $10 and the price of Y is $20. If the consumer spends all of her money on X and Y, which of the following would be a possible combination:

A.

4X and 2Y
B.

5X and 3Y
C.

6X and 3Y
D.

8X and 1Y

1 points

QUESTION 13

In the production possibilities model of an economy, when there is full employment of resources

a nation will be operating at an interior point within its production possibilities curve.

a nation will be operating on the production possibilities curve.

the production possibilities curve will shift outward to the right.

the production possibilies curve will shift inward to the left.

1 points

QUESTION 14

In economics the concept that there is "no free lunch" means

A.

scarce resources were used to produce these "free" goods so there is an opportunity cost to producing them.
B.

consumers are irrational when they ask for a free lunch unless they can make the case that the free lunch benefits business.
C.

the marginal cost of the "lunch" is greater than the marginal benefit.
D.

businesses could not make a profit if they gave away free goods to consumers.

1 points

QUESTION 15

Assume that a consumer can only purchase two goods with her income. A straight-line budget constraint indicates that the opportunity cost of obtaining an additional unit of one good is:

A.

negative.
B.

constant.
C.

increasing.
D.

decreasing.

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