1. Sushi costs $3 per piece. Cynthia?s total utility after eating one piece is 3
ID: 1184377 • Letter: 1
Question
1. Sushi costs $3 per piece. Cynthia?s total utility after eating one piece is 30 and her total utility after eating 2 pieces is 51, so her marginal utility from the second piece is A) 17. B) 10. C) 51. D) 7. E) 21. 2. When Chris maximizes his total utility, then his entire available budget is allocated in such a way that the A) marginal utility of all goods is equal. B) marginal utility per dollar is equal for all goods. C) marginal utility is as large as possible for goods. D) marginal utility will start decreasing if it consumes fewer goods. E) quantities consumed of each good are equal. 3.Juan?s marginal utility from strawberries is 200 and his marginal utility from cream is 100. Juan spends all his budget. The price of strawberries is $5 per pound and the price of cream is $5 per pint. To maximize his utility, Juan should A) buy more cream and fewer strawberries. B) buy less cream and more strawberries. C) buy more cream and more strawberries. D) buy less cream and fewer strawberries. E) change nothing because Juan is maximizing his utility now. 8. If the price of steak rises, a consumer who had been maximizing his or her utility before will buy less steak because its A) total utility falls. B) ratio of marginal utility to price is now less than that for other goods. C) marginal utility has fallen. D) ratio of marginal utility to total utility falls. E) ratio of marginal utility to price is now larger than that for other goods. 9.Increasing marginal returns to labor A) occur when a particularly efficient worker is employed. B) describe the portion of a total product curve where the marginal product is negative. C) mean that two workers produce less than twice the output of one worker. D) are the result of specialization and division of labor in the production process. E) occur only when there are increasing marginal returns to capital. 10. Jeremiah runs a bullfrog farm in Frogville, Oklahoma. Jeremiah notices that each additional worker he employs adds more to the total output than does the previous worker. Jeremiah must be A) experiencing increasing marginal returns to labor. B) producing at a point where the average product of labor decreases as more workers are employed. C) producing at a point below his total product curve. D) mistaken because the law of decreasing returns points out that it cannot be the case that the marginal product increases as more workers are employed. E) producing at a point where the average product of labor exceeds the marginal product of Labor 11. If 9 workers can produce 1,550 units of output and 10 workers can produce 1,700 units of output, then the marginal product of the 10th worker is A) 1,700 units. B) 1,500 units. C) 150 units. D) 170 units. E) It is impossible to calculate with the information given. 12. The marginal product of labor is A) total product divided by labor. B) the change in total product divided by the increase in labor. C) a measure of labor. D) output that does not meet quality specifications. E) total product minus the quantity of labor. 13. The total product curve shows the relationship between total product and A) cost. B) the quantity of labor. C) the average product. D) the marginal product. E) the marginal cost. 14. In the long run, the firm ________ change the number of workers it employs and ________ change the size of its plant. A) can; can B) can; cannot C) cannot; can D) cannot; cannot E) In order to answer the question more information is needed about how long is the long run. 15. In the long run, A) some resources are fixed. B) all resources are variable. C) output cannot be varied. D) all resources are fixed. E) Both answers B and C are correct. 16. Which of the following is a list of fixed inputs for a hospital? A) bandages, casts, and other materials B) antibiotics, pain medication, and other prescription drugs C) the emergency room, intensive care unit, and other facilities D) the nurses, receptionists, and other employees E) the lobby, the doctors, and the electricity it uses 17. To produce more output in the short run, a firm must employ more of a. all its resources. b. its fixed resources c. its variable resources d. the least costly resources regardless of whether they are fixed or variable. e. Firms cannot produce more output in the short run. 18. The short run is a time period that is A) equal to a day. B) too short to change the amount of labor hired. C) too short to change the size of the firm?s plant. D) long enough to change the size of the firm?s plant. E) too short to change the amount of any resource the firm employs. 19. Liz consumes two goods, candy bars and potato chips. Her budget is $4 per day. The price of a candy bar is $1.00 and the price of a bag of chips is 50 cents. Her utility is in the table above. How much marginal utility per dollar does the 3rd bag of potato chips give Liz? A) 18 B) 4 C) 8 D) 36 E) We need more information to be able to answer the question. 20. Liz consumes two goods, candy bars and potato chips. Her budget is $4 per day. The price of a candy bar is $1.00 and the price of a bag of chips is 50 cents. Her utility is in the table above. For Liz to maximize her utility, what combination of candy bars and potato chips should she eat? A) 4 candy bars and 0 bags of potato chips B) 3 candy bars and 2 bags of potato chips C) 2 candy bars and 4 bags of potato chips D) 1 candy bar and 5 bags of potato chips E) None of the above answers are correct. 21. Fixed cost in the Exhibit above equals a. $20 b. $30 c. $50 d. $280 e. we cannot calculate fixed cost 22. When marginal product is decreasing, marginal cost is a. less than zero b. equal to zero c. constant d. decreasing e. Increasing 23. If a firm shuts down in the short run and produces no output, its total cost will be a. zero b. equal to total variable cost c. equal to total fixed cost d. equal to explicit costs only e. impossible to calculate 24. If total cost at Q = 0 is $100 and total cost at Q = 10 is $500, then average variable cost at Q = 10 is a. $500 b. $400 c. $50 d. $40 e. $10 25. JerryExplanation / Answer
1.B 2. B 3.A 4. C5.a 6. d 7.c 8.b
9.c
10.a 11.b 12.b 13.a 14.a 15.c 16.d 17.c 18.b 19.a 20.a 21.b 22.b 23.C24.B 25.D
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