University of the People - AY 2018 Graded Quiz Unit 6. BUS 1103 - AY2018-T2 / Graded Quiz Unit 6Scored 19/20. Correct Answers Indictaed

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University of the People - AY 2018 Graded Quiz Unit 6 Question 2 Correct 1.00 Home / My courses / BUS 1103 - AY2018-T2 / 21 December - 27 December / Graded Quiz Unit 6 Started on Wednesday, 2... 7 December 2017, 8:46 PM State Finished Completed on Wednesday, 27 December 2017, 8:59 PM Time taken 12 mins 36 secs Marks 19.00/20.00 Grade 95.00 out of 100.00 The change in consumption of a good that results from the implicit change in income, which has been caused by a price change, is called __________. Select one: a. The substitution effect b. The marginal utility c. Income compensated price change d. Income effect e. Equimarginal Principle Which of the following is most likely to happen if a typical firm in a perfectly competitive market is experiencing an average revenue that is greater than its average cost? Select one: a. Price will increase b. Other firms will enter the market c. Other firms will leave the market d. Demand will decrease The correct answer is: Other firms will enter the market Question 3 Correct 1.00 Question 4 Correct 1.00 If you consume pasta every day of the week, its marginal utility is bound to _________ at the end of the week, ceteris paribus, and this is guided by the law of__________________. Select one: a. Decline, Diminishing Marginal Utility b. Increase, Increasing Marginal Utility c. Increase, Diminishing Marginal Utility d. Decrease, Total Utility e. Stay the same, Equimarginal Principle A perfectly competitive firm that is in long-run equilibrium will Select one: a. Earn an economic profit, be allocatively efficient, and be productively efficient. b. Not earn an economic profit, but be allocatively efficient and productively efficient c. Not earn an economic profit, not be allocatively efficient, but be productively efficient. d. Not earn an economic profit, not be productively efficient, but be allocatively efficient Question 5 Correct 1.00 Question 6 Correct 1.00 Good A Good B Quantity Total Utility Quantity Total Utility 1 20 1 9 2 30 2 29 3 39 3 39 4 46 4 43 5 50 5 44 Which bundle of goods satisfies the equimarginal principle? Select one: a. 5 units of Good A and 5 units of Good B b. 3 units of Good A and 4 units of Good B c. 1 unit of Good A and 1 Unit of Good B d. 5 units of Good A and 4 units of Good B e. Cannot determine unless budget constraint is specified A perfectly competitive firm should always: Select one: a. Earn an economic profit b. Increase its price if it is experiencing an economic loss c. Produce the quantity where its marginal cost equals its marginal revenue d. Produce at the productively efficient level of output Question 7 Correct 1.00 Question 8 Correct 1.00 Question 9 Correct 1.00 Which of the following is not a valid option for a perfectly competitive firm? Select one: a. Increasing its output b. Decreasing its output c. Increasing its price d. Increasing its resources If the typical firm in a perfectly competitive market is experiencing an economic loss, which of the following will happen? Select one: a. Firms will enter the market and the price will decrease b. Firms will enter the market and the price will increase c. Firms will exit the market and the price will decrease d. Firms will exit the market and the price will increase The correct answer is: Firms will exit the market and the price will increase The supply curve for a perfect competitor is its: Select one: a. Marginal Revenue Curve b. ATC curve c. MC curve d. MC curve above its AVC curve Question 10 Correct 1.00 Question 11 Correct 1.00 A perfectly competitive industry has Select one: a. perfectly elastic supply curve b. perfectly elastic demand curve c. negatively sloped demand curve d. positively sloped demand curve When a price changes, consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price. What explains this? Select one: a. The substitution effect b. The marginal utility c. Income compensated price change d. Income effect e. Equimarginal Principle Question 12 Correct 1.00 Question 13 Correct 1.00 Based on the table above, P1 and P2 indicate the prices of Good 1 and Good 2, respectively. Total utility is maximized when the following combination of Good 1 and Good 2 are purchased: Good 1 P1=$2 Good 2 P2=$4 Quantity Total Utility Quantity Total Utility 1 20 1 36 2 30 2 52 3 38 3 64 4 44 4 72 5 48 5 76 Select one: a. 5 units of Good 1 and 5 units of Good 2 b. 3 units of Good 1 and 3 units of Good 2 c. 1 unit of Good 1 and 1 unit of Good 2 d. 3 units of Good 1 and 2 units of Good 2 e. Cannot determine unless budget constraint is specified A perfectly competitive firm that is receiving a price of $5 and has a marginal cost of $6 should always Select one: a. drop out of the industry b. decrease its output c. increase its price d. increase its output Question 14 Correct 1.00 Question 15 Correct 1.00 Question 16 Correct 1.00 Assume that a perfectly competive firm that produces widgets is in long-run equilibrium. Then suddenly the market demand for widgets increases. The firm will Select one: a. experience an economic loss b. Experience an economic profit and produce more in the short run. c. Experience an economic profit and produce less in the short run d. Experience no economic profit in the short run Jane has a weekly budget of $50 to spend on fruit and vegetables. She decides to buy 4 pounds of fruit at a cost of $5/lb. She spends the rest on 5 pounds of vegetables. What is the price she pays for each pound of vegetable, given her budget constraint? Select one: a. $10 b. $6 c. $5 d. $25 e. $4 A firm that is producing at the lowest possible average cost is always: Select one: a. Earning an economic profit. b. Productively efficient c. Dominating the other firms in the market d. Not producing enough output Question 17 Correct 1.00 Question 18 Correct 1.00 Question 19 Correct 1.00 If a perfect competitor is producing at a level where its average cost is $8, and its marginal cost is $9, and it is receiving a price of $10 for its product, the firm Select one: a. Is maximizing economic profit b. Experiencing economic loss c. Should increase its output d. Is allocatively efficient In the long run, a perfectly competitive firm will achieve all but which of the following: Select one: a. Economic profit b. Allocative Efficiency c. Productive Efficiency d. Normal profit If a profit maximizing perfectly competitive firm is selling 1000 units at a price of $10 and its average total cost is $8 the firm is experiencing: Select one: a. A total profit of $2 b. A total profit of $2000 c. A price greater than its marginal cost d. An economic loss Question 20 Correct 1.00 Given the individual demand functions in the table below, what is the market demand at price P1? Prices A's Demand B's Demand C's Demand D's Demand P1 9 7 1 7 P2 10 10 2 11 P3 11 12 3 14 Select one: a. 32 b. 10 c. 24 d. 26 e. 33  [Show More]

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