answer the following questions

Fall 2015 F:xam II (Consumer Theory, Cost Theory .cl Perfect Competition). Suppose that the price of X increases As a result, the consume, purchase 70.000 less d. the substitution effect. and purchase 72.000 less duc to the income etket. This would indicate that this good is a(n) -- a. normal goal, but not a giffen sa,d. b. nomial and a giffen good. c. inferior good, but not a gift. good. d. inferior and a gitThn good. 2. A normal good: a. must have an upward-sloping demand cnry,e._ b. must have a downward-sloping demand curve. c. could possibly have an upward-sloping demand curve. 3. The change of IOLA Utility to a consumer from thc consumption of an additional unit of .1,', ix cd110 avcragc utility. b. marginal utility. c. total utility. 4. Which of the following total utility graphs represents the principle of diminishi. marginal utility, TU, T1 Tl. 11. (A) (B) (C) Q (D) 5. Lezzall azir of water and diamonds arc consumed, which is likely to have a la,. marginal utility at a. Water. b. Diamonds. c. Both marginal utilities would be equal if thc consumcr maximizes his (her) total utility. d. Both marginal utilities would both be near zero. TABLE 1 Units of A and B MU of A Mu of B 20 60 16 42 12 30 24 14 10 6. The information in Table 1 is for Wendy Yellowstone. The price of A is S2, the price of B is S3 and Wend, has a budgct of S16. How much of A and B will Wendy buy to maximize total utility, 7. Using the information fromJA:de, for Wendy Yellowstone, assume, as before, that the price of A is S2 and the price of B is S3 and the budget = SI6. What would the maximizing total utility be, a. 70 b. 100 c. 158 d. 192 8. Assume that Coke is on the vertical axis and pii.za is on the horizontal axis for ten. If. slope of her indifference curve at point A is -0.8 (or minus 1/2), then which good gives Jena larger marginal utility at point A? a. Colic b. Pizza c. By definition of an indifthrenec curve, their marginal utilities arc constant all along the curve 9. In figure CONTH2, which indifference curve represents a good and a bad, 10. An indifference curve shows combinations of two goods (say C and F) that yield a. a zero utility to the consumer. b. the same total utility as the consumer substitutes C for F. c. the same marginal utility as the consumer substitutes C for F. I I. gofer to the diagram (at right) where xy is the relevant budget line and and h arc indifference curves. If Jen is initially at Point J, to maximize her total utility, she should a) strive for point N by obtaining a larger money income. b) purchase more of X and le. of Y c) remain at that point to maximize utility. d) purchase more of Y and less of X. O (Wan, of x 12.`ooAder an indifference ar7h(1C,,,,) with could on theJertticalzis and good X on the horizontal axis. One on a. Yi= IS, X =-9 b. Y ci.)°7=.1";, also 10 d. Y 15, X 10 13. Suppose that a firm has total revenues of 5500 million, explicit costs of 5420 million, and implicit costs of S90 million. Then it has an economic profit of a. 5410 million. b. S80 million. c. SIO million. d. -510 million. 14. The minimum efficient scale (MES) of a firm: a. is realized somewhere in the range of diseconomies of scale. b. occurs where marginal product becomes zero. c. is in the middle of the range of constant returns to .ale. d. is the smallest level of output at which long-run average total cost is minimized. 15. If AVC is decreasing, then MC must be a. below AVC, but increasing. b. below AVC, but decreasing. c. below AVC, and can be increasing or decreasing. d. above AVC. 16. Nuch of the following is likely to be a variable cost of operating an automobile a- gasoline b. monthly autoNyments c. auto insurance 17 An increase in wages of production workers will shift a firm's a. MC up. b. MC down. , AFC up. d. AFC down