Sections 9-10 Review 1

The additional satisfaction received from consuming an additional unit of a good is called

• marginal product

• consumer surplus

• producer surplus

• marginal utility

• total utility

Which of the following will decrease the demand for beef?

• An increase in the price of pork, if pork & beef are substitute goods

• A decrease in the cost of transporting beef to consumers

• An increase in the price of fries, if fries & beef are complementary goods

• An increase in the income of consumers, if beef is a normal good

• An decrease in the price of beef, if beef is an inferior good

A university increases student fees. This will increase revenues if the price elasticity of demand for education is

• elastic

• inelastic

• unit elastic

• greater than 1

• equal to price elasticity of supply

Which of the following occurs if the price of oranges is below the equilibrium price?

• The demand for grapefruit juice will increase.

• The quantity purchased of oranges is greater than the quantity sold.

• There is a surplus of oranges.

• The quantity supplied of oranges is greater than the quantity sold.

• The quantity demanded of oranges is greater than the quantity supplied.

Which of the following events will cause the demand curve for hamburgers to shift right?

• An increase in the price of pizza, a substitute for hamburgers

• An increase in the price of hamburgers

• A decrease in the cost of producing hamburgers

• An increase in the price of ketchup, a complement to hamburgers

• A decrease in consumers' real wealth, if hamburgers are a normal good

For a firm where labor is the only variable input, which of the following happens when diminishing returns set in?

• Average variable cost begins to increase.

• Marginal cost begins to increase.

• Average product of labor begins to decline.

• Average total cost begins to increase.

• Average fixed cost begins to increase.

If a firm's average total cost is higher than its marginal revenue, then

• the firm is earning normal profit

• the firm is earning accounting profit

• the price of the good will decrease in the long run.

• the firm is earning negative profit.

• the firm’s average fixed cost will increase.

Which of the following indicates the presence of economies of scale as the quantity of output increases?

• Average variable cost decreases

• Long-run average total cost decreases

• Marginal cost decreases

• Marginal cost exceeds average total cost

• Diminishing returns increase