ExamIImicro2006

ExamIImicro2006 - Exam II Answer the next question(s) on...

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Unformatted text preview: Exam II 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. Units Units of J M U j of K MU k 1 56 1 32 2 48 2 28 3 32 3 24 4 24 4 20 5 20 5 12 6 16 6 10 7 12 7 8 1. 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. C) 4 units of J and 5 units of K. B) 5 units of J and 5 units of K. D) 6 units of J and 3 units of K. 2. Refer to the above data. What level of total utility is realized from the equilibrium combination of J and K determined in the previous question? A) 156 utils B) 124 utils C) 276 utils D) 36 utils 3. Refer to the above data. If the consumer's money income were cut from $52 to $28, she would maximize her satisfaction by purchasing: A) 3 units of J and 3 units of K. C) 4 units of J and 1 unit of K. B) 1 unit of J and 3 units of K. D) 2 units of J and 3 units of K. Use the following to answer questions : $20 18 16 14 12 10 8 6 4 2 1 2 3 4 5 6 7 8 Quantity demanded T o t a l r e v e n u e TR 4. Suppose that the above total revenue curve is derived from a particular linear demand curve. That demand curve must be: A) inelastic for price declines that increase quantity demanded from 6 units to 7 units. B) elastic for price declines that increase quantity demanded from 6 units to 7 units. C) inelastic for price increases that reduce quantity demanded from 4 units to 3 units. D) elastic for price increases that reduce quantity demanded from 8 units to 7 units. 5. Suppose that the above total revenue curve is derived from a particular linear demand curve. That demand curve must be: A) inelastic for price declines that increase quantity demanded from 2 units to 3 units. B) elastic for price declines that increase quantity demanded from 5 units to 6 units. C) inelastic for price increases that reduce quantity demanded from 4 units to 3 units. D) elastic for price increases that reduce quantity demanded from 4 units to 3 units. 6. If a firm finds that it can sell $13,000 of a product when its price is $5 per unit and $11,000 of it when its price is $6, then: A) the demand for the product is elastic in the $6-$5 price range. B) the demand for the product must have increased. C) elasticity of demand is 0.74. D) the demand for the product is inelastic in the $6-$5 price range....
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ExamIImicro2006 - Exam II Answer the next question(s) on...

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