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4) Demand and Utility Table for Milk Shakes -$6.00. -$3.50. -$1.50. -$10.50 5).

ID: 2440152 • Letter: 4

Question

4) Demand and Utility Table for Milk Shakes

-$6.00.

-$3.50.

-$1.50.

-$10.50

5).

-$9.60.

-$9.20.

-$8.50.

-$9.00.

6)

-$250.

-$333.

-$300.

-$400.

7) When marginal utility is __________, total utility is __________.

-positive; increasing

-zero; maximized

-All of the choices are correct.

-negative; decreasing

8)

-Demand is less elastic at point Y than at point X.

-Demand is perfectly elastic.

-Demand is less elastic at point X than at point Y.

-Demand is perfectly inelastic.

9) Which of the following is likely a variable cost?

-All of these choices are variable costs.

-Fuel

-Hourly wages

-Raw materials

10) Demand is elastic

-when price decreases raise total revenue.

-when price increases lower total revenue.

-All of the choices are correct.

-when the percentage change in quantity demanded is greater than the percentage change in price.

11) The quantity demanded of Pepsi has decreased. The best explanation for this is that

-Pepsi consumers had an increase in income.

-Pepsi's advertising is not as effective as in the past.

-the price of Pepsi has increased.

-the price of Coca-Cola has increased. MICROECONOMIC

Explanation / Answer

4)

Consumer surplus

= 0 .5 ( 1)(3)

= 1.5

Right answer is = $ 1.5

5)

Equilibrium price is most probably close to $ 9.20

Right answer is : $ 9.20

6)

AVC = TVC /Q

= 1,000/ 3

= $ 333.33

7)

All of choice are correct.

TU is maximum when MU is zero and TU increases when MU is positive.

8)

Right answer is : Demand is less elastic at point Y than at point X

Elasticity of demand is more at upper portion of demand curve.

9)

All of these are variable cost.

Variable cost changes with change in output level.

10)

Demand is elastic : when the percentage change in quantity demand is greater than the percentage change in price.

11)

Right answer is : price of pepsi has increased.

Increase price leads to fall in quantity demanded.

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