52. Jason is trying to decide whether to buy a bagel or a muffin for breakfast. The bagel costs $0.50 and has a marginal utility of 5. The muffin costs $1 and has a marginal utility of 20. Which should he buy and why?
a. The muffin, because it has a higher marginal utility
b. The muffin, because it has a lower marginal utility
c. The bagel, because it costs less
d. The bagel, because it has a higher marginal utility per dollar
e. The muffin, because it has a higher marginal utility per dollar
53. Derek has $1 to spend at the grocery store. An apple, an orange, and a banana cost $0.50 each. If Derek's MUA/PA (ratio of marginal utility to price) of an apple is 45, MUO/PO of an orange is 38, and MUB/PB of a banana is 52, he will purchase a(n) _____ first and a(n) _____ second.
a. apple; orange
b. orange; apple
c. banana; orange
d. banana; apple
e. orange; banana
54. If an oligopolistic manufacturer believes that he faces a kinked demand curve for his product, he thinks his competitors will ____ if he lowers his price and ____ if he raises his price.
a. lower their prices; raise their prices.
b. lower their prices; not raise their prices
c. not lower their prices; raise their prices
d. not lower their prices; not raise their prices
55. At his current level of output, a monopolist has an MR of $10, an MC of $6, and an economic profit of zero. If the market demand curve is downward sloping and his marginal cost curve upward sloping, the monopolist
a. is producing his profit-maximizing level of output.
b. could increase his profit by increasing his output.
c. could increase his profit by increasing his price.
d. should exit the market if he has positive fixed cost.