14) The Omnibus Corporation finds that its daily costs are $50 when it produces no output. Its total variable costs (TVC) change with output as shown in the accompanying table. Use this information to answer the following question(s).
Refer to the above information. The marginal cost of the fourth unit of output is: 14)_____
15) A perfectly inelastic supply is represented by a ________ supply curve. 15) ______
B) upward sloping
C) downward sloping
16) When the price of a good is $75, 25 units are demanded. When the price of the good is $25, 75 units are demanded.
Using the initial value, the elasticity of demand is ________ starting at a price of $75 and ________ starting at a price of
$25. 16) ______
A) 1; 1
B) 3; 3
C) 1/3; 3
D) 3; 1/3
17) An increase in supply caused no change in the equilibrium price of a good. Thus, demand must be: 17) ______
A) perfectly elastic.
B) perfectly inelastic.
C) unitary elastic.
18) The government imposes a maximum price on apartments that is below the equilibrium price. You accurately predict
that: 18) ______
A) the law will have no economic impact.
B) renters will find that landlords start offering to furnish the apartments.
C) the law will create an excess supply of apartments.
D) there will be fewer apartments available to rent.
19) Refer to the figure below. When trying to maximize utility subject to a budget constraint, the consumer would choose? 19)____
A. Either point e or point j only.
B. Point k only.
C. Any one of points k, e, or j.
D. Point e only.
Refer to the above data. On the basis of cost-benefit analysis government should undertake: 20)____
A) Plan A.
B) Plan B.
C) Plan C.
D) Plan D.
21) Tiny State University raises tuition for the purpose of increasing its revenue so that more faculty can be hired. TSU is assuming that the demand for university education at TSU is: 21)____
B) relatively elastic.
C) perfectly elastic.
D) relatively inelastic.
22) Refer to Table 7.1. Diminishing marginal utility sets in after the ________ cup of coffee per day. 22) ______
23) Refer to Table 7.1. The marginal utility of the third donut per day is: 23) ______
24) Refer to Table 7.1. The total utility of five donuts per day is: 24) ______
25) If a company in the U.S. would like to increase sales, what would be the best incentive for a customer to consume more goods? 25) ______
A) incorporate free goods or services
B) Consumers are indifferent to any incentives.
C) offer discounted goods or services
D) none of the above
26) Suppose that Erin spends all of her income on two goods, pizza and fiction novels. If the price of pizza rises then:
A) the current marginal utility per dollar spent on fiction novels will rise.
B) the current marginal utility per dollar spent on fiction novels will fall.
C) the current marginal utility per dollar spent on pizza will rise.
D) the current marginal utility per dollar spent on pizza will fall.
27) A firm will begin to experience diminishing returns at the point where: 27) ______
A) marginal cost decreases.
B) marginal product increases.
C) marginal cost increases.
D) both B and C