What is TRUE about every point along a utilities possibilities frontier? A) Markets are perfectly competitive. B) It is possible to move to from one point on the frontier to another point and make everyone better off. C) All allocations are efficient. D) It includes some unattainable points. ANSWER C
Date: September 9th, 2020
Use the following two statements to answer this question: I. A growing firm’s average cost of production will decline over time if output continually expands and economies of scale are present. II. A firm’s average cost of production can decline over time if learning occurs as cumulative output increases. A) Both I and II are […]
Date: September 9th, 2020
Use the following statements to answer this question. I. To maximize profit, a firm will advertise more when the advertising elasticity is larger. II. To maximize profit, a firm will advertise more when the price elasticity of demand is smaller. A) Both I and II are true. B) I is true, and II is false. […]
Date: September 9th, 2020
Suppose there are 10 apples and 10 oranges in the economy. Joe is currently consuming 4 apples and 5 oranges, and Jane is consuming 6 apples and 5 oranges. At this allocation, Joe’s marginal utility of apples is 3, and his marginal utility of oranges is 5. Jane’s marginal utility of apples is 6, and […]
Date: September 9th, 2020
The price elasticity of gasoline supply in the U.S. is 0.4. If the price of gasoline rises by 8%, what is the expected change in the quantity of gasoline supplied in the U.S.? A) +3.2% B) -3.2% C) +32.0% D) +0.32% ANSWER A
Date: September 9th, 2020
As you move rightward on a marginal cost of abatement curve, emissions are A) falling, and the cost of eliminating the marginal unit falls. B) rising, and the cost of eliminating the marginal unit falls. C) falling, and the cost of eliminating the marginal unit rises. D) rising, and the cost of eliminating the marginal […]
Date: September 9th, 2020
The cross-price elasticity of demand for peanut butter with respect to the price of jelly is -0.3. If we expect the price of jelly to decline by 15%, what is the expected change in the quantity demanded for peanut butter? A) +15% B) +45% C) +4.5% D) -4.5% ANSWER C
Date: September 9th, 2020
Assume that beer is an inferior good. If the price of beer falls, then the substitution effect results in the person buying ________ of the good and the income effect results in the person buying ________ of the good. A) more, more B) more, less C) less, more D) less, less ANSWER B
Date: September 9th, 2020
Refer to Figure 9.6. Before this policy was implemented, producer surplus was A) $10. B) $2000. C) $4000. D) $6000. E) $12000. ANSWER B
Date: September 9th, 2020
One Guy’s Pizza advertising expenditures are $1,200 and sales are $30,000. When the advertising expenditure increases to $1,400, pizza sales increase to $32,000. The arc advertising elasticity of demand is approximately ________. A) 0 B) 0.1 C) 0.4 D) 2.5 E) 12.5 ANSWER C
Date: September 9th, 2020
