Question 1

In general, as the consumption of a good or service increases, the marginal benefit from consuming that good or service

Accepted Answer

As consumption of a good or service increases, the additional benefit or satisfaction that a consumer derives from each additional unit consumed tends to decrease. This is known as the law of diminishing marginal utility, which states that the marginal benefit from consuming a good or service decreases as the quantity consumed increases. Therefore, the correct answer is C, as the marginal benefit decreases as consumption increases.

Question 2

-The figure above shows Diane's demand curve for soft drinks. The price of a soft drink is $1.00. Diane's total benefit from consuming 15 soft drinks is

Accepted Answer

The total benefit is the area under the demand curve up to the quantity consumed. If the demand curve is linear, the total benefit can be calculated as the area of a triangle plus a rectangle. The exact calculation would depend on the specific demand curve provided in the figure.

Question 3

Which of the following describes the economic meanings of cost and price?

Accepted Answer

Cost refers to the resources that must be given up to produce a good, including monetary expenses, time, and opportunity costs. Price refers to the amount of money that a seller receives when the good is sold. While they are related concepts, they have distinct meanings.

Question 4

-Bill and Krista sell potted plants from a roadside stand. The figure above shows Bill and Krista's marginal cost curve and the market price. If Bill and Krista sell 60 plants per week, their producer surplus from the 60th plant will equal

Accepted Answer

The producer surplus from the 60th plant is the difference between the market price and the marginal cost of producing that plant. Since the marginal cost curve intersects the market price at the 60th plant, the producer surplus for that plant is $0.

Question 5

Producer surplus definitely exists when the

Accepted Answer

Producer surplus exists when the price at which producers are willing to sell a good or service is less than the price they actually receive, meaning the price exceeds the marginal cost of production. This difference represents the surplus or extra benefit producers receive.

Question 6

Suppose the price of a scooter is $200 and Zoe is willing to pay $250. Zoe's

Accepted Answer

Consumer surplus is the difference between what a consumer is willing to pay for a good and what the consumer actually pays. In this case, Zoe is willing to pay $250 but only has to pay $200, so her consumer surplus is $250 - $200 = $50.

Question 7

The supply curve of a good or service is the same as

Accepted Answer

The supply curve shows the relationship between the quantity of a good or service that sellers are willing and able to offer for sale at each price, holding all else constant. This is the same as the marginal cost curve, which represents the additional cost of producing one more unit of output. As the price of the good or service increases, producers are willing to supply more, but at a higher cost, represented by a higher point on the marginal cost curve. Therefore, the supply curve is the same as the marginal cost curve.

Question 8

The price of a hat is $100. Willie can produce a hat at a marginal cost of $130, Waylon can produce at a marginal cost of $100, and Merle can produce at a marginal cost of $85. Which of the following statements is correct?

Accepted Answer

The answer of The price of a hat is $100....

Question 9

-In the above figure, what is the marginal cost of the 4th pizza?

Accepted Answer

Marginal cost refers to the cost of producing one additional unit of a good. In this case, the cost of producing the 4th pizza is $9 more than the cost of producing the 3rd pizza.

Question 10

If the price is greater than the marginal cost of producing a good, the seller has

Accepted Answer

If the price is greater than the marginal cost of producing a good, the seller has some producer surplus from the sale. This is the difference between the price the seller receives and the cost of production, and represents the additional profit that the seller gains from producing and selling the good. A and B are incorrect as the seller in this case is not experiencing a loss or no benefit. D is incorrect as negative consumer surplus would not be present in this scenario.

Question 11

Hester owns an ice cream shop. It costs her $2 per cone to make 10 ice cream cones. If she sells 10 cones for $4 each, her producer surplus on the 10 cones is equal to

Accepted Answer

Hester's cost to make 10 cones is $2 per cone, which is a total of $20 for all 10 cones. If she sells the 10 cones for $4 each, she will make a total revenue of $40. Her producer surplus is the difference between her revenue and her cost, so it is $40 - $20 = $20. Therefore, the best choice is E.

Question 12

The supply curve is upward sloping because of

Accepted Answer

The supply curve is upward sloping because of increasing marginal cost. As output increases, firms must incur higher production costs which causes the supply curve to slope upwards.

Question 13

-The figure above shows the supply curve for soft drink. The market price is $1.00 per soft drink. The producer surplus from the 10,000th soft drink is

Accepted Answer

Producer surplus is the difference between the market price and the minimum price at which a producer is willing to sell. If the supply curve indicates that the minimum price for the 10,000th soft drink is $0.50, and the market price is $1.00, the producer surplus is $0.50.

Question 14

The cost of producing one more unit of a good or service is equal to its

Accepted Answer

The cost of producing one more unit of a good or service is referred to as the marginal cost. It is the increase in total cost that arises from producing an additional unit of output.

Question 15

-In the figure above, the equilibrium market price is $20. The producer surplus is shown by the area

Accepted Answer

The answer of 
-In the figure above, the equilibrium market...

Question 16

The producer surplus of making and selling 10 chairs is found by

Accepted Answer

Producer surplus is the difference between the selling price and the cost of production. To find the producer surplus of making and selling 10 chairs, we need to calculate the difference between the selling price and the marginal cost for each chair and then sum these differences for all 10 chairs. By doing so, we will get the total producer surplus for making and selling 10 chairs.

Question 17

-The figure above shows the supply curve for soft drink. The market price is $1.00 per soft drink. The producer surplus from all the soft drinks sold is

Accepted Answer

The answer of 
-The figure above shows the supply curve...

Question 18

A supply curve shows quantities supplied at various prices. It also shows the

Accepted Answer

A supply curve shows the quantities supplied at various prices, and also the marginal cost of production. Marginal cost is the additional cost of producing an extra unit of output, and it is reflected in the upward slope of the supply curve. As prices increase, producers are willing to supply more of a good, but at a higher cost. Therefore, the supply curve shows the relationship between the price of a good and the cost of producing that good.

Question 19

-In the figure above, the equilibrium market price is $20. Area A is the

Accepted Answer