Mid term exam 64

In the long run, a firm in a monopolistically competitive industry has its price equal to its

• marginal cost.

• average total cost

• elasticity of demand

• marginal revenue

Which of the following will definitely occur when there is a simultaneous increase in demand and an increase in supply?

• increases the demand for good B

• decreases the demand for good B

• increases the supply of good B.

• decreases the supply of good B.

If a price decrease results in your expenditure on a good decreasing, your demand must be

• unit

• inelastic

• linear

• elastic

When marginal utility is decreasing but positive, total utility is:

• increasing at a decreasing rate

• increasing at an increasing rate

• decreasing at a decreasing rate

• decreasing at an increasing rate

An indifference curve shows

• affordable combinations of goods.

• the relative price of one good relative to another.

• consumption possibilities that a consumer faces at different prices and income.

• different combinations of two goods among which the consumer is indifferent.

The production possibilities frontier is

• downward sloping and reflects tradeoffs in choices.

• downward sloping and reflects unlimited choices.

• upward sloping and reflects tradeoffs in choices.

• upward sloping and reflects unlimited choices.

People buy more of good 1 when the price of good 2 rises. These goods are

• normal goods

• Complements

• subtitutes

• inferior goods

Which of the following would NOT shift the demand curve for turkey?

• a change in tastes for turkey

• a decrease in the price of ham

• an increase in income

• a change in price of a turkey

Accounting profit is equal total revenue minus

• implicit costs.

• variable costs.

• the sum of implicit and explicit costs

• explicit costs

If the total cost of producing 10 units of product is $100, and the marginal cost of the 11th product unit is $21, which of the following is true?

• VC of 11 product units is $121.

• FC is $79.

• AVC of 10 units of product is $10.

• ATC of 11 product units is $11