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Homework answers / question archive / Toffee (bars) Cashews (bags) Units Marginal Total Marginal Total Utility Utility Utility Utility 1 10 10 12 12 2 8 18 10 22 3 5 23 7 29 4 3 26 5 34 5 1 27 2 36 6 0 27 1 37 TABLE 6-1 5) Refer to Table 6-1

Toffee (bars) Cashews (bags)

Units Marginal Total Marginal Total

Utility Utility Utility Utility

1 10 10 12 12

2 8 18 10 22

3 5 23 7 29

4 3 26 5 34

5 1 27 2 36

6 0 27 1 37

TABLE 6-1

5) Refer to Table 6-1. If the prices of both toffee bars and bags of cashews are both $1 and this consumer has $7 per week to spend on snacks, how many of each will he/she purchase?

A) 2 toffee bars and 5 bags of cashews.

B) 3 toffee bars and 4 bags of cashews.

C) 4 toffee bars and 3 bags of cashews.

D) 5 toffee bars and 2 bags of cashews.

E) 6 toffee bars and 1 bag of cashews.

6) Refer to Table 6-1. If the price of toffee bars is $1 each, bags of cashews are $2 each, and this consumer has $10 per week to spend on snacks, how many of each will he/she purchase?

A) 0 toffee bars and 5 bags of cashews.

B) 2 toffee bars and 4 bags of cashews.

C) 4 toffee bars and 3 bags of cashews.

D) 6 toffee bars and 2 bags of cashews.

E) 5 toffee bars and 0 bags of cashews.

7) Refer to Table 6-1. If the prices of both toffee bars and bags of cashews are both $1 and this consumer has $8 per week to spend on snacks, how many of each will he/she purchase?

A) 2 toffee bars and 6 bags of cashews.

B) 3 toffee bars and 5 bags of cashews.

C) 4 toffee bars and 4 bags of cashews.

D) 5 toffee bars and 3 bags of cashews.

E) 6 toffee bars and 2 bags of cashews.

8) Refer to Table 6-1. If the prices of both toffee bars and bags of cashews are $2 and this consumer has $10 per week to spend on snacks, what is the maximum total utility achievable?

A) 10.

B) 15.

C) 33.

D) 45.

E) 52.

The following data show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital. When answering the questions, you are to assume that the wage per unit of labour is $25 and the cost of the capital is $100.

TABLE 7-1

Labour per unit of time Total Output

0 0

1 25

2 75

3 175

4 250

5 305

15) Refer to Table 7-1. The marginal product of labour is at its maximum when the firm changes the amount of labour hired from

A) 0 to 1 unit.

B) 1 to 2 units.

C) 2 to 3 units.

D) 3 to 4 units.

E) 4 to 5 units.

16) Refer to Table 7-1. Diminishing marginal productivity of labour is first observed when the firm changes the amount of labour hired from

A) 0 to 1 unit.

B) 1 to 2 units.

C) 2 to 3 units.

D) 3 to 4 units.

E) 4 to 5 units.

17) Refer to Table 7-1. The average product of labour is highest when the firm hires ______ units of labour.

A) 1

B) 2

C) 3

D) 4

E) 5

18) Refer to Table 7-1. Average fixed costs for 305 units of output is approximately

A) 33 cents.

B) 41 cents.

C) 45 cents.

D) 74 cents.

E) 82 cents.

19) Refer to Table 7-1. Average variable costs for 175 units of output is approximately

A) 25 cents.

B) 32 cents.

C) 43 cents.

D) 57 cents.

E) $1.00.

20) Refer to Table 7-1. The average total cost for 250 units of output is approximately

A) 33 cents.

B) 40 cents.

C) 63 cents.

D) 80 cents.

E) $1.00.

21) Refer to Table 7-1. The change in average total cost associated with changing output from 175 to 250 units is approximately

A) 20 cents.

B) 33 cents.

C) 57 cents.

D) 80 cents.

E) $1.00.

22) Refer to Table 7-1. The total cost of producing 175 units of output is

A) $75.

B) $100.

C) $150.

D) $175.

E) $350.

23) Refer to Table 7-1. The total cost of producing 75 units of output is

A) $50.

B) $100.

C) $125.

D) $150.

E) $175.

24) Refer to Table 7-1. The total variable cost of producing 305 units of output is

A) $100.

B) $125.

C) $225.

D) $305.

E) $325.

25) Refer to Table 7-1. The total fixed cost of producing 305 units of output is

A) $100.

B) $125.

C) $112.50.

D) $225

E) $305.

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