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BUEC 1000 Lecture Notes - Lecture 2: Marginal Utility, Marginal Cost, Demand Curve

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School
York University
Department
Business Economics
Course
BUEC 1000
Professor
Sharif Khan

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Document Summary

Econ 1000 quiz 1 reviewer (chapter 2 and 3) Marginal benefit: the benefit that a person receives from consuming one more unit of a good or service. It measured as the maximum amount that a person is willing to pay for one more unit of good or service. Marginal benefit curve: a curve that shows the relationship between the marginal benefit of a good and the quantity of that good. Marginal cost: the opportunity cost of producing one more unit of a good or service. It is calculated as the increase in total cost divided by the increase in output. Allocative efficiency: a situation in which goods and services are produced at the lowest possible cost and in the quantities that provide the greatest possible benefit. We cannot produce more of any good without giving up some of another good that we value more highly.

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Related Questions

Marginal benefit is the benefit that a person receives from consuming:
A) one more unit of a good or service.
B) a good or service until the person has grown tired of it.
C) only goods and services that are free.
D) all of the possible units of a good or service that can be consumed.
E) one more unit of a good and is equal to the cost of producing the unit of the .

1. the marginal cost curve is

A. Downward sloping to reflect the bowed out PPF.

B. Downward sloping as marginal benefits increase.

C. Upward sloping because marginal cost falls as more of a good or service is produced.

D. Upward sloping to reflect the increasing opportunity cost of producing one more unit.

E. U-shaped to reflect the bowed out PPF.

2. Allocative efficiency occurs

A. Anywhere inside or on the production possibilities frontier.

B. When the total cost of production is minimized

C. At all points on the production possibilities frontier.

D. At only one point on the production possibilities frontier.

E. At the points where the production possibilities frontier crosses the horizontal or vertical axis.

3. Auditors working for a large accounting firm are often away from the office. When they are in the office, they are allowed to use any desk that is available. Which method is used to allocate desks?

A. lottery

B. first-come, first-served

C. Command

D. Contest

E. Sharing equally


4. The marginal cost of a good or service

A. Can be calculated from the marginal benefit of that good or service.

B. decreases as more of the good or service is produced.

C. Can be derived from the production possibilities frontier.

D. Graphs as a positively sloped curve, so it cannot be derived from the production possibilities frontier, which is downward sloping.

E. None of the above answers is correct.

5. The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

A. Marginal benefit.

B. Total benefit.

C. Marginal cost

D. Total cost.

E. Price.

Consider Marginal Cost and​ Price, and choose the best statement.

a. The price of one more unit of a good or service is its marginal cost.

b. The marginal cost of producing one more unit of a good or service is equal to the marginal benefit.

c. The cost of producing one more unit of a good or service is its marginal cost and we measure the marginal cost as the area above the supply curve and below the market price.

d. The cost of producing one more unit of a good or service is its marginal cost, which is the minimum price that producers must receive to induce them to offer to sell another unit of the good or service.