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# examiid - Principles of Microeconomics Exam II Version D...

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Principles of Microeconomics – Exam II – Version D Name: _________________________ University of Texas-Arlington Multiple Choice : Select the best answer (2 points each) 1. The price elasticity of demand tends to be higher for goods a. for which the consumer spends a high percentage of his or her income. 2. The longer the time period consumers have to adjust to price changes, the ________ is the ________ elasticity of demand. c. higher, price 3. Cross elasticity of demand measures the responsiveness of c. changes in the quantity demanded of one good to changes in the price of another good. _________________________________________________________ Quantity Demanded Quantity Supplied Price of Good A of Good A Of Good A _________________________________________________________ \$5.50 5 55 4.50 15 45 3.50 25 35 2.50 35 25 1.50 45 15 .50 55 5 _________________________________________________________ 4. When price decreases from \$5.50 to \$4.50, the price elasticity of supply is ________. d. 1 5. In order for an individual to maximize utility through the consumption of two goods, A and B, that individual must fulfill the condition given as d. MU A /P A = MU B /P B . 6. Total utility a. is the total amount of satisfaction derived from consuming a good. _____ b. for quantity Y can be calculated by summing the marginal utilities of each unit up to and including quantity Y. c. is the sum of all the utils associated with consuming a good. 7. Given that MU x /P x < MU y /P y , consumers who spend all their income on these two goods d. can increase utility by buying more of Y and less of X. 8. Suppose Alice receives 123 utils from consuming one hamburger and 50 additional utils from consuming a second hamburger. What is the marginal utility of the second hamburger? c. 50 utils 9. Making a manager a residual claimant is often a way of c. reducing the incentive of the manager to shirk. 10. The biggest advantage of a partnership over a sole proprietorship is a. the benefits of specialization. 11. The short run is c. a period of time in which some inputs are fixed.

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12. "Last October, due to an early frost, the average price for a pumpkin increased by 10 percent compared to the average pumpkin price in previous Halloween seasons. As a result, the quantity demanded county-wide decreased from 2 million to 1.5 million." Based on this statement, it is
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examiid - Principles of Microeconomics Exam II Version D...

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