A consumer will achieve maximum total utility when
a. Purchases of Good A give the same satisfaction as purchases of Good B
b. Purchases of the last dollar spent on Good A give the same satisfaction as purchases of the last dollar spent on Good B
c. On average, every dollar spent on Good A yields the same satisfaction as every dollar spent on Good B
d. Total utility of Good A equals Total utility of Good B
The difference between accounting profit and economic profit relates to
a. The manner in which revenues are defined
b. The market structure for the firm's industry
c. The degree of elasticity of the firm's good in the market
d. The manner in which costs are defined
Which of the following is an example of a variable cost for a bakery?
a. The monthly payment on a purchased building
b. Property taxes
c. Fire Insurance payments
d. The cost of yeast and flour
Assume that product Alpha and product Beta are both priced at $1 per unit and that Ellie has $20 to spend on them. She currently buys 8 units of Alpha and 12 units of Beta. The marginal utility of Alpha is 40, and the marginal utility of Beta is 20. To maximize utility assuming these ratios hold throughout:
a. Ellie should make no change in her consumption patterns
b. Ellie should buy less Alpha and less Beta
c. Ellie should buy more Beta and less Alpha
d. Ellie should buy more Alpha and less Beta
Consider Jane's consumption of wine and cheese. Suppose the price of wine she buys is equal to the price of cheese she buys. If Jane is a rational consumer, then we know that
a. She buys equal quantities of wine and cheese
b. She buys unequal quantities of wine and cheese
c. The marginal utilities of the quantities she buys are equal
d. The marginal utilities of the quantities she buys are unequal
The extra cost of one more unit of output is called
a. Marginal Physical Product
b. Marginal revenue Product
c. Average Variable Cost
d. Marginal Cost
Firms have an incentive to substitute additional labor for capital as the:
a. Price of capital increases
b. Price of capital decreases
c. Price of labor increases
d. Marginal Physical Product of Labor decreases