ECON-MIDTERM2

  1. 1. Utility is the:



    A)
  2. 2. The costs economists use in the concept of economic profit are:



    C)
  3. 5. A set of rules that specify the ways in which the resource for which they are defined may be used are:



    B)
  4. 6. To be effective, property rights must be:



    A)
  5. 7. The free-rider problem is a direct result of:



    B)
  6. 8. An example of a public good is:



    B)
  7. 9. An _______ results from any action that imposes costs on others outside of any market exchange.



    D)
  8. 10. A good for which no exclusive property rights exist is a:



    D)
  9. 11. The best example of a common property resource is:



    B)
  10. 1. If the first four units of a good consumed have marginal utilities of 10, 9, 8, and 7, respectively, this trend is an indication of the:



    A)
  11. 2. A consumer's spending is restricted because of:



    B)
  12. 3. Which of the following statements is (are) true?



    D)
  13. 4. If a consumer purchases a combination of commodities x and y such that MUx/Px = 50 and MUy/Py = 40, to maximize utility, the consumers should buy.



    A)
  14. 5. John Smedley, a careful maximizer of utility, consumes only two goods, peanut butter and broccoli. He had just achieved the utility maximizing solution in his consumption of the two goods when the price of broccoli rose. As he adjusts to this event, he will consume:



    A)
  15. 6. Assume that as the price of cauliflower falls the income effect causes consumers to buy less cauliflower. We can conclude that cauliflower is:



    A)
  16. 7. If the price of a good falls and the consumer decides to buy more of the good solely because it is relatively less expensive, this describes the:



    A)
  17. 8. The substitution effect always involves a change in consumption in the _______ direction of the ________ change.



    C)
  18. 9. According to the income effect, a decrease in the price of a product leads to an increase in the quantity demanded because buyers:



    C)
  19. 10. Suppose that the price of Cracker Jacks is 50 cents a box and the price of M&Ms is 25 cents a bag. If you have $10 to spend and decide to purchase 8 bags of M&Ms, the maximum quantity of Cracker Jacks that you can purchase is ________ boxes.



    D)
  20. 11. If a consumer moves upward along an indifference curve, his or her total utility:



    C)
  21. 12. If you are willing to give up 10 units of good Y (on the vertical axis) for 5 units of good X (on the horizontal axis), and your level of satisfaction is unchanged, the marginal rate of substitution is:



    A)
  22. 1. The short run is defined as a:



    A)
  23. 2. A factor of production whose quantity can be changed during a particular period is a:



    B)
  24. 3. The long run is a period that is:



    D)
  25. 4. A farm can produce 1,000 bushels of wheat per year with 2 workers and 1,300 bushels of wheat per year with 3 workers. The marginal product of the third worker is:



    D)
  26. 5. Given constant quantities of all other factors of production, when additional units of a variable factor of production add less and less to total output, then the firm is experiencing:



    C)
  27. 6. Diminishing marginal returns occur when:



    B)
  28. 7. When marginal cost is below average variable cost, average variable cost must be:



    A)
  29. 8. In the long run:



    A)
  30. 9. In making decisions about factor mix, a firm is seeking to:



    B)
Author
lilpumpkin
ID
46571
Card Set
ECON-MIDTERM2
Description
MICROECONOMICS MIDTERM2
Updated