area 1 b area 2 c area 1 2 d area 3 Exhibit 23 4 Total Total Price Quantity

# Area 1 b area 2 c area 1 2 d area 3 exhibit 23 4

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area 1 b. area 2 c. area 1 + 2 d. area 3 Exhibit 23-4 Total Total
Price Quantity Demande d Fixed Cost Variable Cost Total Revenue Total Cost Marginal Revenue Marginal Cost \$ 50 0 \$8 \$0 (C) (H) 45 1 8 20 (D) (I) (L) (R) 40 2 (A) 30 (E) (J) (M) (S) 35 3 8 55 105 63 (N) (T) 30 4 8 (B) (F) 93 (P) (U) 25 5 8 125 (G) (K) (Q) (V) Refer to Exhibit 23-4. What dollar amounts go in blanks (A), (B), (C), (D), and (E), respectively? a. \$8; \$85; \$0; \$45; and \$80 b. \$8; \$70; \$50; \$30; and \$10 c. \$25; \$10; \$10; \$30; and \$50 d. \$8; \$60; \$0; \$10; and \$130 When an economy is not using all of its resources, it is producing at a point below its production possibilities frontier. a. True b. False Income elasticity of demand for a normal good is always a. less than one. b. greater than zero. c. equal to zero. d. less than zero Suppose that for a given good demand increases and supply decreases at the same time. If demand increases by a lesser amount than supply decreases, then equilibrium price __________ and equilibrium quantity __________ for that good. a. rises; rises b.
falls; rises c. falls; falls d. rises; falls Exhibit 22-1 (1) (2) (3) Price Quantity Sold Marginal Revenue \$21 100 \$21 101 (A) \$21 102 (B) \$21 103 (C) \$21 104 (D) Refer to Exhibit 22-1. The dollar amounts that go in blanks (A) and (B) are, respectively, a. \$4.80 and \$4.86. b. \$1 and \$1. c. \$21 and \$12. d. \$21 and \$21. Exhibit 22-7
Refer to Exhibit 22-7. At the profit-maximizing output level, the firm's total revenue is a. \$225.00. b. \$420.00. c. \$360.00. d. \$300.00. e. \$60.00. Cy recently went into the business of producing and selling cardboard boxes. For this business, which of the following is most likely to be a fixed cost? a. fire insurance b. paper costs c. labor costs d. adhesive costs A nonexcludable public good is characterized by nonrivalry in a. production and nonexcludability. b. consumption and rivalry in production. c. consumption and nonexcludability. d. consumption and excludability.
If the price of good X rises and the demand for good X is elastic, then the percentage __________ in quantity demanded is __________ the percentage rise in price, and total revenue __________. a. fall; greater than; falls b. fall; less than; falls c. rise; greater than; falls d. fall; equal to; remains constant e. fall; greater than; rises Jackson says that his fifth game of chess gave him greater utility than his first, and therefore the law of diminishing marginal utility does not hold. An economist who believes that marginal utility definitely and always declines with the consumption of equal successive units of a good will likely say a. the fifth game of chess is a different good than the first game of chess. b. each and every game of chess is identical to one another. c. there are exceptions to the law of diminishing marginal utility. d. the law of diminishing marginal utility does not apply to board games. A subsidy may be used as a corrective device in the case of a positive externality because it will __________ marginal private benefits and __________ demand. a. decrease; decrease b. decrease; increase c. increase; decrease d. increase; increase __________ scale exist when inputs are increased by some percentage and output increases by a smaller percentage, whereas __________ scale exist when inputs are increased by some percentage and output increases by the same percentage. a. Economies of; diseconomies of b. Diseconomies of; constant returns to c.