Set 15

----------------- is the entire satisfaction one derives from consuming goods or
services:
1. Total utility
2. Scarcity
3. Marginal utility
4. Rationing
The law of diminishing marginal utility states that:
1. As consumer consumes more and more units of any commodity, the
  utility that consumer derives from each additional unit falls
2. As consumer consumes more and more units of any commodity, the utility that consumer derives from each additional unit rises
3. As consumer consumes more and more units of any commodity, the utility that consum er derives from each additional unit remains the same
4. As consumer consumes less and less units of any commodity, the utility
  that consum er derives from each additional unit falls
The equi-marginal principle states that
1. MUa = MUb = MUc = ---------------------------=MUn A.
  Pa Pb Pc
2. MUa > MUb > MUc > ---------------------------> MUn B.
  Pa Pb Pc
3. MUa < MUb < MUc < ---------------------------< MUn C.
  Pa Pb Pc
4. None of the given options
Marginal utility measures:
1. The slope of the indifference curve A.
2. The additional satisfaction from consuming one more unit of a good
3. The slope of the budget line
4. The marginal rate of substitution
----------------- is the difference between willingness to pay and what the
consumer actually has to pay:
1. Total Utility
2. Consumer surplus
3. Producer surplus
4. Total product
-------------- is the ratio of the probability of success to the probability of
failure:
1. Input output ratio
2. Odds ratio
3. Price earning ratio
4. Price sales ratio
------------------- operate under the principle of law of large numbers:
1. Banks
2. Insurance companies
3. Government sponsored enterprises
4. None of the given options
The optimum consumption point for the consumer is a point where:
1. The slopes of the indifference curve and budget line are equal
2. The slopes of the indifference curve and total product are equal
3. The slopes of the total utility curve and budget line are equal
4. The slopes of the total product curve and total utility curve are equal
A curve that represents all combinations of market baskets that provide the
same level of utility to a consumer is called:
1. A budget line
2. An isoquant
3. An indifference curve
4. A demand curve
The slope of an indifference curve reveals that:
1. The preferences are complete
2. The marginal rate of substitution of one good for anouther good
3. The ratio of market prices
4. That preferences are transitive
The law of diminishing returns applies to
1. The short run only
2. The long run only
3. Both the short and the long run
4. Neither the short nor the long run
In the long run:
1. All inputs are fixed
2. All inputs are variable
3. At least one input is variable and one input is fixed
4. At most one input is variable and one input is fixed
According to the law of diminishing returns
1. The total product of an input will eventually be negative
2. The total product of an input will eventually decline
3. The marginal product of an input will eventually be negative
4. The marginal product of an input will eventually decline
The slope of the total product curve is the
1. Average product
2. Slope of a line from the origin to the point
3. Marginal product
4. Marginal rate of technical substitution
The short run is
1. Less than a year
2. Three years
3. However long it takes to produce the planned output
4. A time period in which at least one input is fixed
The marginal product of an input is
1. Total product divided by the amount of the input used to produce this
  amount of output
2. The addition to total output that adds nothing to profit
3. The addition to total output due to the addition of one unit of all other
  inputs
4. The addit ion to total output due to the addition of the last unit of an input, holding all other inputs constant
Average product is defined as:
1. Total product divided by the total cost
2. Total product divided by marginal product
3. Total product divided by the variable input
4. Marginal product divided by the variable input
Marginal product crosses the horizontal axis (is equal to zero) at the point
where:
1. Average product is maximized
2. Total product is maximized
3. Diminishing returns set in
4. Output per worker reaches a maximum
The law of diminishing returns refers to diminishing
1. Total returns
2. Marginal returns
3. Average returns
4. All of the given options
The law of diminishing returns assumes that
1. There is at least one fixed input
2. All inputs are changed by the same percentage
3. Additional inputs are added in smaller and smaller increments
4. All inputs are held constant

Set 15

Quiz