Question

Expert PLZ STOP IF YOU ARE ONE OF THOSE WHO DOES NOT ANSWERING 6 QUESTIONS . Let someone else take it. If you are one of the generous , you will get thump up and great comments.

1. One characteristic of "utils" is that

Group of answer choices

utils are not subjective to an individual.

you can't compare the level of utils between different people.

utils are measured consistently from person to person.

5 utils to me means the same thing as 5 utils to you.

2. As a general rule, utility-maximizing choices between consumption goods occur where the:

Group of answer choices

combined marginal utilities of the goods is the highest.

marginal utility divided by price for one good is equal to the marginal utility divided by price for the other good.

combined marginal utilities of the goods is the lowest.

higher-income households have the greatest satisfaction.

3. Suppose each semester you have at most $350 to spend on taking an elective course. Your options are a literature course which costs $300 or a creative writing course which costs $200. Your marginal utility for taking the literature course next semester is 1,500 and your marginal utility for taking the creative writing course next semester is 1,200. That means, next semester

Group of answer choices

you will take both courses.

you will not have a clear choice between the two courses.

you will choose to take the literature course.

you will choose to take the creative writing course.

4. A normal good is a product:

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that has an upward sloping demand curve.

for which demand decreases as income decreases.

for which there is no demand.

for which demand decreases as income increases.

5.If a firm's marginal cost curve is crossing its average cost curve, then that firm has reached its _____.

Group of answer choices

marginal point

opportunity margin

shutdown point

break even point

6. A manufacturer would likely make an _____ a market in response to _____.

Group of answer choices

exit from; a sustained pattern of losses

exit from; an incentive to add to profits

entry to; a sustained pattern of profits

economic profit in; a sustained pattern of losses

Answer 1

Question: One characteristic of "utils" is that:

Answer: you can't compare the level of utils between different people. This is because levels of utility is subjective to each individual.The idea of 10 utils is meaningless in and of itself, and the factors that influence the number might vary widely from one consumer to the next. If another consumer gives bananas a util value of 15, it doesn't necessarily mean that he likes bananas 50% than the first consumer. The implication is that there is no way to compare utility between consumers.

Question: As a general rule, utility-maximizing choices between consumption goods occur where the:

Answer: marginal utility divided by price for one good is equal to the marginal utility divided by price for the other good. This follows from the definiton of utility maximization rule. Utility Maximization Rule. MUx/Px = MUy/Py, where MUx is the marginal utility derived from good x, Px is the price of good x, MUy is the marginal utility of good y and Py is the price of good y. A consumer should spend his limited money income on the goods which give him the most marginal utility per dollar.

Question: Suppose each semester you have at most $350 to spend on taking an elective course. Your options are a literature course which costs $300 or a creative writing course which costs $200. Your marginal utility for taking the literature course next semester is 1,500 and your marginal utility for taking the creative writing course next semester is 1,200. That means, next semester:

Answer: you will choose to take the creative writing course. Marginal utility per dollar for literature course = (1500/300) = 5. Marginal utility per dollar for creative writing course = (1200/200) = 6. A consumer should spend his limited money income on the goods which give him the most marginal utility per dollar.

Question: A normal good is a product:

Answer: for which demand decreases as income decreases. This is the definiton of normal good.

Question: If a firm's marginal cost curve is crossing its average cost curve, then that firm has reached its _____.

Answer: Breakeven point.

Question: A manufacturer would likely make an _____ a market in response to _____.

Answer: exit from; a sustained pattern of losses

Each firm has a set of fixed costs which it has to pay irrespective of the quantity sold. In case of a sustained losses, it becomes more and more difficult to pay these and hence it would have to exit.