Practice Test Economics 01 Midterm 2 Fall 2013 Professor K.C. Fung Multiple Choice: Choose the best answer 1. Suppose price of baguette is $1 and price of sushi is $5‚ then to maximize total utility‚ a rational consumer should consume until: a) the marginal utility of baguette divided by the marginal utility of sushi is 1 b) the marginal utility of baguette divided by the marginal utility of sushi is 5 c) the marginal utility of baguette divided by the marginal
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Section 3 1- The word "utility" means a) quantity demanded. c) demand. b) benefit or satisfaction. d) goal. 2- The benefit that John gets from eating an additional grape is called the a) quantity demanded. c) demand. b) total utility. d) marginal utility. 3- Marginal utility is the change in total utility that results from a) an increase in the consumer’s income. b) a one-unit change in the quantity of a good consumed. c) a decrease in the price of the good. d) an
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Health economics 1. In reaction to higher input costs‚ a physician decides to increase the average price of a visit by 5 percent. Will total revenues increase or decrease as a result of this action? Use the concept of price elasticity to substantiate your answer. THE ANSWER DPENDS ON THE VALUE OF ELASTICITY of demand. If demand is elastic then revenues will fall‚ whereas if demand is inelastic then revenues will rise. This is explained by the relation: change in revenues/ change in price=
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1i) Demand function for air travel between the U.S. and Europe has been estimated to be: ln Q = 2.737 - 1.247 ln P +1.905 ln I where Q denotes number of passengers (in thousands) per year‚ P the (average) ticket price and I the U.S. national income. Determine the price elasticity and income elasticity of demand (8 points). From Lecture Module 3 Equation 4 we learned the alternative formulation of elasticity. Alternative formulation of elasticity EP = dQ/dP * P/Q = dlnQ/dlnP Natural log:
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Department of Humanities Delhi Technological University Bawana Road‚ Delhi - 42 Syllabus of Engineering Economics for B. Tech. Subject code 206 Unit 1 Introduction: Nature and significance of economics‚ Goods and Utility‚ Basic Concept of Demand and Supply‚ Elasticity of Demand- Price elasticity of Demand‚ Cross elasticity of Demand‚ Production - Production Function‚ Production Process and Factors of Production‚ Market – Introduction to Monopoly‚ Perfect Competition‚ Oligopoly
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Economics 101 Summer 2012 Answers to Homework #5 Due 6/20/12 Directions: The homework will be collected in a box before the lecture. Please place your name‚ TA name and section number on top of the homework (legibly). Make sure you write your name as it appears on your ID so that you can receive the correct grade. Late homework will not be accepted so make plans ahead of time. Please show your work. Good luck! Please realize that you are essentially creating “your brand” when you submit this
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Economics 130: Exam 3 Study Guide 1) Which market model has the least number of firms? a. Pure monopoly 2) There is no control over price by firms in: a. Pure competition 3) Which is true under conditions of pure competition? a. A large number of firms b. Standardized product (meaning no product differentiation) c. Price takers (no exertion over product price) d. Free entry and exit in and out of the market e. Individual firms have a perfectly elastic demand curve‚ but whole industries
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Question 1 4 out of 4 points A firm selling in two markets is practicing price discrimination Selected Answer: b. when it is charging different consumers different prices and the price difference is not based upon cost differences. Question 2 4 out of 4 points To maximize profit a price discriminating firm should Selected Answer: d. both a and c Question 3 0 out of 4 points If a firm is selling a product in two markets‚ A and
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Review Sheet for Test 1 Chapter 1 • Accounting cost‚ Implicit costs‚ Economic cost • Accounting profit / Economic profit • Normal profit • Finding derivatives o For instance how to find marginal benefit (MB) or marginal revenue (MR)‚ marginal cost (MC)‚ etc. • Optimization rule (For instance‚ how to find output level Q that maximizes total revenue‚ or total profit) • Marginal analysis Chapter 2 • Demand function. • Determinants of demand
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Exhibit 1 1. (Exhibit 1: Total Product) Between points A and B the marginal product of labor is: A) increasing. B) zero. C) falling. D) infinite. Ans: C Exhibit 2: Total Product and Marginal Product | Labor per Day | Total Products (units per period) | 0 | 0.0 | 1 | 1.0 | 2 | 3.0 | 3 | 7.0 | 4 | 9.0 | 5 | 10.0 | 6 | 10.7 | 7 | 11.0 | 8 | 10.5 | 2. (Exhibit 2: Total Product and Marginal Product) The marginal product of the second worker is: A) 1
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