Econ

The following table contains a demand schedule for a good. Price Quantity Demanded $10 100 $20 Q1 If the law of demand applies to this good, then Q1 could be a. 0. b. 100. c. 200. d. 400.

a. 0

Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. ​ Minutes Needed to Set Up 1 Computer Number of Computers Set Up or Tested in a 40-Hour Week Test 1 Computer Computers Set Up Computers Tested Barb 48 ? 50 40 Jim 30 40 80 60 Refer to Table 3-28. Barb's opportunity cost of setting up one computer is testing a. 4/5 computer and Jim's opportunity cost of setting up one computer is testing 3/4 computer. b. 4/5 computer and Jim's opportunity cost of setting up one computer is testing 4/3 computers. c. 5/4 computers and Jim's opportunity cost of setting up one computer is testing 3/4 computer. d. 5/4 computers and Jim's opportunity cost of setting up one computer is testing 4/3 computers.

a. 4/5 computer and Jim's opportunity cost of setting up one computer is testing 3/4 computer.

If the demand for textbooks is inelastic, then an increase in the price of textbooks will a. increase total revenue of textbook sellers. b. decrease total revenue of textbook sellers. c. not change total revenue of textbook sellers. d. There is not enough information to answer this question.

a. increase total revenue of textbook sellers.

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. Output Produced in One Day Coolers Radios Jamaica 12 6 Norway 24 3 Refer to Table 3-21. At which of the following prices would both Jamaica and Norway gain from trade with each other? a. 1 radio for 1 cooler b. 1 radio for 4 coolers c. 1 radio for 10 coolers d. Jamaica and Norway would both gain from trade at all of the above prices.

b. 1 radio for 4 coolers

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. Output Produced in One Day Coolers Radios Jamaica 12 6 Norway 24 3 Refer to Table 3-21. Assume that Jamaica and Norway each has 4 days available for production. Originally, each country divided its time equally between the production of coolers and radios. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of coolers increased by a. 12. b. 24. c. 36. d. 48.

b. 24

An advance in farm technology that results in an increased market supply is a. good for farmers because it raises prices for their products but bad for consumers because it raises prices consumers pay for food. b. bad for farmers because total revenue will fall but good for consumers because prices for food will fall. c. good for farmers because it raises prices for their products and also good for consumers because more output is available for consumption. d. bad for farmers because total revenue will fall and bad for consumers because farmers will raise the price of food to increase their total revenue.

b. bad for farmers because total revenue will fall but good for consumers because prices for food will fall.

When demand is unit elastic, price elasticity of demand equals a. 1, and total revenue and price move in the same direction. b. 1, and total revenue and price move in opposite directions. c. 1, and total revenue does not change when price changes. d. 0, and total revenue does not change when price changes.

c. 1, and total revenue does not change when price changes.

Scenario 5-3 Suppose that the supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10%. Refer to Scenario 5-3. The price elasticity of supply for bread could be a. -1. b. 0. c. 0.5. d. 1.5

d. 1.5

Suppose that when the price of ginger ale is $2 per bottle, firms can sell 4 million bottles. When the price of ginger ale is $3 per bottle, firms can sell 2 million bottles. Which of the following statements is true? a. The demand for ginger ale is income inelastic, so an increase in the price of ginger ale will increase the total revenue of ginger ale producers. b. The demand for ginger ale is income elastic, so an increase in the price of ginger ale will increase the total revenue of ginger ale producers. c. The demand for ginger ale is price inelastic, so an increase in the price of ginger ale will increase the total revenue of ginger ale producers. d. The demand for ginger ale is price elastic, so an increase in the price of ginger ale will decrease the total revenue of ginger ale producers.

d. The demand for ginger ale is price elastic, so an increase in the price of ginger ale will decrease the total revenue of ginger ale producers.

A movement upward and to the right along a supply curve is called a(n) a. increase in supply. b. decrease in supply. c. decrease in quantity supplied. d. increase in quantity supplied.

d. increase in quantity supplied.