Exam 2 Microeconomics

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Exam 2 Microeconomics
1 Total unity is best defined by which of the following
The total satisfaction received from consuming a particular amount of a product
2 Which best express the law of diminishing marginal unity?
The less of a product is consumed, the greater is the marginal utility of the product
3 Refer to the above table. What is the marginal utility of the fourth unit?
80
4 If the total utility is increasing, then marginal utility:
May either be increasing or decreasing, but it must be greater than zero
5 Assume that a consumer purchases a combination of products A and product B such that the MUa/Pa=8 and MUb/Pb=6. To maximize utility without spending more money, the consumer should:
Purchase more of product A and less of product B
6 Refer to the above table. If the consumer buys both products X and product Y, how much will the consumers buy of each to maximize utility?
3X and 4Y
7 A consumer is in equilibrium and is spending income in such a way that the marginal utility of product X is 40 and T is 16. The unit price of X is \$5. The price of Y is:
\$2 per unit
8 The price of diamond is substantially greater than the price of water because:
The marginal utility of the last unit of a diamond is significantly greater than the marginal utility of the last unit of a gallon of water consumed be a typical person
9 The substitution effect:
Measures the change in the quantity demanded of a good from a change in its relative price
10 The goal of a rational consumer is to maximize:
Total utility from all goods consumed
11 Economic profits are: Equal to the difference between accounting profits and implicit cost
12 Which is most likely to be a long-run adjustment for a firm that manufactures cars on an assembly line basis?
A change in production to a redesigned and retooled facility
13 the law of diminishing returns in a manufacturing plant of a fixed capacity implies that, eventually, employing one:
More workers will decrease the average amount of output

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