Texts: Use the following to answer questions (18-20)
Suppose the demand for the book entitled "Economics: How I Learned to Live in a Nonsatiated World" by the author H. Economicus is given by: Q = 1000 - 5P, where Q is the quantity demanded of this book and P is its price.
[18]
At what price is the total revenue from this book maximized?
A. $200
B. $100
C. $50
D. $80
[61] The maximum value of total revenue is
A. $50,000
B. $20,000
C. $75,000
D. $80,000
[20] As the price increases from $50 to $80, the associated price elasticity of demand (using the arc formula) is closest in value to:
A. -
B. 1
C. 2
D. 3
[21] Suppose a business produces a product for which the demand is perfectly inelastic everywhere along the demand curve. Accordingly, interested in maximizing its profit, this firm should:
A. decrease its price.
B. set a price equal to zero.
C. increase its price.
D. none of the above.
[22] In spending all of her income on wine and cheese, a consumer finds that the marginal utility of the last bottle of wine is 15, the marginal utility of the last pound of cheese is 8. The price of a bottle of wine is $10, and the price of a pound of cheese is $4. If she now wants to maximize her total utility, which of the following should she buy?
A. more wine and less cheese
B. more cheese and less wine
C. more wine and more cheese
D. less cheese and less wine
[23] When marginal product is falling, it must be that:
A. either A or B are possible.