QUESTION 17 Another name for a consumer\'s willingness to pay is the o a limitin

Question

QUESTION 17 Another name for a consumer's willingness to pay is the o a limiting cost O b. maximum outlay O c. expense cap o d reservation price. e hidden budget. QUESTION 18 Should a firm always produce the level of output where marginal cost is lowest? o a. Yes. Any other level of output will have higher marginal cost O b. No. Firms should produce where marginal cost equals average variable cost c. No That is the level of output where employees are most efficient. o d. Yes. That is the level of output where costs are lowest Oe. No That might be the best choice, but it depends on the firm's profits. QUESTION 19 For a phenomenon to be investigated by means of experiments, he phenomenon must a. have observable effects. b have occurred in the past O c. be well understood O d. be quantitatively measurable. o e. involve human beings QUESTION 20 A local merchant raises the price of his good and finds that his total revenues increase. The demand for this good is O a. inelastic. o b. elastic oc perfectly elastic. o d unitary elastic e relatively price sensitive

Explanation / Answer

17. d, because it is the amount consumer is willing to pay for good .

18.b , efficient point us where Marginal Cost equals average variable cost .

19.d

20. a, because for inelastic goods price increase doesn't effect output much and thus total revenue increases.

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