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Midterm 2

# Midterm 2 - MULTIPLE CHOICE Choose the one alternative that...

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Inga ʹ s graph of her budget line has apples per week on the vertical axis and loaves of bread per week on the horizontal. A fall in the price of an apple shifts the A) vertical intercept upward. B) horizontal intercept rightward. C) horizontal intercept leftward. D) vertical intercept downward. 2) On a diagram showing indifference curves, the marginal rate of substitution is represented by the magnitude of 3) The short run is defined as 4) In the long run, 5) As output increases, AVC approaches ATC because of A) diseconomies of scale. B) diminishing marginal returns. C) increasing marginal cost. D) decreasing average fixed cost. Pizza Hut Labor (workers) Total product (pizzas produced per hour) 0 0 1 5 2 9 3 12 4 14 5 15 6) Using the data in the above table, what is the marginal product of the third employee? 7) Using the data in the above table, what is the average product of three employees? 1

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8) Gateway Computer Company increases the quantity of all its inputs by 10 percent and it produces 10 percent more computers. Hence Gateway definitely has experienced 9) In the figure above, an increase in income would result in the budget line A) making a parallel shift toward point a . B) becoming flatter. C) making a parallel shift toward point c . D) becoming steeper. 2
10) In the above figure, economies of scale are present up to an output level of

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