Chapter 3
When a satellite television company gains a subscriber there is no impact on existing subscribers a. purely private good b. purely public good c. contestible public good d. excludable public good
d
Suppose a firm cannot figure out whether the demand for the good it sells is elastic or inelastic but discovers that every time it raises its price, its total revenue declines. Their a. demand is unit elastic b. demand is elastic c. demand is inelastic d. demand is perfectly inelastic
b
The elasticity of demand is related to the slope of the demand curve a. and only the slope of the demand curve b. but also the (price, quantity) position of the demand curve c. but also the slope of the supply curve d. and whether the good is normal or inferior
b
Policy makers have considered putting computer chips in cars that would allow tax collectors to charge people on the basis of how often they drive during rush hours. These policy makers are dealing with the fact that public roads are a. purely private good b. purely public good c. contestible public good d. excludable public good
c
Suppose you observe that minor changes in supply seem to cause dramatic changes in price. You would conclude that a. demand is unit elastic b. demand is elastic c. demand is inelastic d. demand is perfectly inelastic
c
When looking at the impact of change in trade policy economists use consumer and producer surplus to look at the winners and losers. Free-trade economists insist that a. no one loses b. everyone loses c. there are winners and losers but that the gain to the winners is greater than the loss to the losers d. there are winners and lowers but that the loss to the losers is greater than the gain to the winners
c
Combined, the consumer surplus and producer surplus at equilibrium is a. lower than it would be at prices below equilibrium b. lower than it would be at prices above equilibrium c. typically negative d. as big as it can get
d
If supply and demand are lines, then the equilibrium both consumer and producer surplus are a. equal b. shown as squares c. shown as trapezoids d. shown as triangles
d
The fact that the demand for eggs is inelastic should not surprise you because a. they are a very cheap food b. the demand for nearly all good products is inelastic c. the supply of eggs is inelastic
a