13. If the price of bread rises, then in the market for a complement such as a.
ID: 1128156 • Letter: 1
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13. If the price of bread rises, then in the market for a complement such as a. Supply shifts to the left (decreases) Demand shifts to the left (decreases). Demand shifts to the right (increases). c. d. 14. Suppose X and Y are perfect substitutes and the MRS- dY dx-1. If income is m and prices satisfy p Y aracterizes the optimal consumption bundle? d. Cannot be determined 15. The a the minimum amount of money a consumer would accept to voluntarily accept the price increase. b. the maximum amount of money a consumer would pay to avoid the price increase. e. the change in consumer surplus resulting from a price increase d. the change in utility resulting from the increase in price. 16. A monopolist produces at a point where the price elasticity of demand is -0.8 and the marginal cost is S6. If you were hired to advise this monopolist on how to increase his profits, you would find that the way to increase his profits is to a. increase his output b. lower the price c. decrease his output. d. produce the output level where marginal cost equals price. e. increase his advertising efforts. 17. Michael prefers lattes to mochas and frappes to lattes. If he prefers mochas to frappes, which of the assumptions underlying the theory of consumer behavior are violated. a. Completeness b. Transitivity c. Monotonicity d. All of the above. 18. The average cost to produce 50 cookies is $0.30 per cookie. The marginal cost is constant at $0.15 for all cookies produced. The total cost to produce 40 cookies is: a. $7 b. $8.50 c. $13.50 d. $18 19. When the isocost line is tangent to the isoquant, then a. MRTS- wr b. the firm is producing that level of output at minimum cost dollar spent on capital yields as much extra output as the last dollar spent on labor d. All of the above.Explanation / Answer
Answer:- if the price of bread rises, then in the market for a complement such as butter
Correct Answer:- Demand shifts to the left
Reason:- When the price of the product increases, the demand of complement also reduces
Answer:- the compensating variation for an increase in the price of a good is
Correct Answer:- the change in utility resulting from the increase in price
Answer 16:- The correct option is:- produce the output level where marginal cost equals price
Reason:- For profit maximization, MR=MC
Answer 17:-The correct option is:- Transitivity
Reason:- Rule of transitivity states that If A=B=C I.E.A=C
Answer 18:- the correct Answer is:- 18
Reason_ Cost of production =($0.3+$0.15)*40=$18
Answer 19:- when the isocost line is tangent to the isoquant then
Correct Answer:- All of the above
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