micro old tests review

if the estimated price elasticity of demand for foreign travel is 4 then:

a 20% decrease in the price of foreign travel will increase quantity demanded by 5%

which of the following is most likely to shift the supply of milk to the right? The bankruptcy of many small dairy farms removal of milk subsidies that had previously been given to dairy farmers. A decrease in the price of feed given to dairy cows. An increase in household income and milk is a normal good a tax on each gallon of milk produced.

a decrease in the price of feed given to dairy cows

a new wonder diet that results in a dramatic loss of weight sweeps through America. The key to the diet is to eat unlimited amounts of red meat (beef) but no poultry (chicken). As millions of Americans switch to the new diet, we can expect:

an increase in the demand for beef, leading to a shift to the right in the demand curve for beef and higher beef prices.

a decrease in the price of a good will result in

an increase in the quantity demanded along a given demand curve

if the demand for gold is price-inelastic and your local public golf course increases the green fees for using the course you would xpect

an increase in the total revenue recieved the course

Jessica experienced an increase in her income by 10% this year. In the same year, Jessica's quantity demanded of milk increased by 10% and her quantity demanded for bread increased by 5%. This means that for jessica:

both milk and bread are normal goods

price controls

can result in inequitable outcomes

we note that when the price of pretzels increases, the demand for tortilla chips decreases. These two goods are:

complementary goods

a negative relationship between the quantity demanded and price is called the law of:

demand

a consumer is attempting to maximize utility in her consumptio of Goods A and B. if her income and the price of good A do not change, but the price of Good B decreases, this will

increase the marginal utility per dollar spent on Good B

there is one gas station in a small rural town. the owner of the station claims that he will sell the same quantity of gas, no matter how high or low the price. If he is correct in this assertion, what must be true about the demand curve for gas at his station?

it must be vertical with a price elasticity of 0

suppose the price elasticity of demand for fishing lures equals 1 in South Carolina and 0.63 in Alabama. To increase revenue fishing lure manufacturers should:

leave prices unchanged in South Carolina and raise prices in Alabama

a price ceiling is actually the line that is _______ on the graph

lower

the amount by which an additional unit of a good or service increases a consumer's total utility, all other things unchanged is:

marginal utitlity

according to the substitution affect, a decrease in the price of a product leads to an increase in the quantity of the product demanded because buyers

purchase more of the relatively less expensive good