question

Which of the following is an assumption made by rational choice theory?

answer

Rational individuals have perfect information regarding all possible choices and make these decisions without cost.

question

If the variable costs for a firm are $40,000, the fixed costs are $20,000, and the firm sells 100 units, what is the firm's average total cost?

answer

$600

question

Your business produces widgets, which you know to be price inelastic. To increase total sales revenue, you should __________.

answer

increase the price

question

Using the graph below, determine the profit maximizing-price and quantity to produce.

answer

Profit-maximizing price = $30

Quantity to produce = 45 units

Quantity to produce = 45 units

question

When a firm uses five laborers, it can produce 600 units daily. A sixth laborer allows the firm to produce 900 units daily. Which of the following is true regarding production?

answer

The average product for the sixth laborer is 150 units.

question

Consider the following chart. How much is the marginal cost when total output increases from 320 pounds to 390 pounds?

answer

$2.14

question

Economic profit is defined as __________.

answer

total revenue minus total cost, including both explicit and implicit types of costs and revenue

question

Consider the indifference curve graph below.

The slope between points A and C is ____________ and is known as the ____________.

The slope between points A and C is ____________ and is known as the ____________.

answer

−0.82; marginal rate of substitution (MRS)

question

Calculate Marginal Revenue when output rises from 420 to 430 pounds.

answer

$1.75

question

If the marginal utility per the price of Good A is $2.40, and the marginal utility per the price for Good B is $2.50, what does the utility-maximizing rule tell you to do, if the budget allows it?

answer

Purchase 1 more unit of Good B and compare again.

question

Given the information below, the accounting profit of the firm is __________.

product price: $40

unit cost: $10

quantity sold: 200

quantity produced: 200

product price: $40

unit cost: $10

quantity sold: 200

quantity produced: 200

answer

$6,000

question

Which of the following goods most likely has an income elasticity of 3?

answer

A high-end luxury car

question

Consider the budget line graph below.

If Mexican meals are $8 and Italian meals are also $8, what is the consumer's total budget for possible combinations of meals?

If Mexican meals are $8 and Italian meals are also $8, what is the consumer's total budget for possible combinations of meals?

answer

$40

question

One month ago, Olivia purchased 300 pages of printer paper at $1 per sheet. Today she learned that the price of the printer paper had risen to $1.50 per sheet, so she purchased only 100 sheets. The own-price elasticity calculated using the midpoint formula is __________

answer

-2.5

question

According to __________, individual preferences are shaped by society.

answer

behavioral economics

question

If the price of a good remains the same for all possible quantities demanded for the product, demand is __________.

answer

perfectly elastic

question

Using the data below, calculate the firm's economic profit.

product price: $1.25

unit Cost: $0.75

quantity sold: 690

quantity produced: 690

opportunity cost: $100

product price: $1.25

unit Cost: $0.75

quantity sold: 690

quantity produced: 690

opportunity cost: $100

answer

$245

question

Producing at a point under the total physical product curve is __________.

answer

inefficient

question

The optimal choice of chicken meals and vegetarian meals for IC1 and B1 in the diagram below is __________.

answer

12 chicken meals and 4 vegetarian meals

question

Janet is shopping for bottles and formula for her baby. Last month, the price of her favorite brand of formula was $15 per can. She bought six bottles last month. This month, the price of the cans of formula has increased by 20%. As a result, she will buy 50% fewer new bottles.

The cross-price elasticity for the new bottles calculated using the cross-price elasticity formula is __________ and the goods are __________.

The cross-price elasticity for the new bottles calculated using the cross-price elasticity formula is __________ and the goods are __________.

answer

-2.5; complements

question

The sensitivity of the quantity demanded of Cola B to a change in the price of Cola A is known as __________.

answer

cross-price elasticity

question

Consider the following chart. What is the marginal product of labor (MPL) of the fifth worker?

answer

+70

question

Based on this graph, the firm's break-even point is at a price of __________.

answer

$24

question

Consider the chart below. The marginal utility for the third unit of Chicken Fajitas is _____.

answer

20 utils

question

Consider the indifference curves below.

On indifference curve IC1, which combination of meals is a possible choice?

On indifference curve IC1, which combination of meals is a possible choice?

answer

2 chicken and 7 vegetarian

question

In microeconomics, the short run is a period of time __________.

answer

during which at least one of a firm's inputs is fixed

question

Consider the long-run cost curve below.

The upward-sloping portion on the right side illustrates __________.

The upward-sloping portion on the right side illustrates __________.

answer

diseconomies of scale