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Unformatted text preview: tells us that we can maximize utility from expenditure if we choose the affordable combination for which the marginal utility per dollar spent is equated for all goods. Is this true or false? If true, what is the marginal utility per dollar spent for the best combination of goods? a. false. b. true, 50. c. true, 25. d. true, 15. e. true, 10. 11. The demand for cigarettes is inelastic because the percent change in the quantity demanded of cigarettes in response to a 10‐percent rise in price is a. an increase of less than 10 percent b. an increase of more than 10 percent c. a decrease of less than 10 percent d. a decrease of more than 10 percent e. none of the above 12. The short run is defined as: A period of time sufficiently __________ that at least some of the firm’s factors of production are _________. a. short, fixed b. short, flexible c. long, fixed d. long, flexible e. none of the above 13. Profit is the total _______________ that a firm receives from the sale of its product minus all costs – explicit and _________ – incurred in producing it. a. subsidy, variable b. subsidy, implicit c. revenue, variable d. revenue, implicit e. none of the above Midterm One, Econ...
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- Spring '09