1. A honey producer has fixed costs of $3000 and total variable costs of $2000 per week. Currently the business is producing 500 jars of honey per week. Which of the following statements is true for this business?

Select one:

a.

the average variable cost is $50

b.

the average fixed cost is rising

c.

the total cost is $5500

d.

the average total cost is $10

2. Caitlin would be willing to pay $130 to see The Lion King musical but buys a ticket for only $50. Caitlin values the performance at:

Select one:

a.

$130

b.

$0

c.

$50

d.

$80

3. Suppose the price of product X is increased from $8 to $10 and as a result, the quantity of X demanded decreases from 1500 to 1000. Using the midpoint method, the price elasticity of demand for X in the given price range is:

Select one:

a.

2.00

b.

1.25

c.

1.80

d.

0.4