review 2nd - ECO 110 Principles of Microeconomics review...

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ECO 110 Principles of Microeconomics review Exam 2 Jan 7 th , 2009 Dr. Anwar Alshriaan Use the table below to answer the following TWO questions. Units of labor Total product 1 10 2 20 3 27 4 25 1. According to the table above, the average product (AP) of 2 units of labor is a) 7 b) 9 c) 10 d) 27 Answer : c 2. According to the table above, the marginal product (MP) of 2 rd unit of labor is a) 7 b) 9 c) 10 d) 27 Answer: c 3. Assume that the total utilities for the 7 th and 8 th units of a good consumed are 65 and 67, respectively. The marginal utility (MU) for the 8 th unit is a) 132 b) 65 c) 67 d) 2 Answer: d 4. Suppose the first four units of an output produced have total costs of 50, 150, 300, 500, respectively. The marginal cost (MC) of the 4 th unit of output is a) 200. b) 150. c) 100. d) 75. Answer a Q price, cost MR D S = MC $1 $2 $3 20 30 5. Consider the graph above. The profit-maximizing price and output for a firm under monopolistic competition is a) a price of $2 and a quantity of 30. b) a price of $1 and a quantity of 20. c) a price of $3 and a quantity of 30. d) a price of $3 and a quantity of 20. 1
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ECO 110 Principles of Microeconomics review Exam 2 Jan 7 th , 2009 Dr. Anwar Alshriaan Answer is d 6. I pay only $5 for a large cheese pizza at Little Caesar’s even though I am willing to pay $20. My consumer surplus is a) $50 b) $15 c) $7.50 d) $5 Answer b Use the following to answer questions 7-8: Answer the next question(s) on the basis of the following two schedules which show the amounts of additional satisfaction (marginal utility) which a consumer would get from successive quantities of products J and K. 7. Refer to the above data. If the consumer has a money income of $52 and the prices of J and K are $8 and $4 respectively, the consumer will maximize her utility by purchasing: A) 2 units of J and 7 units of K. B) 5 units of J and 5 units of K. C) 4 units of J and 5 units of K. D) 6 units of J and 3 units of K. Answer: C 8. Refer to the above data. What level of total utility is realized from the equilibrium combination of J and K, if the consumer has a money income of $52 and the prices of J and K are $8 and $4 respectively? A) 156 utils B) 124 utils C) 276 utils D) 36 utils Answer: C 9.A consumer is maximizing her utility with a particular money income when: A) the total utility derived from each product consumed is the same.
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This note was uploaded on 11/03/2009 for the course ECO 110 taught by Professor Alshirian during the Spring '09 term at R.D. National College and W.A. Science College.

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review 2nd - ECO 110 Principles of Microeconomics review...

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