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

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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.
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This note was uploaded on 12/12/2008 for the course ECON 29486 taught by Professor Denniswilson during the Fall '06 term at Western Kentucky University.

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

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