ECON Midterm #4 Final Review

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Review

If a firm can sell $13 of a product at $5 and $120 of a product at $6, then we can conclude that:

The demand for the product is elastic in the 5-6 range

Opponents of this idea state that decreasing the youth minimum wage would not create any new youth employment and would simply decrease the wage of those already working.

Opponents of the idea feel that demand for youth workers is perfectly inelastic

Perfectly Inelastic

quantity does not respond at all to changes in price (E=0)

It takes a considerable amount of time to increase the production of pork. This implies that:

the short run supply for pork is less elastic than the long run supply of pork

Recently government has proposed a per unit tax on lipides in order to boost its revenues. Consumers will bear all of this tax if:

the demand for lupines is perfectly inelastic, or the supply of lupines is perfect elastic.

Currently, the equilibrium price for good X is 20 and the equilibrium quantity is 60. If a tax of $2 per unit is imposed on producers of this good, we can conclude that:

total tax revenues collected would be greater if the supply curve was steeper

Assumption that preferences are complete:

means that between any two market bundles of goods the consumer can determine that either one bundle is preferred to the other bundle or that the consumer is indifferent between the two bundles.

Consumers have to make trade off's in deciding what to consume because:

they are limited by their income levels

Which is correct?

If marginal utility is diminishing, and is a positive amount, total utility will increase.

Donna enjoys hockey games more than movies. Yet in a typical year she goes to 10 movies and 2 hockey games. This suggests that:

if Donna is rational, hockey games must be more expensive than movies.

Mrs. Schultz is exhausting her money income by buying bottles of beer and bags of pretzels in such amounts at the marginal utility of the last bottle is 60 utils and the marginal utility of the last bag is 30 utils. The price of beer is $0.60 per bottle and the price of pretzels is $0.40 per bag. we can conclude that:

Mrs. Schultz should spend more on beer and less on pretzels

As an additional consumer obtains the benefits of a public good such as national defence, the benefits to existing consumers:

do not change.

Of the owners of the following firms, which do not have unlimited liability for the businesses' debts?

The Huber Corporation

What is an example of Equity Financing:

a corporation sells a newly issued share to a member of the public

What happens in a secondary market?

Already issued stocks and bonds are sold from one investor to another

average product of labour

The total output produced by a firm divided by the number of workers, or, output per worker.

Diminishing marginal returns to labour occurs when:

adding another unit of labour increases output, but not by as large as margin as the last unit of labour employed.

Arthur Lemming knows the average total cost and the average variable cost for a given level of output. Which of the following costs can he not determine given this information?

Fixed Cost

In the short run, total fixed costs will;

Not vary with output

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