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Microeconomics — Test Answers

24 verified answers
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In economics, if a good is inelastic,

A
producers have lost an interest in manufacturing it.
B
consumers have lost an interest in purchasing it.
C
its supply or demand is too sensitive to price changes.
D
its supply or demand is not sensitive to price changes.
23
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According to the chart, the marginal revenue

A
falls to zero dollars as production increases.
B
remains the same as production increases.
C
increases by ten dollars as production increases.
D
decreases by ten dollars as production increases.
24

What most likely will happen if the pie maker continues to make additional pies?

A
The marginal costs will continue to rise, increasing the total cost, while the marginal revenue remains the same, decreasing the profit earned for each pie.
B
The marginal costs will continue to fall, decreasing the total cost, while the marginal revenue remains the same, decreasing the profit earned for each pie.
C
The marginal costs will continue to fall, decreasing the total cost, while the marginal revenue remains the same, increasing the profit earned for each pie.
D
The marginal costs will continue to rise, increasing the total cost, while the marginal revenue remains the same, increasing the profit earned for each pie.
25

All else being equal, which bakery has the absolute advantage?

A
Mrs. Track’s
B
Uncle John’s
C
Chips
D
The Bakeshop

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