Derek has 1 to spend at the grocery store. An apple, an orange, and a banana cost 0.50 each. If Derek's MUA/PA (ratio of marginal utility to price) of an apple is 45, MUO/PO of an orange is 38, and MUB/PB of a banana is 52, he will purchase a(n) _____ first and a(n) _____ second.
a. apple; orange
b. orange; apple
c. banana; orange
d. banana; apple
e. orange; banana
QUESTION 2Luke realizes that his space taxi service is operating in the region of diminishing marginal product. As he provides more taxi service in the short run, what will happen to the marginal cost of providing the additional service?
a. It is impossible to say anything about marginal cost with the information provided.
b. Marginal cost will decrease.
c. Marginal cost will increase.
d. Marginal cost will stay the same.
QUESTION 3If the current shareholders begin to believe that the prices of the stocks are likely to rise in the future, the supply curve of shares will:
a. shift to the right.
b. become perfectly elastic.
c. slope downward.
d. shift to the left.
e. become perfectly inelastic.
QUESTION 4Jen spent her weekly allowance of 110 on clothes and cosmetics. Assume that she had allocated 100 to shoes and 10 to lipsticks and is in equilibrium. What can you conclude from her purchase decisions?
a. She likes shoes ten times as much as she likes lipsticks
b. Jen liked the last pair of shoes ten times as much as the last tube of lipstick
c. Jen purchased hundred pairs of shoes for each tube of lipstick
d. She likes lipsticks ten times as much as she likes shoes
e. She purchased one pair of shoes for each tube of lipstick
QUESTION 5If the total cost of producing 10 units equals 90, and the average total cost of producing 11 units equals 8.75, then the marginal cost of the eleventh unit produced:
a. is definitely greater than the marginal cost of producing the tenth unit.
b. is definitely less than the marginal cost of producing the tenth unit.
c. is less than the average total cost of producing ten units.
d. is greater than the average total cost of producing ten units.
QUESTION 6The possible returns to a shareholder are:
a. rent and wages.
b. fixed interest and dividend.
c. fixed interest and a depreciation in the price of the stock.
d. rent and fixed interest.
e. dividend and an appreciation in the price of the stock.
QUESTION 7As long as the marginal utilities per dollar obtained from the last unit of all products consumed are the same, _____.
a. the consumer is in equilibrium and will not reallocate income
b. the consumer is not in equilibrium and will reallocate income
c. the consumer is most likely operating a budget deficit
d. the consumer is not maximizing utility
e. the government will recognize this as an intolerable disequilibrium and will most likely intervene by imposing a tax and reallocate the consumer's income
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