Econ Ch. 6

If the supply of product X is perfectly elastic, an increase in the demand for it will increase: A)equilibrium quantity but equilibrium price will be unchanged. B)immediate market period, long run, and short run respectively C)equilibrium quantity but reduce equilibrium price D)equilibrium price but reduce equilibrium quantity

A

Refer to the information and assume the stadium capacity is 5000. If the Mudhens' management charge $7 per ticket: A)there will be 1000 open seats B) some fans that want to see the game will have seats that arent availvible C) there will be 2000 empty seats D) the game will be sold out

A

The price elasticity of supply measures how: A)responsive the quantity supplied of X is to changes in the price of X B)easily labor and capital can be substituted for one another the production process C)responsive the quantity supplied of Y is to changes in the price of X D) responsive quantity supplied is to a change in incomes

A

The supply of product X is elastic if the price of X rises by: A. 5 percent and quantity supplied rises by 7 percent. B. 8 percent and quantity supplied rises by 8 percent. C. 10 percent and quantity supplied remains the same. D. 7 percent and quantity supplied rises by 5 percent.

A

The Illinois Central Railroad once asked the Illinois Commerce Commission for permission to increase its commuter rates by 20 percent. The railroad argued that declining revenues made this rate increase essential. Opponents of the rate increase contended that the railroad's revenues would fall because of the rate hike. It can be concluded that:the railroad felt that the demand for passenger service was inelastic and opponents of the rate increase felt it was elastic. A)The railroad felt the demand for passenger service was elastic and opponents of the rate increase felt it was inelastic B)The railroad felt the demand for passenger service was inelastic and opponents of the rate increase felt it was elastic C)both groups felt that the demand was inelastic but for different resources D)both groups felt that the demand was elastic but for different resources

B

The demand for autos is likely to be: A)More price elastic than the demand for a Honda accord B)less price elastic than the demand for Honda Accords. C)of the same price elasticty D)Perfectly Inelastic

B

Which of the following is correct? A. If the demand for a product is inelastic, a change in price will cause total revenue to change in the opposite direction. B. If the demand for a product is inelastic, a change in price will cause total revenue to change in the same direction. C. If the demand for a product is inelastic, a change in price may cause total revenue to change in either the opposite or the same direction. D. The price elasticity coefficient applies to demand, but not to supply.

B

If the income elasticity of demand for lard is -3.00, this means that: A) Lard is a normal good B)more lard will be purchased when the price falls C)lard is an inferior good D)lard is a substitute for butter

C

The Diagram concerns supply adjustments to an increase in demand (D1-D2) in the immediate market period, short run, long run. Supply curves S1, S2,and S3 apply to the: A)short run, long run, and immediate market period respectively B)Immediate market, long run, and short run respectively C)Long run, Short run, and immediate market period respectively D)Immediate market, short run, and Long run respectively

C

The state legislature has cut Gigantic State University's appropriations. GSU's Board of Regents decides to increase tuition fees to compensate for the loss of revenue. The board is assuming that the: A)demand for education at GSU is elastic B)coefficient of price elasticity of demand for educational GSU is unity C)demand for education at GSU is inelastic D)coefficient of price elasticity of demand for educational GSU is greater than unity

C

Farmers often find that large bumper crops are associated with declines in their gross incomes. This suggests that: A)Farmers products are normal goods B)famers products are inferior goods C)the price elasticity of demand for farm products is greater than 1 D)the price elasticity of demand for farm products is less than 1

D

In which of the following instances will total revenue decline? A. price rises and supply is elastic B. price falls and demand is elastic C. price rises and demand is inelastic D. price rises and demand is elastic

D

The supply of product X is inelastic (but not perfectly inelastic) if the price of X rises by: A. 5 percent and quantity supplied rises by 7 percent. B. 8 percent and quantity supplied rises by 8 percent. C. 10 percent and quantity supplied remains the same. D. 7 percent and quantity supplied rises by 5 percent.

D

We would expect the cross elasticity of demand between Pepsi and Coke to be A) positive, indicating inferior goods B) negative, indicating substitute goods C)positive, indicating normal goods D)positive, indicating substitute goods

D