ECON 1580 Graded Quiz 1 Questions and Answers Already Passed Latest Update 2025-2026
At 36 units of labor, a firm finds that both average product of labor and marginal product of
labor equal 42. We can conclude that the average product curve at 36 units of labor is: -
Answers horizontal
Diminishing marginal returns for the first four units of a variable input is exhibited by the
marginal product sequence: - Answers 50, 40, 30, 20
Fixed costs include: - Answers op management salaries
If the slope of the total product curve is decreasing, the slope of the total variable cost curve is: -
Answers increasing
The marginal cost curve intersects the total variable cost curve at: - Answers no point; the
curves don't intersect
Average total cost is the ratio of: - Answers total cost to the quantity of output
If marginal cost is equal to average total cost, then: - Answers average total cost is at its
minimum
(Graph) In this exhibit (A Firm's Cost Curves) the curve labeled W represents the firm's _______
curve. - Answers average total cost
When an increase in the firm's output reduces its long-run average cost, it experiences: -
Answers economies of scale
The slope of a long-run average cost curve exhibiting diseconomies of scale is: - Answers
positive
Which of the following statements is false?
Select one:
a. The income effect of normal goods counters the substitution effect so the demand curve is
upsloping.
b. The income effect and the substitution effect reinforce each other when there are price
changes for a normal good.
c. The income effect represents the decrease in quantity demanded caused by the implicit
change in income due to a fall in the price of an inferior good but not for a normal good.
d. The substitution effect represents the change in quantity demanded solely due to a change in
the relative price of a good. - Answers The income effect of normal goods counters the
substitution effect so the demand curve is upsloping
, For a/an _______ good, an increase in income will lead to an increase in _______ . - Answers
normal; consumption
Assume that the total utilities for the fifth and sixth units of a good consumed are 83 and 97,
respectively. The marginal utility for the sixth unit is: - Answers 14
(TAble) In this exhibit (Consumer Equilibrium 1), assume that the price of good X is $2 per unit
and the price of good Y is $1 per unit, and you consume 3 units of good X and 3 units of good Y.
To maximize utility, assuming that the goods are divisible, you would consume: - Answers less
of X and more of Y
If the price of apples falls and the price of oranges remains constant:
Select one:
a. apples are now relatively cheaper.
b. the fall in the price of apples made consumers richer.
c. the fall in the price of apples, ceteris paribus, makes the marginal utility of apples divided by
their price exceed the marginal utility of oranges divided by their price.
d. all of the above statements are true. - Answers all of the above statements are true
The textbook states that the law of demand: - Answers is confirmed by our real-world
experience
An indifference curve shows combinations of two goods that yield: - Answers equal satisfaction
A curve that represents combinations of two goods that yield equal levels of satisfaction is a/an:
- Answers indifference curve
The marginal rate of substitution assumes that: - Answers satisfaction remains unchanged
If consumer income, preferences, and the prices of all other goods remain constant while the
price of X varies, the amount purchased of X is defined by the: - Answers demand curve
If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity
demanded does not change, this indicates that, if other things are unchanged, the price
elasticity of demand is: - Answers 0
If the price elasticity of demand is found to be -3/4, then demand is: - Answers price inelastic
If total revenue goes down when price falls, the price elasticity of demand is said to be: -
Answers price inelastic
The demand for agricultural output is price inelastic. This means that if farmers, taken
collectively, have a bumper crop, they will experience: - Answers lower prices, greater quantities
At 36 units of labor, a firm finds that both average product of labor and marginal product of
labor equal 42. We can conclude that the average product curve at 36 units of labor is: -
Answers horizontal
Diminishing marginal returns for the first four units of a variable input is exhibited by the
marginal product sequence: - Answers 50, 40, 30, 20
Fixed costs include: - Answers op management salaries
If the slope of the total product curve is decreasing, the slope of the total variable cost curve is: -
Answers increasing
The marginal cost curve intersects the total variable cost curve at: - Answers no point; the
curves don't intersect
Average total cost is the ratio of: - Answers total cost to the quantity of output
If marginal cost is equal to average total cost, then: - Answers average total cost is at its
minimum
(Graph) In this exhibit (A Firm's Cost Curves) the curve labeled W represents the firm's _______
curve. - Answers average total cost
When an increase in the firm's output reduces its long-run average cost, it experiences: -
Answers economies of scale
The slope of a long-run average cost curve exhibiting diseconomies of scale is: - Answers
positive
Which of the following statements is false?
Select one:
a. The income effect of normal goods counters the substitution effect so the demand curve is
upsloping.
b. The income effect and the substitution effect reinforce each other when there are price
changes for a normal good.
c. The income effect represents the decrease in quantity demanded caused by the implicit
change in income due to a fall in the price of an inferior good but not for a normal good.
d. The substitution effect represents the change in quantity demanded solely due to a change in
the relative price of a good. - Answers The income effect of normal goods counters the
substitution effect so the demand curve is upsloping
, For a/an _______ good, an increase in income will lead to an increase in _______ . - Answers
normal; consumption
Assume that the total utilities for the fifth and sixth units of a good consumed are 83 and 97,
respectively. The marginal utility for the sixth unit is: - Answers 14
(TAble) In this exhibit (Consumer Equilibrium 1), assume that the price of good X is $2 per unit
and the price of good Y is $1 per unit, and you consume 3 units of good X and 3 units of good Y.
To maximize utility, assuming that the goods are divisible, you would consume: - Answers less
of X and more of Y
If the price of apples falls and the price of oranges remains constant:
Select one:
a. apples are now relatively cheaper.
b. the fall in the price of apples made consumers richer.
c. the fall in the price of apples, ceteris paribus, makes the marginal utility of apples divided by
their price exceed the marginal utility of oranges divided by their price.
d. all of the above statements are true. - Answers all of the above statements are true
The textbook states that the law of demand: - Answers is confirmed by our real-world
experience
An indifference curve shows combinations of two goods that yield: - Answers equal satisfaction
A curve that represents combinations of two goods that yield equal levels of satisfaction is a/an:
- Answers indifference curve
The marginal rate of substitution assumes that: - Answers satisfaction remains unchanged
If consumer income, preferences, and the prices of all other goods remain constant while the
price of X varies, the amount purchased of X is defined by the: - Answers demand curve
If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity
demanded does not change, this indicates that, if other things are unchanged, the price
elasticity of demand is: - Answers 0
If the price elasticity of demand is found to be -3/4, then demand is: - Answers price inelastic
If total revenue goes down when price falls, the price elasticity of demand is said to be: -
Answers price inelastic
The demand for agricultural output is price inelastic. This means that if farmers, taken
collectively, have a bumper crop, they will experience: - Answers lower prices, greater quantities
