9 What is a relative price A) Total utility tells us about relative price while

Question

9 What is a relative price A) Total utility tells us about relative price while marginal utility reflects relative value B) Limits to a household consumption choices C) Get "the most from money" D) The price of one good in terms of another good E) Is determined by consumer tastes and preferences 10. The Behavioral Economics is the science that: A) Studies how the goods and services are produced and distributed logy & neuroscience to study how people deal with the B) Combines economics, psycho things and good things C) Studies economic policy of the government D) Examines how scarce resources are distributed among competing uses E) Focused on prices and consumer choices Total cost (dollars per unit) 100 80 60 40 20 0 Output (units per hour) curve an d curve B is thecurv 11. In the above figure, curve A is the A) total variable cost; total fixed cost B) total cost; total fixed cost C) total fixed cost; total variable cost D) total cost; total variable cost E) total variable cost; total cost 12. W/hich of the following is an example of an implicit cost

Explanation / Answer

9) The answer of this question is D. This is because the definition of relative price states that price of one good in terms of another good. therefore, relative price is the ratio of two prices.  

10) The answer to this question is B. This is because the word behavioural economics word itself suggests that it focusus on the psychology and emotions of the individual while making any decision. Therefore, its studies economics, psychology and neuroscience in order to guide the individuals in decision making. The concept has gained importance in the last few years.

11)The answer to this question is D.

Curve B represents the Total variable costs. The shape of TVC id inverted S shape, that is, TVC first increases at a diminishing rate and then at an increasing rate. TVC starts from origin which means its value is zero at zero level of output.

Curve A represents the Total cost curve. The shape of TC is also identical to TVC, that is, inverted S shape. This imply that TC first increases at a diminishing rate and then at an increasing rate. The curve TC does not start from origin because it is the sum of total variable costs and total fixed cost. Since, at zero level of output, TVC=0 but some fixed cost is incurred. Hence, at zero level of output, TC=TFC.

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