# The firm should shut down production entirely the

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The firm should shut down production entirely. The firm should increase output to 80 units. The firm should do nothing. It is already producing at maximum optimization. The firm should decrease output. CONCEPT
Output Optimization: Marginal Revenue / Marginal Cost 7 When the price of a good goes up 1% and demand decreases by the same amount, a good is said to be which of the following?
Perfectly elastic Elastic Unit elastic CONCEPT Defining Elasticity 8 The idea that a consumer must be able to evaluate all of the choices offered fulfills the assumptions of which of the following, related to preference behavior? CONCEPT
Consumer Choice Theory 9
Given the graph shown here, the firm should contemplate shutting down production at which of the following points? At Q1 When MC (the purple line) reaches its lowest point When MC (the purple line) is greater than Q1 At Q2 CONCEPT Shut-down Point 10 Last year, Paula's income was \$2,000, and she went to vacation twice. This year, Paula's income increased to \$3,000, and she went to vacation five times. Determine the income elasticity using the midpoint formula. 1.80
2.14 0.33 0.47 CONCEPT Income Elasticity 11 Determine which of the following descriptions is true regarding the rational consumer. Makes choices that exhibit decreasing utility with the ability to increase consumption Wants to maximize utility Has unlimited resources to consider in making decisions Makes decisions based on an unlimited income CONCEPT Decision Making Relationships: Rational Consumer 12 When do producers benefit from an inelastic supply? When quotas are placed on goods When input costs increase When a subsidy is provided When a tax is imposed CONCEPT Taxation and Subsidy 13
When a business owner uses process mapping, an activity is marked by __________.
Which of the following is true about marginal cost? The marginal cost will consistently fall with an increase in production. Marginal cost can be found at the intersection of a firm's budget constraints and production function.