3. Normative issues in economics involve

a. A judgment about what should be

b. A subjective valuation or process of valuation

c. Decisions about what one should do

d. All the above

4. In addition to the condition of transitivity, consumer’s utility function must

a. Rank various market baskets or be indifferent between market baskets

b. Have enough money to buy all desired market baskets

c. Consider only goods with increasing marginal utility

d. All the above

Individual homework (Коршиков м.)

Variant 7

1. Magnitudes of marginal utilities’ are done in the table.

Good	MU	Р
А	10	5
B	X	10
C	18	9

Find the marginal utility of food B in the point of consumer equilibrium.

2. Firm produces goods with the help of 3 workers. Average product of labour is 30 units per week. Wages of each worker is 60 doll. per week. Total fixed costs are 1000 doll. Labor is the only fixed input. Find average costs of the firm.

3. A change in the quantity purchased of a good (X) that is caused by a change in the price of the good (X) ceteris paribus is referred to as

a. A change in quantity demanded

b. A change in demand

c. A shift of the demand function

d. All the above

4. When considering a consumer’s indifference curves for two goods with positive utility (and not perfect compliments or substitutes), the curves will

a. Have a negative slope

b. Tend to be convex sets

c. Cannot intersect

d. All the above

Individual homework (Чепракова а.)

Variant 8

1. Total costs function of competitive firm is ТС = 6Q + 2Q². Find the result of entrepreneur activity if firm produces 25 units and sells them on 36 doll. per unit.

2. There are 500 firms in pure competition industry. Marginal costs of each firm depend on final output: if the case if output is 100 units per month – marginal costs are 25 doll., if output is 200 units – marginal costs are 30 doll., if output is 300 units – marginal costs are 35 doll., if output is 400 units – marginal costs are 40 doll. Find the total output of industry in the case if market price of production is 35 dollars.

3. The primary objective of an economic system is to

a. Maximize wealth in business activities

b. To optimize the welfare or well-being of the members of society

c. Maximize the output of all goods

d. Insure that businesses can be profitable enough to remain in operation

4. The “Marginal rate of Substitution” (mrs) can be perceived as the

a. Slope of the budget curve

b. The rate at which an individual is willing to trade one good for the other

(utility is neither increased or decreased)

c. Slope of the demand curve

d. All the above

Individual homework (Макаренко а.)

Variant 9

1. The income of consumer is 8 dol. The price of commodity A is 1 doll., the price of commodity B is 0,5 dol. Build the budget line of consumer.

2. Total costs function of monopoly is: ТС = 100 + 3Q, where Q - output (units) in a month; demand function on monopoly products is: Р = 200 - Q, where Р – price of production (doll.). Total output of monopoly is 19 units in a month. How will profit of monopoly change if firm increase its output to 20 units.