Download 1. Consider a market in which quantity demanded is 10,000 units

ECON 2100 (Summer 2009 – Section 04)
Quiz #3
Name _A. Key_______________________
Multiple Choice Questions: (2 points each)
1.
Consider a market in which quantity demanded is 10,000 units when price is $15.00 per unit.
Suppose that an increase in supply causes price in this market to decrease to $14.00. As a result
of this change in equilibrium price, Total Consumers’ Surplus would:
D.
increase by more than $10,000.
2.
Suppose that the income elasticity of demand for margarine is equal to (-0.20). Observing this
value allows one to directly infer that
C.
an increase in consumer income would lead to a decrease in demand for margarine.
3.
A “Production Possibilities Frontier”
A.
graphically illustrates the combinations of output that a society can produce, given the
currently available resources and production technology.
4.
If a firm made an Economic Profit of $225,000 last year, then the Accounting Profit of the firm
A.
must have been greater than $225,000.
5.
Bob manages a company that makes hats. When producing 5,000 units of output, the company
has “Average Total Costs” of $4.95 and “Average Variable Costs” of $3.80. From this
information, it follows that
C.
“Average Fixed Costs” of producing 5,000 hats must be equal to $1.15.