Lizzie's budget line is shown in the figure above. The relative price of a cookie is ________ per cookie.
A) 2 magazines
B) 0.5 of a magazine
C) 1
D) 2
Ques. 2The table above gives Jane's total utility from magazines and CDs. The price of a magazine is 4 and the price of a CD is 10 and Jane's budget is 88. What is Jane's total utility when she maximizes her utility?
A) 70 units
B) 1516 units
C) 2536 units
D) 2586 units
Ques. 3The table above gives Jane's total utility from magazines and CDs. The price of a magazine is 4 and the price of a CD is 10 and Jane's budget is 88. What is Jane's marginal utility per dollar spent on magazines at her consumer equilibrium?
A) 36 units
B) 15 units
C) 9 units
D) 5 units
Ques. 4The figure above could represent the long-run equilibrium for a
A) perfectly competitive firm.
B) monopolistically competitive firm.
C) monopoly.
D) firm facing inelastic demand at all outputs.
Ques. 5If an industry is monopolized by one firm, the four-firm concentration ratio equals
A) 1 percent.
B) 25 percent.
C) 40 percent.
D) 100 percent.
Ques. 6Bubba's BBQ has fallen on some hard times. Bubba has analyzed his past revenue and cost information and knows that if he shuts down, he will incur an economic loss equal to 20,000 in remaining lease payments.
Apparently, Bubba's current planning horizon is A) the short run because he still faces some fixed costs.
B) the long run because he faces only variable costs.
C) the short run because he faces only variable costs.
D) neither the short run nor the long run because lease payments do not figure into cost determinations.
Ques. 7In the above figure, at a price of 4 per unit, a profit-maximizing perfectly competitive firm will
A) shut down because its total revenue is less than its variable costs.
B) incur an economic loss.
C) produce 5 units.
D) Both answers A and B are correct.
Ques. 8Lizzie's budget line is shown in the figure above. Lizzie's real income in terms of magazines is ________ magazines
A) 5
B) 10
C) 15
D) 20
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