Name - Name: Score: 0 / 20 points (0%) [18 open-ended...

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Name: Score: 0 / 20 points (0%) [18 open-ended questions not graded] Test 2 Practice Multiple Choice Identify the choice that best completes the statement or answers the question. Fill in the appropriate box on the answer sheet; do not check or “x” the box. 1. If two services provide the same amount of satisfaction or utility, the consumer is said to display: ANSWER: 2. The utility derived from consumption is: ANSWER: 3. The marginal rate of substitution is always equal to: a. constant marginal utility. b. indifference. c. cardinal utility. d. ordinal utility. B POINTS: 0 / 1 a. b. c. d. B POINTS: 0 / 1 a. b. c. d.
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ANSWER: 4. With inelastic demand, a price increase produces: ANSWER: 5. With elastic demand: ANSWER: 6. The foregone value associated with the current rather than next-best use of a given asset is called: ANSWER: 7. In the short run, the: A POINTS: 0 / 1 a. b. c. d. A POINTS: 0 / 1 a. b. c. d. A POINTS: 0 / 1 a. b. c. d. D POINTS: 0 / 1
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ANSWER: 8. Noncash expenses are: ANSWER: 9. In the decision process, management should ignore: ANSWER: 10. Average cost declines as output expands in a production process with: ANSWER: a. b. c. d. D POINTS: 0 / 1 a. b. c. d. D POINTS: 0 / 1 a. b. c. d. C POINTS: 0 / 1 a. b. c. d. D POINTS: 0 / 1
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11. In the long run, firms will offer supply at the point where P = MR = MC if: ANSWER: 12. For a firm in perfectly competitive market equilibrium: ANSWER: 13. In the short run, a perfectly competitive firm will shut down and produce nothing if: ANSWER: 14. In the long run, firms will exit a perfectly competitive industry if: a. b. c. d. D POINTS: 0 / 1 a. b. c. d. D POINTS: 0 / 1 a. b. c. d. C POINTS: 0 / 1 a. b. c. d.
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ANSWER: 15. Price and product quality competition tends to be vigorous when: ANSWER: 16. The rate of return necessary to attract and retain capital investment is called: ANSWER: 17. Failure by market structure can occur when: ANSWER: 18. Externalities are: B POINTS: 0 / 1 a. b. c. d. A POINTS: 0 / 1 a. b. c. d. C POINTS: 0 / 1 a. b. c. d. D POINTS: 0 / 1
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ANSWER: 19. A per unit tax on pollution: ANSWER: 20. Economic rents are profits due to: ANSWER: Problem 21. Demand Analysis . The Crank Yankers DVD (season two) has been a hot seller during recent weeks. An analysis of weekly demand shows: a. b. c. d. B POINTS: 0 / 1 a. b. c. d. A POINTS: 0 / 1 a. b. c. d. B POINTS: 0 / 1
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where Q is DVD sales and P is price. RESPONSE: 22. Optimal Price . Last week, Wally's Burgers, Inc. reduced the average price on the 1/2-pound Papa burger by 1%. In response, sales jumped by 2%. RESPONSE: A. How many DVDs could be sold at a $20 price? B. Calculate the point price elasticity of demand at a price of $20. ANSWER: A. Q = 3,000 - 90P = 3,000 - 90(20) = 1,200 B. The point price elasticity of demand at a price of $20 is calculated as follows: ε P = Q/ P × P/Q = - 90 × 20/1,200 = - 1.5 (elastic) A. B.
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23. Income Elasticity . Deluxe Carpeting, Inc., is a leading manufacturer of stain-resistant carpeting. Demand for Deluxe products is tied to the overall pace of building and remodeling activity and, therefore, is sensitive to changes in national income.
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Name - Name: Score: 0 / 20 points (0%) [18 open-ended...

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