BUSI1118 Seminar 2

When the total utility of the good is maximized, then

• A.The marginal utility is maximized

• B.The marginal utility is zero

• C.The marginal utility is positive

• D.The marginal utility is negative

The linear indifference curve means the two goods are

• Substitutes

• Complements

• Perfect substitutes

• No relationship

The different points at the same indifference curve mean that

• The level of utility is different, but the proportion of the two goods consumed is same

• The level of utility is different , but the proportion of the two goods consumed is different

• The level of utility is same, but proportion of the two goods consumed is same

• The level of utility is same, but proportion of the two goods consumed is different

For the giffen good, when the price increases, then

• Substitute effect is positive, income effect is negative, and IE is stronger than SE.

• Substitute effect is negative, income effect is positive, and IE is stronger than SE.

• Substitute effect is negative, income effect is positive, and SE is stronger than IE.

• Substitute effect is positive, income effect is negative, and SE is stronger than IE.

If bundle a is preferred to bundle b, and b is preferred to bundle c, than a is preferred to c, this is called as

• Completeness

• Independence

• Transitivity

• Non-satiation.

Which one cannot increase the human capital of the workers?

• Higher wage rate

• More training

• More working experience

• More education

Which one is the reason for the workers getting higher wages than the equilibrium wage?

• Efficient wage

• The minimum wage policy

• The union

• All of above

If a nation that does not allow international trade in steel has a domestic price of steel lower than the world price, then

• The nation has a comparative advantage in producing steel and would become a steel exporter if it opened up trade

• The nation has a comparative advantage in producing steel and would become a steel importer if it opened up trade

• The nation does not has a comparative advantage in producing steel and would become a steel exporter if it opened up trade

• The nation does not has a comparative advantage in producing steel and would become a steel importer if it opened up trade

When the nation of Ectenia open itself to world trade in coffee beans, the domestic price of coffee beans falls, which of the following describe the situation?

• Domestic production of coffee rises, and Ectenia becomes a coffee importer

• Domestic production of coffee rises, and Ectenia becomes a coffee exporter

• Domestic production of coffee falls, and Ectenina becomes a coffee importer

• Domestic production of coffee falls, and Ectenia becomes a coffee exporter

When a nation opens itself to trade in a good and becomes an importer, then

• Producer surplus decreases, but consumer surplus and total surplus both increase

• Producer surplus decreases, consumer surplus increases, and so the impact on total surplus is ambiguous

• Producer surplus and total surplus increase, but consumer surplus decreases.

• Producer surplus, consumer surplus and total surplus all increase.