Question 1

Technological progress _______________.

Accepted Answer

A)   results in a downward shift of the marginal cost curve
B)   results in an upward shift of the marginal cost curve
C)   results in an upward shift of the willingness to pay curve
D)   results in a downward shift of the willingness to pay curve

Question 2

When technological changes are adopted, marginal abatement cost usually

Accepted Answer

A)   increases
B)   decreases
C)   not changed
D)   cannot be determined

Question 3

Total costs are found by ________.

Accepted Answer

A)   the intersection of the marginal cost and marginal benefits curve
B)   the area under the marginal willingness to pay curve
C)   multiplying the marginal cost by the number of units
D)   the sum of the marginal cost for each unit

Question 4

Marginal willingness to pay ____________.

Accepted Answer

A)   is the consumer's additional willingness to pay for one more unit of the good
B)   is the consumer's additional ability to pay for one more unit of the good
C)   is the consumer's ability to pay for consumption of all units of the good
D)   is the consumer's willingness to pay for consumption of all units of the good

Question 5

As long as marginal willingness is _________, total willingness will _________.

Accepted Answer

A)   declining; stay the same
B)   increasing; decrease
C)   positive; increase
D)   decreasing; decrease

Question 6

Refer to Table 3.0. At a price of $3.00, how many cups of coffee would this individual consume?

Accepted Answer

A)   2
B)   6
C)   4
D)   There is not enough information in the table to determine the answer.

Question 7

Refer to Table 3.1. According to the equimarginal principle, in order to minimize the cost of producing 100 units, how would we distribute production between plants A and B?

Accepted Answer

A)   0 units at plant A; 100 units at plant B
B)   20 units at plant A; 80 units at plant B
C)   38 units at plant A; 62 units at plant B
D)   50 units at plan A; 50 units at plant B

Question 8

Dina's willingness to pay for a scooter rental depends on her

Accepted Answer

A)   alternatives
B)   ability to pay
C)   wealth
D)   all the above

Question 9

The following figure shows the impact of technological change on the marginal cost of producing a certain good. With MC1 the total cost of producing Q* units is equal to _______.

Accepted Answer

A)   areas a + b + c
B)   areas b + c
C)   area b
D)   area c 1 the total cost of producing Q* units is equal to _______. 
A)   areas a + b + c 
B)   areas b + c 
C)   area b 
D)   area c  " class="answers-bank-image d-inline" rel="preload" >

Question 10

The notion of diminishing willingness to pay reveals that as____________.

Accepted Answer

A)   units consumed increases, willingness to pay for additional units increases
B)   units consumed increases, willingness to pay for additional units stays the same
C)   units consumed increases, willingness to pay for additional units decreases
D)   ability to pay increases, the number of units consumed increases

Question 11

One important characteristic of all marginal cost curves is that ________.

Accepted Answer

A)   they all intersect the Y axis
B)   although they may initially decline, they eventually increase
C)   they all eventually decline
D)   they are stepwise functions with lumpy investment features

Question 12

Dina's total willingness to pay for 15 rides is

Accepted Answer

A)   7
B)   10
C)   16
D)   26

Question 13

In the following figure the marginal cost of producing the 500th unit of output is ________.

Accepted Answer

A)   $500
B)   $550
C)   $150,000
D)   $212,500 th unit of output is ________. 
A)   $500 
B)   $550 
C)   $150,000 
D)   $212,500  " class="answers-bank-image d-inline" rel="preload" >

Question 14

Refer to Table 3.2. At a market price of $4.00, what is industry supply?

Accepted Answer

A)   0
B)   48 units
C)   $ 192.00
D)   Indeterminate. The table does reveal aggregate supply.

Question 15

Opportunity cost _______________.

Accepted Answer

A)   is represented by the area under the marginal cost curve
B)   is an upward sloping curve that intersects with the demand curve
C)   represents the maximum value of other outputs that could have been produced with the same resources
D)   all of the above

Exam 3: Benefits and Costs, Supply and Demand

Refer to Table 3.1. According to the equimarginal principle, in order to minimize the cost of producing 100 units, how would we distribute production between plants A and B?

Correct Answer
verified

Refer to Table 3.2. At a market price of $4.00, what is industry supply?

Correct Answer
verified

Opportunity cost _______________.

Correct Answer
verified

The notion of diminishing willingness to pay reveals that as____________.

Correct Answer
verified

Total costs are found by ________.

Correct Answer
verified

When technological changes are adopted, marginal abatement cost usually

Correct Answer
verified

One important characteristic of all marginal cost curves is that ________.

Correct Answer
verified

The following figure shows the impact of technological change on the marginal cost of producing a certain good. With MC₁ the total cost of producing Q* units is equal to _______.

Correct Answer
verified

Technological progress _______________.

Correct Answer
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Refer to Table 3.0. At a price of $3.00, how many cups of coffee would this individual consume?

Correct Answer
verified

Dina's willingness to pay for a scooter rental depends on her

Correct Answer
verified

Marginal willingness to pay ____________.

Correct Answer
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As long as marginal willingness is _, total willingness will _.

Correct Answer
verified

In the following figure the marginal cost of producing the 500^th unit of output is ________.

Correct Answer
verified

Dina's total willingness to pay for 15 rides is

Correct Answer
verified

Exam 3: Benefits and Costs, Supply and Demand

Refer to Table 3.1. According to the equimarginal principle, in order to minimize the cost of producing 100 units, how would we distribute production between plants A and B?

Correct AnswerverifiedShow Answer

Refer to Table 3.2. At a market price of $4.00, what is industry supply?

Correct AnswerverifiedShow Answer

Opportunity cost _______________.

Correct AnswerverifiedShow Answer

The notion of diminishing willingness to pay reveals that as____________.

Correct AnswerverifiedShow Answer

Total costs are found by ________.

Correct AnswerverifiedShow Answer

When technological changes are adopted, marginal abatement cost usually

Correct AnswerverifiedShow Answer

One important characteristic of all marginal cost curves is that ________.

Correct AnswerverifiedShow Answer

The following figure shows the impact of technological change on the marginal cost of producing a certain good. With MC1 the total cost of producing Q* units is equal to _______.

Correct AnswerverifiedShow Answer

Technological progress _______________.

Correct AnswerverifiedShow Answer

Refer to Table 3.0. At a price of $3.00, how many cups of coffee would this individual consume?

Correct AnswerverifiedShow Answer

Dina's willingness to pay for a scooter rental depends on her

Correct AnswerverifiedShow Answer

Marginal willingness to pay ____________.

Correct AnswerverifiedShow Answer

As long as marginal willingness is _________, total willingness will _________.

Correct AnswerverifiedShow Answer

In the following figure the marginal cost of producing the 500th unit of output is ________.

Correct AnswerverifiedShow Answer

Dina's total willingness to pay for 15 rides is

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The following figure shows the impact of technological change on the marginal cost of producing a certain good. With MC₁ the total cost of producing Q* units is equal to _______.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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As long as marginal willingness is _, total willingness will _.

Correct Answer
verified

In the following figure the marginal cost of producing the 500^th unit of output is ________.

Correct Answer
verified

Correct Answer
verified