True False Economic questions?
1.If two people had identical demand curves, but one was able to purchase at a lower price than the other, the one facing the lower price would receive more consumer surplus?
2.A subsidy in an industry would be likely to increase the consumer surplus for buyers in that industry and increase the producer surplus for sellers in that industry?
3. other things equal, a price ceiling will increase consumer surplus by allowing customers to buy more at a lower price.
4. the law of diminishing marginal utility is consistent with the consumer behavior that produces a negatively sloped demand curve.
5.at consumer equilibrium income is allocated to purchases so that the ratio of marginal utility to price is equal for different goods.
6.an individual's level of utility is based on fulfillment of needs as opposed to wants.
7.when a person's income doubles, her consumption of each good will double in order for her to stay in consumer equilibrium.
8.utility theory is an efficient tool in making interpersonal utility comparisons.
9.in consumer equilibrium, one dollar's worth of additional gasoline will yield the same marginal utility as one dollar's worth of additional cheese.
10. an economic profit of zero indicates a satisfactory situation for the firm.
11.one would expect to observe a diminishing marginal product of labor when crowded office space reduces the productivity of new workers.
12.in the long run, firms can vary all inputs in the production process.
13.if a firm experiences economies of scale, the average total cost of production increases as output expands.
14.in the long run, a perfectly competitive firm is expected to generate either an economic profit or an economic loss.
15.the market demand curve in a perfectly competitive industry is horizontal, while the demand curve faced by an individual perfectly competitive firm is downward sloping.
16.a firm that is earning zero economic profits has a strong incentive to exit the industry.
17.if price is less than the average variable cost, firms that seek to maximize profit should shut down.
18.in long run equilibrium, a perfectly competitive firm produces the output level that minimizes average total cost.
19.in order to maximize profits, a firm should produce the level of output at which total revenue is maximized.
20.the behavior of an individual perfectly competitive firm has a perceptible influence on the market price.
21.in a constant cost industry, the cost curves of individual firms will shift upward as the industry output expands.