CLEP Microeconomics chapter practice4 questions

32 Formula Mastery

These questions come directly from the chapter practice in the book. Choose the best answer, check your reasoning, and use the explanation to correct any gap.

Question 1

Question 1 of 4

A theater's revenue moves from 1,200 to 1,440 when attendance rises from 50 to 70. Across those additional admissions, revenue added per seat is

Revenue increases by 240 over 20 units, so MR=240/20=12 per unit.
Show answer and explanation

D. $12

Revenue increases by 240 over 20 units, so MR=240/20=12 per unit.

Question 2

Question 2 of 4

A firm's total revenue is 4,800 and total cost is 4,200. Output is 120 units. Which pair is correct?

Profit is 4,800-4,200=600, and ATC=4,200/120=35.
Show answer and explanation

B. Profit 600; average total cost 35

Profit is 4,800-4,200=600, and ATC=4,200/120=35.

Question 3

Question 3 of 4

A consumer's marginal utility from good X is 36 and its price is 6. Marginal utility from good Y is 28 and its price is 7. Which good provides more marginal utility per dollar?

Good X provides 6 utils per dollar, while Y provides 4. Spending should shift toward X at the margin.
Show answer and explanation

A. X, because 36/6>28/7

Good X provides 6 utils per dollar, while Y provides 4. Spending should shift toward X at the margin.

Question 4

Question 4 of 4

The midpoint price elasticity of demand uses average price and average quantity in the denominators primarily to

Averaging the endpoints creates a symmetric percentage base, avoiding different results from reversing the direction of measurement.
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E. make elasticity the same in either direction

Averaging the endpoints creates a symmetric percentage base, avoiding different results from reversing the direction of measurement.

Quiz complete