Costs and Price

4207 WordsNov 24, 201217 Pages
Summer2011-Microeconomics-Exam Two Practice 1. To calculate the total utility of consuming N products: A. add the additional satisfaction of consuming each product up to N and multiply by its price. B. add the total satisfactions of consuming each product up to N. C. multiply the additional satisfaction from consuming the Nth product by its price. D. multiply total satisfaction from consuming N products by N. 2. Suppose that the following table lists the utility that Steve receives from consuming oranges at 50 cents apiece. What is the marginal utility of increasing consumption from 2 to 3 oranges? [pic] A. 3 B. 6 C. 5 D. 12 3. Suppose that if you buy one Big Mac that gives you marginal utility of 500 and a second…show more content…
an increase in the demand for milk. B. a decrease in the demand for milk. C. an increase in the quantity demanded for milk but no change in demand. D. a decrease in the quantity demanded for milk but no change in demand. 16. Accounting profit is equal to: A. total revenue minus implicit costs. B. total revenue minus explicit measurable costs. C. total revenue minus implicit and explicit costs. D. implicit and explicit revenues minus implicit costs. 17. A business produces 8 items and sells them for $25 each. The total cost of producing the items is $190 for explicit costs and $200 for implicit costs. Accounting profit is: A. -$190. B. $10. C. $20. D. $200. 18. Rachel left her job as a graphic artist, where she earned $42,000 per year, to open her own graphic arts firm. Her implicit costs of the new business include: A. only the expenses incurred for office space, equipment, and supplies. B. only her foregone salary of $42,000 per year. C. both the expenses incurred for office space, equipment, and supplies and her foregone salary of $42,000 per year. D. neither the expenses incurred for office space, equipment, and supplies nor her foregone salary of $42,000 per year. 19. Short run decisions are: A. constrained because all inputs are variable. B. constrained because all inputs are fixed. C. constrained because some inputs are fixed while others are variable. D.

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