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· http://siuonline.blackboard.com/images/ci/icons/generic_updown.gifQuestion 9


0 out of 6 points




 Which of the following does NOT result from restricting output below the equilibrium level of output?


Answer


Selected Answer:


http://siuonline.blackboard.com/images/spacer.gif [None Given]


a.Profit is maximized.


b.Some portion of consumer surplus is transferred to producer surplus.


c.The Welfare Loss Triangle includes the loss of both consumer and producer surplus from units not produced that would have yielded both additional consumer and additional producer surplus.


d.The Welfare Loss Triangle shows total deadweight loss from not allowing output to reach the profit maximizing level of output.


· http://siuonline.blackboard.com/images/ci/icons/generic_updown.gifQuestion 10


0 out of 6 points




 Which of the following contribute to the downward slope of a demand curve?


Answer


Selected Answer:


http://siuonline.blackboard.com/images/spacer.gif [None Given]


A.


Income and substitution effects.


B.


The cross elasticities of alternating indifference curves.


C.


Decreasing marginal utility of consumption.


D.


A & C


· http://siuonline.blackboard.com/images/ci/icons/generic_updown.gifQuestion 11


Which of the following explains why marginal cost rises continually after passing a low level of output?


0 out of 6 points




A.


The marginal product of a variable factor eventually declines as more of the variable factor is combined with other fixed resources.


B.


The marginal rate of income substitution rises after output reaches a low level of output.


C.


The effect of alternating indifference curves eventually overpowers the effect of falling marginal productivity.


D.


The diminishing rate of marginal input quickly reaches zero and thereafter begins to rise continually throughout all subsequent levels of production.


http://siuonline.blackboard.com/images/ci/icons/generic_updown.gifQuestion 12 Which of the following is NOT true about profit maximization for a firm?


0 out of 6 points




1.Profit maximization occurs where marginal revenue equals marginal cost.


2.Profit maximization occurs where the profit per unit of the last unit produced is close to and just equal to zero.


3.Profit maximization occurs where the marginal revenue product of an input equals the marginal cost of employing or using that input.


4.Profit maximization occurs where output is restricted below the point where the marginal social benefit of the last unit of production is just equal to the marginal social cost of making that unit.


http://siuonline.blackboard.com/images/ci/icons/generic_updown.gifQuestion 14 If PX = $60,000, MPX = 300 and MRQ = $250, the marginal revenue product of X equals:


0 out of 6 points




A.


$75,000.


B.


300.


C.


$250.


D.


$60,000.


· http://siuonline.blackboard.com/images/ci/icons/generic_updown.gif http://siuonline.blackboard.com/images/ci/icons/generic_updown.gifQuestion 16


· The burden of a percentage sales tax will fall primarily on business when:


0 out of 6 points




A.


the tax is collected from businesses


B.


demand is highly elastic with respect to price.


C.


demand is highly inelastic with respect to price.


D.


the elasticity of demand equals 1.



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