Econ practice final part

The _____ of a good or service is the additional benefit derived from producing one more unit of that good or service.

• net benefit

• marginal benefit

• marginal cost

• utility

The amount by which an additional unit of an activity increases total cost is the:

• net benefit.

• marginal benefit.

• negative benefit.

• marginal cost.

The profit-maximizing principle of marginal analysis refers to:

• subdividing larger problems into smaller, more manageable ones.

• the notion that a group's problems can be effectively analyzed by focusing on only a small subsample of the group.

• the result that the optimal quantity of a good or activity is the largest quantity at which the marginal benefit is greater than or equal to the marginal cost.

• the result that the optimal quantity is such that the net benefit to an individual is maximized.

The optimal solution to a “how much” decision is usually found where the _____ of an action is equal to the _____ of that action.

• explicit cost; implicit cos

• accounting profit; economic profit

• marginal benefit; marginal cost

• present value; net present value

Gino's Pizza has a special offer: one slice for $2, two slices for $3.50, three slices for $4.50, and four slices for $5.00. The marginal cost of the second slice is:

• $4.50.

• $10.

• $1.50.

• $2.

Constant marginal costs occur when the production of each additional unit costs:

• less than the previous one.

• more than the previous one.

• the same as the previous one.

• more than the next one.

An upward sloping marginal cost curve indicates that marginal costs are:

• decreasing.

• increasing.

• constant.

• equal to marginal benefit.

Learning effects often result in _____ marginal costs.

• decreasing

• increasing

• constant

• random

When the marginal benefit of an activity is equal to the marginal cost of the activity, the decision maker should do _____ of the activity.

• less

• that exact amount

• more

• none

Janelle loves sashimi. Her first piece of sashimi normally gives her a marginal benefit of $5. Each additional piece yields a marginal benefit that declines by $0.25 per piece. If her favorite sushi bar charges $2.75 per piece of sashimi, how many pieces should she eat?

• 8

• 10

• 5

• 11