Determine which of the following descriptions is true regarding the rational consumer

ECON 1002 Microeconomics Unit 1 Milestone ECON1002 Microeconomics Unit 1 Milestone

Published on Apr 30, 2020

ECON 1002 Microeconomics Unit 1 Milestone Click below link for Answer https://www.sobtell.com/q/tutorial/default/206917-econ-1002-microeconomics-unit-1-milestone https://www.sobtell.com/q/tutorial/default/206917-econ-1002-microeconomics-unit-1-milestone 1 When Isabella and Sam chose to put up an affordable, maintenance-free plastic fence in their yard instead of the wrought-iron fence they preferred but could not afford on their budget, they demonstrated __________. profit maximization consumer optimization labor/leisure trade-off consumer surplus 2 Which of the following is not considered a factor of production? Interest earned on an investment The property that a factory is built on The employees for a gas station A printer to make copies for a company 3 The rational consumer will seek to do which of the following? Consume to the point where utility is the highest while also using the fewest amount of resources Recognize that opportunity costs do not exist when resources are fully employed Use in

Unit 4 Final Milestone

1

Which of the following is not considered a factor of production?



Interest earned on an investment



A printer to make copies for a company



The property that a factory is built on



The employees for a gas station

CONCEPT

Resource Allocation for Firms

2

Number of Employees Total Production Marginal Product of Labor Marginal Reve

0 0 0

1 9 9

2 24 15

3 36 12

4 43 7

If the price of the item is $15 per unit and the employees cost

$125 each, how many employees should the firm hire to maximize

their profit?



Three employees



Four employees



One employees



Two employees

CONCEPT

Output Optimization: Marginal Revenue Product

3

Which of the following is a characteristic of monopolistic

competition?



Firms sell homogenous products.



Advertising increases the cost of production.



Cooperation between firms is sometimes used to maintain prices.



Predatory price cutting occurs.

CONCEPT

Monopolistic Competition

4

Determine which of the following descriptions is true regarding the

rational consumer.



Makes choices that exhibit decreasing utility with the ability to increase consumption



Wants to maximize utility



Makes decisions based on an unlimited income



Which of the following is true about the long run average cost

curve?



The long run average cost curve can be found as the MC from above the shut down

point onward.



The long run average cost curve is shaped like a bell and rises because of economies

of scale while falling because of diseconomies.



The long run average cost curve is comprised of all the lowest points of each of the

short run average cost curves because no firm will operate at a level of higher per-unit

costs in the long run than in the short run.



The long run average cost curve cannot be equal to or lie below any short run average

cost curve because in the short run all factors of production can be variable.

CONCEPT

Long-Run Supply Curve

8

Which of the following scenarios relates to both natural and

frictional employment?



Mikhal just moved with his family from Miami to Chicago and is looking for work.



Linda lost her job in manufacturing due to her company moving all manufacturing out of

the country.



Michelle is unemployed because she doesn't have the technology skills needed in the

current job market.



Chip lost his job due to a massive slowdown in the economy and cannot find a job in the

current recession.

CONCEPT

Assessing Costs of Unemployment--Labor Economics

9

Andrea cannot spend all of her money on bananas. She has to purchase

other groceries and pay her bills.

Which economic term corresponds to the idea that Andrea must

budget how she spends her limited income?



Constraint



Marginal benefit



Marginal cost



Consumer optimization

CONCEPT

Cost and Benefit Optimization for Consumers

10

Ben's Bagels charges $10 per dozen bagels and he sells 30 dozen bagels

each day. Ben's costs of production total $150 each day. Ben recently quit

his job where he earns $100 per day in order to open his bagel store.

Ben's accounting profit per day would be __________.



$



$



$



$

CONCEPT

Accounting Profit

11

In anticipation of the college's athletic banquet, Lauren considered

purchasing gifts for several members of the athletics club who had put a lot

of time and effort into making it such a successful program. Lauren decided

The following is a list of methods used to gather information on the burden

pollution places on society.

Which of these is used to analyze how regulation affects market

prices?



Contingent valuation



Hedonic pricing



Healthcare outcomes



Cost-benefit analysis

CONCEPT

Assessing Costs of Waste and Pollution--Environmental Economics

14

Which of the following describes an industry that experiences

economies of scale, even at high levels of output?



Natural monopoly



Oligopoly



Perfectly competitive industry



Monopolistic competition

CONCEPT

Constant, Increasing and Decreasing Cost Industries

15

Mimi is granted a license to sell her unique Spirit Pins at local high school

lacrosse games. When Mimi prices her pins at $10, she sells 20 pins per

game. When she lowers her price to $8, she sells 40 pins.

The additional money she earns from dropping her price is known as

the __________.



Output effect



Opportunity cost



Marginal revenue



Price effect

CONCEPT

Revenue: Total, Marginal and Average

16

A person who consumes a good without paying for it is known as

a(n) __________.



free rider



producer



utility maximizer



rival

CONCEPT

Public Goods, Private Goods, and the “Tragedy of the Commons”

17

BWCT is a mining company that operates the world's exclusive mining site to

harvest a new metal.

Assuming it is a monopoly, which of the following statements is

least likely concerning entry and exit in this market currently?



There is predatory price cutting being done by BWCT to keep new companies out of

mining.



-0.



-0.



1.



0.

CONCEPT

Own-Price Elasticity

20

This graph below shows three indifference curves for blankets and pillow

cases.

Consider choice A and determine why this would NOT be the optimal

choice.



These indifference curves violate the conditions of consumer theory.



The consumer cannot afford this choice.



Additional income would be left over with this choice.



It does not provide the consumer with the highest level of utility possible.

CONCEPT

Optimal Choice

21

Which of the following situations has revealed the level of influence

that investors have in defining public company behavior?



The US not signing the Kyoto Protocol



Increasing awareness of the holistic connection between social sustainability,

investment returns and climate change



Investors becoming increasingly aware of the immediacy related to climate change

mitigation activities



Investor vigilance regarding compensation for CEOs

CONCEPT

Sustainable Returns--Investor Impact

22

Which of the following is an example of a constraint?



Sarah decides not to purchase an additional pair of Ugg boots because she already has

two pairs at home.



Harbor Sweets will produce to the point where marginal revenue is equal to marginal

cost.



A SouthCoast Clothing decides that five machines and 15 workers is the most efficient

in production.



Peter's Place can serve 300 people in its banquet room, and often has to turn away

large parties.



80



100



25



70

CONCEPT

Output Optimization: Marginal Revenue / Marginal Cost

25

Joe paid $5,000 for a used car, but he was willing to pay as much as

$10,000.

Which economic concept below corresponds to the example above?



Consumer surplus



Producer surplus



Deadweight loss



Ceteris paribus

CONCEPT

Market Equilibrium