Carolyn spends her income on popular magazines and music CDs. If the price of CD
ID: 1210700 • Letter: C
Question
Carolyn spends her income on popular magazines and music CDs. If the price of CD is four times the price of a magazine and if Carolyn is maximizing her utility, she buys both goods until the marginal utility of the last CD purchased is four times the marginal utility of the last magazines purchases. both goods until the marginally utility of the last magazine purchased is four times the marginal utility of the last CD purchased. four times as much magazines as CDs. four times as much CDs as magazines. The relationship between the inputs employed by a firm and the maximum output that it can produce with those inputs is the firm's production function. supply curve, or supply schedule. marginal product of labor. average produce of labor. Goodyear's sales were negatively affected by the tariff on Chinese tires because Goodyear operates factories in China, and some of the tires produced there were exported to the United States and subject to the tariff. China retaliated and imposed a tariff on Goodyear tires exported to China. despite being a U.S. company, all of Goodyear's tires are produced in China. the tariff raised the price on Chinese tires, allowing these tires to complete more directly with the more expensive Goodyear tires. If the perfectly competitive apple farm's marginal revenue exceeds the marginal cost the last bushel of apples sold. What should the farm do the maximize its profit? determine what the total revenue and total cost of production are increase output decrease output lower its price to sell more For a perfectly competitive firm, average revenue is equal to marginal cost. the market price. total revenue. average fixed cost. Suppose the price of capital and labor remain constant but the average educational level of workers has increased and therefore, productivity of labor increases. This would lead a firm to adopt a more capital-intensive production technology. to adopt a more labor-intensive technology.Explanation / Answer
(7) Marginal utility of CD is 4 times marginal utility of magazine.
Reason: Utility is maximum when
MU of CD / Price of CD = MU of magazine / Price of magazine
(8) Production function is relation between inputs & output.
(9) Goodyear has operations in China & some of the tires produced there are exported to US, and are subject to tariff.
(10) If marginal revenue exceeds marginal cost, firm will increase output.
This is because if MR > MC, there is marginal profit & so profit can be higher if output is increased.
(11) Average revenue = Market price
(12) Adopt a more labor-intensive technology.