Econ 1 Practice Final 3 Multiple Choice

Econ 1 Practice Final 3 Multiple Choice -...

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A company could produce 99 units of a good for \$316 or produce 100 units of the same good for \$320. The marginal cost of the 100th unit A) is \$3.20. B) is \$320. C) is \$4.00 D) cannot be calculated with this information. 2) In the above figure when the firm has reached its long - run equilibrium position, it will produce output equal to the amount A) Q 3 .B ) Q 1 .C ) Q 2 .D ) Q 4 . 3) If a country trades with the rest of the world, its consumption possibilities frontier A) is parallel to and lies outside its production possibilities frontier. B) intersects its production possibilities frontier where the production possibilities frontier touches the vertical and horizontal axis. C) is tangent to and lies outside its production possibilities frontier. D) is tangent to and lies inside its production possibilities frontier. 4) On a diagram showing indifference curves, the marginal rate of substitution is represented by the magnitude of A) a point on the vertical axis. B) an area. C) a slope. D) a point on the horizontal axis. 5) If the marginal benefit of the fifth slice of pizza is greater than the marginal cost of the fifth slice of pizza then the output level is A) efficient and less pizza should be produced. B) inefficient and more pizza should be produced. C) inefficient and less pizza should be produced. D) efficient and more pizza should be produced. A 1

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6) New reports indicate that eating turnips helps people remain healthy. The news shifts the demand curve for turnips rightward. In response, new farms enter the turnip industry. During the period in which the new farms are entering, the price of a turnip ________ and the profit of each existing firm ________. A) falls; rises B) rises; falls C) falls; falls D) rises; rises 7) In a perfectly competitive industry, a permanent decrease in demand initially brings a lower price, economic A) loss, and entry into the industry. B) loss, and exit from the industry. C) profit, and entry into the industry. D) profit, and exit from the industry. 8) Producers ʹ total revenue will increase if A) the price rises and demand is inelastic. B) the price rises and demand is elastic. C) income increases and the good is an inferior good. D) income falls and the good is a normal good. 9) How does an unusually warm winter affect the equilibrium price and quantity of gloves? A) It raises both the price and the quantity. B) It lowers both the price and the quantity. C) It raises the price and decreases the quantity. D) It lowers the price and increases the quantity. 10) The willingness to pay curve is the same as A) the demand curve, but not the marginal benefit curve.
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Econ 1 Practice Final 3 Multiple Choice -...

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