Units of Good X Marginal Utility Good X 20 16 12 Units of Good Y Marginal Utilit

Question

Units of Good X Marginal Utility Good X 20 16 12 Units of Good Y Marginal Utility Good Y 12 10 6 12. (Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of good Xis $5 per unit, the price of good Yis $1 per unit, and you have $10 to spend on both goods. To maximize utility, you would consume unit(s) orrand unit(s) of Y A) no; 1 B) 1:5 C) 4;6 D) 5; 5 13. When a fine caterer produces 30 catered meals, its marginal cost and average variable $10 ahd its average variable cost is cost each equal $10. Therefore, assuming normally shaped cost curves, at 29 meals its marginal cost is A) more than; less than B) less than; more than C) more than; more that D) equal to; equal to $10 14. The larger the output, the more variable input required to produce additional units. effect, this leads to a average cost. Called the A) spreading: lower; fixed B) spreading: higher; fixed C) diminishing returns; lower; variable D) diminishing returns; higher; variable You run a business producing picture frames. This month your total cost of production is $10,000, your variable cost of production is $6,000, and you produce 3,000 picture 15. frames. It follows that averagec cost is A) variable; $2 B) total; $3 C) total; S1 D) fixed; $1

Explanation / Answer

Ans)

12.
B)1;5
5x+y=10
5(1)+5=10

13.

is less than; more than
This because MC equals AVC at the minimum point of the AVC.

14.

A)Spreading; lower; fixed

since AFC=FC/Q a rise in the quantity of unit produced would lead to a larger AFC.

15.
A)variable;2
TC=10000
VC=6000
Q=3000

AVC=VC/Q=6000/3000=2

Units of X Mux MUx/Px Units of Y Muy Muy/Py Mux/Px=Muy/Py 1 20 4 1 12 12 (1,5) 2 16 3.2 2 10 10 3 12 2.4 3 8 8 4 8 1.6 4 6 6 5 4 0.8 5 4 4 6 0 0 6 2 2

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