A+ Answers of the following Questions

Question 1         
Total revenue will increase if price:
A. rises and demand is elastic.
B. rises and demand is unit elastic.
C. falls and demand is inelastic.
D. falls and demand is elastic.

Question 2         
Cross elasticity of demand measures the response in:
A. the quantity of one good demanded to a change in the price of another good.
B. the income of consumers to the change in the price of goods.
C. the price of a good to a change in the quantity of another good demanded.
D. quantity of one good demanded when the quantity demanded of another good changes.

Question 3         
A person would be maximizing her total utility when:
A. she had a consumer surplus.
B. her marginal utility was zero.
C. her marginal utility was equal to her total utility.
D. she had no consumer surplus.

Question 1         
A decrease in the demand for a service means that the:
A. demand curve shifts to the right.
B. demand curve shifts to the left.
C. supply curve shifts to the right.
D. supply curve shifts to the left.
Question 2         
The market demand curve is derived:
A. so that it slopes downward and to the left as quantity rises.
B. by totaling the average demands for products in all markets.
C. by horizontally summing potential buyers' individual demand curves.

D. by vertically summing the demand curves of individuals in the market.
Question 3         
An increase in supply means that quantity supplied rises:
A. at least one price.
B. at a few prices.

C. at most prices.
D. at all prices.

Question 1         
As a firm's output expands, the:
A. ATC will reach a minimum before the AVC.
B. AVC will reach a minimum before the ATC
C. ATC and AVC will reach minimums at the same output.
D. ATC and AVC will reach maximums at the same output.

Question 2         
Marginal cost may be defined as the __________ cost that results from producing one more unit of output.
A. change in average total
B. change in average variable
C. change in total
D. rate of change in total fixed

Question 3         
Which is most clearly a fixed cost?
A. Insurance premiums
B. Wages of production workers
C. Cost of raw materials
D. Shipping costs

Question 1         
Melissa says she will have to be paid in order to even try Jason's cooking, so her marginal utility for Jason's cooking is:
A. constant.
B. increasing.
C. positive.
D. negative.

Question 2         
According to the general utility formula, the marginal utility of a good divided by the price of that good is:
A. less that negative one.
B. equal to one.
C. greater than one.
D. equal to zero.

Question 3         
If your marginal utility from your last session with your personal trainer is equal to the price she charged you, then:
A. you have had exactly the right number of sessions.
B. you have had too many sessions.
C. you have not had enough sessions.
D. there is no way to determine whether you have had enough sessions.

Question 1         
Fixed cost is sometimes referred to as __________ cost.
A. sunk
B. variable
C. total
D. economic

Question 2         
As a firm's output expands, the:
A. ATC will reach a minimum before the AVC.
B. AVC will reach a minimum before the ATC
C. ATC and AVC will reach minimums at the same output.
D. ATC and AVC will reach maximums at the same output.

Question 3         
When average total cost is declining, then:
A. marginal cost must be less than average total cost.
B. marginal cost must be greater than average total cost.
C. average total cost must be greater than average fixed cost.
D. average variable cost must be declining.