Marginal utility diminishes more quickly:
a. the less durable the good is.
b. the greater the number of consumers consuming the good.
c. the shorter the time period between two successive consumptions.
d. the greater the number of firms producing the good.
e. the cheaper the good is.
QUESTION 2Average fixed cost is:
a. total cost divided by the number of units produced over a given period.
b. total fixed cost divided by the number of units produced over a given period.
c. the price of a fixed factor of production.
d. fixed cost divided by the number of units of a fixed input employed over a given period.
QUESTION 3If the P/E ratio is equal to 50, it implies that investors in the stock are willing to pay:
a. 25 for every 2 of the earnings that the company generates during a period.
b. 100 for every 1 of the earnings that the company generates during a period.
c. 500 for every 1 of the earnings that the company generates during a period.
d. 50 for every 1 of the earnings that the company generates during a period.
e. 5 for every 1 of the earnings that the company generates during a period.
QUESTION 4Which of the following statements about marginal utility is correct?
a. When marginal utility is negative, an increase in the quantity will increase total utility.
b. When marginal utility is decreasing, an increase in quantity will decrease total utility.
c. When marginal utility is positive, an increase in quantity will decrease total utility.
d. When marginal utility is zero, an increase in quantity will leave total utility unchanged.
e. When total utility is increasing, marginal utility will be negative.
QUESTION 5If average variable cost exceeds average fixed cost at a particular level of output:
a. Profits must be positive.
b. That fact is meaningless for deciding the quantity of output to produce.
c. It is more likely that the output level is low relative to the designed capacity of the production facility than that the output level is low relative to the designed capacity of the production facility.
d. Both b and c. are likely true.
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