1. According to the principle of diminishing returns, if the number of workers is increased beyond the point of diminishing returns, then the additional worker:
a. Increase total output by the same amount as previous workers
b. increase total output by more than the amount of previous workers. (this is my answer)
c. increases total output by less than the amount of previous workers
d. decreases total output.
2. The marginal principle implies that an individual implies that an individual should produce or consume where:
a. marginal benefit exceeds marginal cost
b. marginal benefit is less that marginal cost
c. marginal benefit equals marginal cost (my answer)
d. total benefit equals total cost
3. When the price of apples goes up:
a. the demand for apples will decrease, ceteris paribus
b. the demand for apples will increase, ceteris paribus
c. the quantity of apples demanded will decrease, ceteris paribus ( my answer)
d. the quantity of apples demanded will increase, ceteris paribus
4. The quantity supplied of hot dogs is 200 at the unit price of $3.50. Suppose the price elasticity of supply by the initial value method is 2, and you would like to induce sellers to increase the quantity of hot dogs supplied to 220. Then the new price must be: please show work
a. $1.50
b. $2.00 ( my answer)
c. $2.50
d. $3.00
8. What is the most likely reason that milk sold in convenience stores is more expensive that milk sold in grocery stores?
a. Convenience stores sell milk in smaller packages, so the per gallon packaging costs are higher
b. Grocery stores by in bulk, while convenience stores buy milk in smaller quantities
c. people who buy milk at convenience stores tend to have less elastic demand for milk (my answer)
d. convenience store owners are greedier than grocery store owners.