1. John buys more shoes than AI; this means John\'s demand will be: (A) more ela
ID: 1215161 • Letter: 1
Question
1. John buys more shoes than AI; this means John's demand will be: (A) more elastic than AI's (B) less elastic than Al's (C) equally elastic to Al's (D) there is no way to say unless you have more information.
2. If Sam's income RISES, his expenditures on INFERIOR goods will: (A) rise also (B) fall (C) stay the same (D) it could be any of these.
3. If elasticity of demand = -3 and prise RISES 2 %, Quantity demanded will: (A) rise 6% (B) fall 6% (C) rise 3% (D) rise .3%
4. A production function shows: (A) The quantity of output the firm can produce with different quantities of inputs (B) how much profit a firm can make (C) what it will costs to produce different levels of output (D) All of this.
5. if there are many close substitutes for a good, the demand for this good will be (A) elastic (B) Inelastic (C) large (D) small.
6. in the long run: (A) total fixed cost equals to zero (B)total variable costs equal zero (C) there two variable inputs (D) Marginal costs equal zero.
7. in the short run, as the firm uses the same plant to produce an output larger than the maximum technical efficiency output: (A) Average fixed cosy rises (B) Average variable cost rises (C) Total fixed cost rises (D) total fixed cost falls.
Explanation / Answer
Demand elastic more is due to huge requirement of shoes
An inferior good is a good that decreases in demand when consumer income rises.
a. The quantity of output the firm can produce with different quantities of inputs
A production function shows the relationship between inputs of capital and labor and other factors and the outputs of goods and services.
5. elastic
A good with more close substitutes will likely have a higher elasticity.
6. Marginal cost equals to zero
In long run profit is maximized when marginal cost is equal to marginal revenue.
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