ECON 212 Exam 3 || WITH COMPLETE SOLUTIONS!!
utility correct answers measure of personal satisfaction
util correct answers hypothetical unit of utility
marginal utility correct answers good or service is the change in total utility generated by
consuming one additional unit of that good or service
marginal utility curve correct answers shows how marginal utility depends on the quantity of
a good or service consumed
principle of diminishing marginal utility correct answers each successive unit of a good or
service consumed adds less to total utility than does the previous unit
budget constraint correct answers limits the cost of a consumers bundle to no more than the
consumer's income
consumption posibilities correct answers the set of a ll consumption bundles that are
affordable given the consumers income and prevailing prices
budget line correct answers shows the consumption bundles available to a consumer who
spends all of his or her income
optimal consumption bundle correct answers the consumption bundle that maximizes the
consumer's total utility given his or her budget constraint
marginal utility per dollar correct answers spent on a good or service is the additional utility
from spending one more dollar on that good or service
optimal consumption rule correct answers in order to maximize utility, a consumer must
equate the marginal utility per dollar spend on each good and service in the consumption
bundle
production function correct answers the relationship between the quantity of inputs a firm
uses and the quantity of output it produces
fixed input correct answers quantity fixed for a period of time and cannot be varied
variable input correct answers quantity the firm can vary at any time
long run correct answers time period in which all inputs can be varied
short run correct answers time period in which at least one input is fixed
total production curve correct answers how the quantity of output depends on the quantity of
the variable input, for a given quantity of the fixed input
marginal product correct answers input is the additional quantity of the output produced by
using one more unit of that input
utility correct answers measure of personal satisfaction
util correct answers hypothetical unit of utility
marginal utility correct answers good or service is the change in total utility generated by
consuming one additional unit of that good or service
marginal utility curve correct answers shows how marginal utility depends on the quantity of
a good or service consumed
principle of diminishing marginal utility correct answers each successive unit of a good or
service consumed adds less to total utility than does the previous unit
budget constraint correct answers limits the cost of a consumers bundle to no more than the
consumer's income
consumption posibilities correct answers the set of a ll consumption bundles that are
affordable given the consumers income and prevailing prices
budget line correct answers shows the consumption bundles available to a consumer who
spends all of his or her income
optimal consumption bundle correct answers the consumption bundle that maximizes the
consumer's total utility given his or her budget constraint
marginal utility per dollar correct answers spent on a good or service is the additional utility
from spending one more dollar on that good or service
optimal consumption rule correct answers in order to maximize utility, a consumer must
equate the marginal utility per dollar spend on each good and service in the consumption
bundle
production function correct answers the relationship between the quantity of inputs a firm
uses and the quantity of output it produces
fixed input correct answers quantity fixed for a period of time and cannot be varied
variable input correct answers quantity the firm can vary at any time
long run correct answers time period in which all inputs can be varied
short run correct answers time period in which at least one input is fixed
total production curve correct answers how the quantity of output depends on the quantity of
the variable input, for a given quantity of the fixed input
marginal product correct answers input is the additional quantity of the output produced by
using one more unit of that input
