4. variable (e) Costs that do not change with output are called costs. 1. marginal 2. average 3. fixed 4. variable (1) If both goods provide negative utility, what will be the direction of the indifference curve? 1) Indifference curves are down ward sloping 2) Indifference curves are horizontal 3) Indifference curves are vertical 4) Indifference curves are upward sloping (g) If AFC is $8 at a quantity of output, and ATC is $9 at the same quantity of output, it follows that 1) marginal cost is $1. 2) AVČ is $17. 3) total cost is $17. 4) AVC is $1. 5) none of the above (h) If the owner of a firm cams more than zero economic profit, he or she has carned total revenue larger than his or her 1) implicit costs. 2) explicit costs. 3) ассouning profit. 4) implicit ensts pls explicit eosts 5) none of the ahove (i). The deteminant uf the prive elastivity uf demand of a partivulai vummlity is 1. The availability of substitutes for the commodity 2. The time period involved 3. The necessity of the good 1. All of the above G) If raising the price of cigarettes causes an increase in total revenue for sellers of Cigarettes, it could be concluded that the price elasticity of demand for cigarettes is: 1. Not enough information is given 2. Unit Elastic 3. Elastic 4. Inclastic
4. variable (e) Costs that do not change with output are called costs. 1. marginal 2. average 3. fixed 4. variable (1) If both goods provide negative utility, what will be the direction of the indifference curve? 1) Indifference curves are down ward sloping 2) Indifference curves are horizontal 3) Indifference curves are vertical 4) Indifference curves are upward sloping (g) If AFC is $8 at a quantity of output, and ATC is $9 at the same quantity of output, it follows that 1) marginal cost is $1. 2) AVČ is $17. 3) total cost is $17. 4) AVC is $1. 5) none of the above (h) If the owner of a firm cams more than zero economic profit, he or she has carned total revenue larger than his or her 1) implicit costs. 2) explicit costs. 3) ассouning profit. 4) implicit ensts pls explicit eosts 5) none of the ahove (i). The deteminant uf the prive elastivity uf demand of a partivulai vummlity is 1. The availability of substitutes for the commodity 2. The time period involved 3. The necessity of the good 1. All of the above G) If raising the price of cigarettes causes an increase in total revenue for sellers of Cigarettes, it could be concluded that the price elasticity of demand for cigarettes is: 1. Not enough information is given 2. Unit Elastic 3. Elastic 4. Inclastic
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:4. variable
(e) Costs that do not change with output are called
costs.
1. marginal
2. average
3. fixed
4. variable
(Đ) If both goods provide negative utility, what will be the direction of the indifference curve?
1) Indifference curves are down ward sloping
2) Indifference curves are horizontal
3) Indifference curves are vertical
4) Indifference curves are upward sloping
(g) If AFC is $8 at a quantity of output, and ATC is $9 at the same quantity of output, it follows that
1) marginal cost is $1.
2) AVC is $17.
3) total cost is $17.
4) AVC is $1.
5) none of the above
(h) If the owner of a firm eams more than zero economic profit, he or she has carned total revenue larger
than his or her
1) implicit costs.
2) explicit costs.
3) accounting profit.
4) implicit ensts plus explicit ersts 5) none of the ahove
(1). The deteminant uf die price elasticity of deumand of a par ticular cuulity is
1. The availability of substitutes for the commodity
2. The time period involved
3. The necessity of the good
1. All of the above
() If raising the price of cigarettes causes an increase in total revenue for sellers of Cigarettes,
it could be concluded that the price elasticity of demand for cigarettes is:
1. Not enough information is given
2. Unit Elastic
3. Elastic
4. Inclastic
Transcribed Image Text:1. Indicate which statement is true and which is false. If false, state the correct statement. Merely saying it
is a "false" statement is not sufficient to get full score.
(10)
(a) If the percentage change in quantity demanded of a good is larger than the percentage change in its
price, we call the demand is "inclastic".
(b) A good that has more substitutes will have lower price elasticity of demand.
(c) Total revenue remains the same as price changes, when demand is inelastic.
(d) If the cross-price elasticity of demand is positive, goods are complement to each other.
(e) Consumers are at equilibrium when Indifference Curve crosses the Budget Line.
2. Multiple Choice:
(a) Suppose price of Apple increases from Stk per Apple to 15tk per Apple. As a result quantity demanded
for Apple falls from 80 Apples to 20 Apples. Which of the following is the price elasticity of demand for
Apples?
(20)
1)-5/6
2) -1/6
3) -6
4) -6/5
(b) Suppose a consumer must choose between the consumption of Apple and Orange. If we measure Orange
on the horizontal axis and Apple on the vertical axis, and if the price of an Orange is 10tk and price of an
Apple is Stk, then the slope of the budget constraint is,
1)5
2) 10
3) 1/2
4) 2
(c) Which of the following is not true regarding the properties of Indifference Curves,
1) Indifference curves are down ward sloping
2) Indifference curves do not cross each other
3) Higher indifference curves are preferred to lower ones
4) Indifference curves are bowed outward
(d) An unrecoverable cost that should be disregarded in any current or future decision is also called a(n)
cost.
1. sunk
2. explicit
3. implicit
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