19) Refer to Figure 7.1. The ________ movie rental has a marginal utility of zer

Question

19) Refer to Figure 7.1. The ________ movie rental has a marginal utility of zero. 19) ______ A) first B) second C) third D) fourth 20) Dan owns a factory that manufactures smartphones. He has a lot of costs every month to keep his factory running. Which of the following is one of Dan's fixed costs?

20) ______ A) his electricity bill for the factory B) his mortgage on the factory C) memory devices used to store music and video on the smartphones D) plastic used to make the smartphones

21) If Mayo Lawyer Firm's total costs are $7000 when 20 clients' cases are worked and $7600 when 21 clients' cases are worked, the marginal cost of the 21st client's case is: 21) ______ A) $500. B) $600. C) $400. D) $300.

22) A firm will begin to experience diminishing returns at the point where: 22) ______ A) marginal cost increases. B) marginal product increases. C) marginal cost decreases. D) both B and C

23) Suppose marginal cost is $5. Average variable costs are $10. For the next unit of output produced, average variable costs will be: 23) ______ A) equal to $10. B) less than $10. C) more than $10. D) It is impossible to say.

24) Refer to Figure 9.1. A farmer produces 100 bushels of corn and sells each bushel at $5. The cost of producing each unit bushel is $2. This farmer's total revenue is: 24) ______ A) $200. B) $500. C) $20. D) $300.

25) Assume soybeans are produced in a perfectly competitive industry. A soybean farmer is currently maximizing his profits. If the market price of soybeans falls, after the farmer adjusts to the new price, he will be producing ________ bushels of soybeans and his profit will be ________. 25) ______ A) the same number of; the same B) fewer; the same C) more units of output; the same D) fewer; lower

26) Refer to Table 9.1. If the market price is $40, which of the following would you recommend to this firm? 26) ______ A) Increase output to five units, so that marginal cost equals marginal revenue. B) Shut down production to insure loss minimization. C) Reduce price to $35, so that marginal cost will be less marginal revenue. D) Continue producing four units of output, because the firm is able to make an economic profit.

27) For a competitive firm, marginal revenue is ________ price, whereas for a monopolist marginal revenue is ________ price. 27) ______ A) less than; equal to B) greater than; equal to C) equal to; less than D) equal to; greater than

28) Refer to Figure 10.9. The deadweight loss of monopoly is: 28) ______ A) FABE. B) BEC. C) FGBC. D) ACF.

29) Assume a non-price discriminating monopolist can sell 20 units of a good for 4.00 each and can sell 21 units of that good for $ 3.85 each. The marginal revenue of the 21st unit is: 29) ______ A) $ -.85. B) $ -85. C) $85. D) $ .85.

30) If a government grants monopoly power through a patent, it may beneficial from a social perspective because: 30) ______ A) it may insure less consumer products. B) it may encourage higher standards of professional ethics. C) it may encourage the development of new products. D) it may keep down monopoly profits.

Explanation / Answer

B

C

A

C

C

B

C

B

A

A

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