AGEC 105 Final Zhang

If the price elasticity of demand for Cheer detergent is -3.0, then a 12% drop leads to

A 36% rise in the quantity demanded

Who might study why wages for females are lower than for males in a particular labor market

A microeconomist

What characteristic is common to perfect competition, monopolistic competition, and monopoly?

firms maximize profits by producing where MR = MC

If the price of a substitute increased, a successful advertising campaign was launched, or income rose and the good in question is a normal good, what happens to the demand curve

it shifts to the right

Which of the following statements is not a characteristic of perfect competition?

limited entry to markets

The economic term for a firm that is the sole buyer in a market is:

monopsonist

A price elasticity of demand of -2 for a specific cola means that if the price increases 10 percent, the quantity demanded of the cola will decrease by 2 percent. True or False?

False

Own-price elasticity of demand for farm products is _____.

Inelastic

The term "real" as opposed to "nominal" means that economists are making adjustments for

Inflation

If the price flexibility for Product A is -5, what would be the price change if an additional 3% of supply was added to the market?

Price would fall by 15%

Assume that for John Paxton, a soybean producer from Iowa, the only source of farm income is from the production of soybeans. Paxton produced 100,000 bushels of soybeans in 2009, receiving $12 per bushel. Assuming this producer had production expenses of $800,000, and assuming the CPI for 2009 was 2.00, what was his real net farm income for 2009?

$200,000

If own price elasticity is -5, then price flexibility is

-0.2

Suppose that Trey spends all of his income on vacation trips and textbooks. If the price of a trip is $200 and the price of a textbook is $50, then the slope of his budget line (assuming vacation trips are measured on the vertical axis) would be

-0.25

Suppose when price of ketchup increases by 1%, the demand of French fries decreases by 0.5%. What is the cross price elasticity for French fries demand with respect to the price of ketchup.

-0.50

Suppose own price elasticity of demand for Product A is -0.2. What is the price flexibility

-5

Suppose that the own-price elasticity for Maytag blue cheese is -1.2. So a 10 percent increase in price yields a______ % decrease in quantity demanded of Maytag blue cheese. The demand is_(elastic/inelastic)___. For manufacturers of Maytag blue cheese to increase sales revenue, they should raise price. TRUE or FALSE. _____

12, elastic, False

What is an applied social science that deals with how producers, consumers, and societies use scarce resources in the food and fiber sector.

Agricultural Economics

If the income elasticity of demand is negative, this means that the good is

An inferior good

Law of Diminishing Marginal Returns states that

As successive units of a variable input are added to a production process with the other inputs held constant, the marginal physical product eventually declines

In microeconomics, the ___________ shows how the quantity demanded of a good or service changes as the consumer's income level changes.

Engel Curve

The government agency within the U.S. Department of Agriculture (USDA) that makes nonrecourse loans to farmers for the purpose of supporting prices at a specified level is the

Commodity Credit Corporation

Suppose when price of ketchup increases by 1%, the demand of French fries decreases by 0.5%. What is the demand relationship between French fries and ketchup

Complements

What are the social costs of monopolies referred to?

Deadweight loss

Total cost is

Fixed cost plus variable cost

What type of graph deals with levels of satisfaction between two commodoties

Isoutility or Indifference Curves

Suppose a local bookstore notices that a 2 percent increase in book prices leads to a 2 percent decrease in the number of books sold. What is the effect on sales revenue.

It doesn't change

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries. How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?

It would increase the opportunity cost of becoming a broadcaster.

Which of the following statements is not a characteristic of perfect competition?

Limited entry to markets

A monopolist that does not price discriminate will set the output level where

MR = MC

What branch of economics is concerned with interest rates and the gross domestic product (GDP) of the U.S. economy?

Macroeconomics

The change in total utility arising from a one-unit increase in consumption of a good is referred to as

Marginal utility

Which market structure best characterizes the following: there exists product differentiation, and there are many sellers?

Monopolistic competition

The U.S corn supply for 1988 and 2008 are given below: ​​Year ​​Corn Supply (million bushels)​ Price/Bushel ​​1988​​​ 10,000​​​​ $4.00​ ​​2008​​​ 14,000​​​​ $5.00 Letting 1988 be the base year, calculate the output index and price index for 2008. What is the relative change in corn supply?

Output index for 2008 is 1.4. 40%

Most resources are best suited for a particular use. For example, climate and other conditions in Florida allow resources to be used in orange production in lieu of wheat or potato production. What economic concept deals with this issue?

Specialization

The relationship among land, fertilizer and sorghum production is technically referred to as the

Total Physical Production

The own-price elasticity of demand measures the responsiveness of quantity demanded to changes in price. True or False?

True

True or False. Real values refer to values for which adjustments to inflation have been made.

True

Under government intervention, the TARGET PRICE is always ABOVE the LOAN RATE.

True

Which of the following does not describe the real roots of the farm problem?

Underproduction of farm products

. Which of the following is (are) true about monopolistic competition? ​List all that apply. ​(a) There is product differentiation. ​(b) There a few sellers. ​(c) The food retailing industry is an example of this market structure. ​(d) No firm can influence market prices.

b and c

​The fact that travel on buses fell as incomes increased in many cities suggests that

bus travel is an inferior good

A substitute good is one that

can be used in place of another good, fulfilling the same basic purpose

An increase in the price of a good results in a(n)

decrease in quantity demanded

Assume that for a given customer, the marginal utility of Ben & Jerry's Ice Cream is 160, and the price of Ben & Jerry's is $5 per gallon. Also assume that the marginal utility of Blue Bell Cream is 120, and the price of Blue Bell is $4 per gallon. This consumer:

should buy more Ben & Jerry's.

If at one point MUH/PH > MUT/PT, this consumer

should buy more of product H

Markets converge to equilibrium over time unless other events in the economy occur. One explanation for this adjustment which makes sense in agriculture is

the Cobweb theory.

Economics

the study of choice under conditions of scarcity