If You Could Exactly Afford Either 2 Units of X

question 12

Multiple Choice

if you could exactly afford either 2 units of x and 11 units of y, or 4 units of x and 7 units of y, then if you spent all of your income on y, how many units of y could you buy?

• A)19
• B)15
• C)11
• D)6
• E)None of the above.

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Definitions:

Positive Economic Profit

The excess amount by which total revenue surpasses the total costs, including opportunity costs of production.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information.

ATC

Average Total Cost, which is the total cost per unit of output produced, calculated by dividing the total cost by the quantity of output.

Marginal Cost

Marginal cost refers to the additional total cost incurred from the production of an extra unit of a good or service.