microeconomics final
C. the demand for the product is elastic in the 6-5 range
If a firm finds that it can sell $13,000 worth of a product when its price is $5 per unit and $11,000 worth of it when its price is $6, then: the demand for the product is inelastic in the $6-$5 price range. the demand for the product must have increased. the demand for the product is elastic in the $6-$5 price range. elasticity of demand is 0.74.
B. cause the firm's payroll to decline
If a firm's demand for labor is elastic, a union-negotiated wage increase will: cause the firm's total payroll to increase. cause the firm's total payroll to decline. cause a shortage of labor. necessarily be inflationary.
A. look for and pursue opportunities to increase their utility
When economists say that people act rationally in their self-interest, they mean that individuals: A.look for and pursue opportunities to increase their utility. B.generally disregard the interests of others. C.are mainly creatures of habit. D.are usually impulsive and unpredictable.
D. only
Which of the diagrams illustrates the effect of an increase in automobile worker wages on the market for automobiles? A only. B only. C only. D only.
B. positive and correct
"Economics is concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity." This statement is: A.positive but incorrect. B.positive and correct. C.normative but incorrect. D.normative and correct.
B. $4
(Advanced analysis) Answer the question on the basis of the following information. The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. Refer to the given information. If demand changed from P = 10 - .2Q to P = 7 - .3Q, the new equilibrium price is: $2. $4. $6. $7.
D. $106
(Advanced analysis) Answer the question on the basis of the following information. The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. Refer to the given information. If demand changed from P = 100 - 2Q to P = 130 - Q, the new equilibrium price is: $90. $110. $96. $106.
A.
(Consider This) In response to the terrorist attacks of September 11, 2001, the government decided to allocate more resources toward defense goods. The government's decision reflects their assessment that: A.the marginal benefits of additional defense goods outweighed the marginal cost. B.the marginal cost of additional defense goods outweighed the marginal benefit. C.there cannot be too many defense goods. D.civilian goods are not worth producing.
B.
(Consider This) Refer to the diagram. Suppose that point y represents the optimal combination of civilian goods and defense goods. We can conclude that at y the marginal benefit of defense goods: A.exceeds the marginal cost of defense goods. B.equals the marginal cost of defense goods. C.is zero. Dis negative.
C.
(Consider This) Refer to the diagram. The U.S. response to the events of September 11, 2001, is illustrated by the: A.shift of the production possibilities curve from CD to AB. B.shift of the production possibilities curve from AB to CD. C.move from x to y on production possibilities curve AB. D.move from y to x on production possibilities curve AB.
D.
(Last Word) If variables X and Y are positively correlated, this means that: A.X is the cause of Y. B.Y is the cause of X. C.causation necessarily exists, but we don't know whether X or Y is the cause. D.causation may or may not exist between X and Y.
D
(Last Word) The fallacy of composition is essentially the error of: omitting relevant variables in constructing a model. reasoning from the general to the particular. confusing cause and effect in economic relationships. generalizing from the particular to the general.
A. perfectly elastic
A demand curve that is parallel to the horizontal axis is: perfectly elastic. relatively inelastic. relatively elastic. perfectly inelastic.
c. more inelastic the demand for the product
A leftward shift in the supply curve of product X will increase equilibrium price to a greater extent the: more elastic the demand for the product. larger the elasticity of demand coefficient. more inelastic the demand for the product. more elastic the supply curve.
C. the demand for pizza is elastic about 5 and inelastic below 5
A manufacturer of frozen pizzas found that total revenue decreased when price was lowered from $5 to $4. It was also found that total revenue decreased when price was raised from $5 to $6. Thus, $5 is not the equilibrium price of pizza. the demand for pizza is inelastic above $5 and elastic below $5. the demand for pizza is elastic above $5 and inelastic below $5. the demand for pizza is elastic both above and below $5.
A.
A nation's production possibilities curve is bowed out from the origin because: A.resources are not generally equally efficient in producing every good. B.the originator of the idea drew it this way and modern economists follow this convention. C.resources are scarce. D.wants are virtually unlimited.
C.
A nation's production possibilities curve might shift to the left (inward) as a result of: A.technological advance. Bincreases in the size of the labor force. Cthe depletion of its soil fertility due to overplanting and overgrazing. Dinvesting in more capital goods.
C
A shift to the right in the demand curve for product A can be most reasonably explained by saying that: consumer incomes have declined, and consumers now want to buy less of A at each possible price. the price of A has increased and, as a result, consumers want to purchase less of it. consumer preferences have changed in favor of A so that they now want to buy more at each possible price. the price of A has declined and, as a result, consumers want to purchase more of it.
B.
A typical concave (bowed out from the origin) production possibilities curve implies: A.that economic resources are unlimited. B.that society must choose among various attainable combinations of goods. C..decreasing opportunity costs. D.that society is using a market system to allocate resources.
A. is a reality that underlies economic behavior
According to economists, economic self-interest: A.is a reality that underlies economic behavior. B.has the same meaning as selfishness. C.means that people never make wrong decisions. D.is usually self-defeating.
D. not accurately defined by any of these statements
An inferior good is: one whose demand curve will shift rightward as incomes rise. one whose price and quantity demanded vary directly. one that has not been approved by the Federal Food and Drug Administration. not accurately defined by any of these statements.
A.
Answer the question on the basis of the data given in the following production possibilities table: Refer to the table. As compared to production alternative D, the choice of alternative C would: A.tend to generate a more rapid growth rate. B.be unattainable. C.entail unemployment. D.tend to generate a slower growth rate.
C.
Answer the question on the basis of the data given in the following production possibilities table: Refer to the table. A total output of 3 units of capital goods and 4 units of consumer goods: A.is irrelevant because the economy is capable of producing a larger total output. B.will result in the maximum rate of growth available to this economy. C.would involve an inefficient use of the economy's scarce resources. D.is unobtainable in this economy.
D.
Any point inside the production possibilities curve indicates: A.the presence of technological change. B.that resources are imperfectly substitutable among alternative uses. C.the presence of inflationary pressures. D.that more output could be produced with the available resources.
A.
Assume an economy is incurring unemployment. The effect of resolving this problem will be to: A.move the level of actual output on to the economy's production possibilities curve. B.create a less equal distribution of income. C.shift its production possibilities curve to the left. D.shift its production possibilities curve to the right.
C. decrease, quantity demanded will increase and quantity supplied will decrease
Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will: decrease, quantity demanded will decrease, and quantity supplied will increase. decrease and quantity demanded and quantity supplied will both decrease. decrease, quantity demanded will increase, and quantity supplied will decrease. increase, quantity demanded will decrease, and quantity supplied will increase.
A.
Assume that a change in government policy results in greater production of both consumer goods and investment goods. We can conclude that: A.the economy was not employing all of its resources before the policy change. B.the economy's production possibilities curve has been shifted to the left as a result of the policy decision. C.this economy's production possibilities curve is convex (bowed inward) to the origin. D.the law of increasing opportunity costs does not apply in this society.
D. an increase in demand with no change in supply will result in an increase in sales
Assuming competitive markets with typical supply and demand curves, which of the following statements is correct? An increase in supply with a decrease in demand will result in an increase in price. An increase in supply with no change in demand will result in an increase in price. An increase in supply with no change in demand will result in a decline in sales. An increase in demand with no change in supply will result in an increase in sales.
B
Ben says that "an increase in the tax on beer will raise its price." Holly argues that "taxes should be increased on beer because college students drink too much." We can conclude that: A.Ben's statement is normative, but Holly's is positive. B.Holly's statement is normative, but Ben's is positive. C.Both statements are normative. D.Both statements are positive.
B.
Brinley says that "gas prices are rising because there aren't enough oil refineries." Katie argues that "gas prices are rising because of the growing demand for gasoline from China and India." We can conclude that: rev: 08_12_2014_QC_52366 A.Brinley's statement is positive; Katie's statement is normative. B.Brinley's statement is normative; Katie's statement is positive. C.Both statements are positive. D.Both statements are normative.
C. generalizations based on a careful observation of facts
Economic theories: A.are useless because they are not based on laboratory experimentation. B.that are true for individual economic units are never true for the economy as a whole. C.are generalizations based on a careful observation of facts. D.are abstractions and therefore of no application to real situations.
D
Economists use the term "demand" to refer to: a particular price-quantity combination on a stable demand curve. the total amount spent on a particular commodity over a fixed time period. an upsloping line on a graph that relates consumer purchases and product price. a schedule of various combinations of market prices and amounts/quantities demanded.
B. the price elasticity of demand for farm products is less than 1
Farmers often find that large bumper crops are associated with declines in their gross incomes. This suggests that: farm products are inferior goods. the price elasticity of demand for farm products is less than 1. farm products are normal goods. the price elasticity of demand for farm products is greater than 1.
A. increase equilibrium price and quantity
Given a downsloping demand curve and an upsloping supply curve for a product, an increase in the price of a substitute good (from the buyer's perspective) will: increase equilibrium price and quantity. decrease equilibrium price and quantity. increase equilibrium price and decrease equilibrium quantity. decrease equilibrium price and increase equilibrium quantity.
B.
If all discrimination in the United States were eliminated, the economy would: A.have a less concave production possibilities curve. B.produce at some point closer to its production possibilities curve. C.be able to produce at some point outside of its production possibilities curve. D.produce more consumer goods and fewer investment goods.
C.
If an economy is operating inside its production possibilities curve for consumer goods and capital goods, it: A.can only produce more consumer goods by producing fewer capital goods. B.can only produce more capital goods by producing fewer consumer goods. C.can produce more of both consumer goods and capital goods by using resources that are currently idle. D.must improve its technology to produce more output.
C. increase the quantity supplied of X and decrease the quantity demanded of X
If the demand and supply curves for product X are stable, a government-mandated increase in the price of X will: increase the supply of X and decrease the demand for X. increase the demand for X and decrease the supply of X. increase the quantity supplied of X and decrease the quantity demanded of X. decrease the quantity supplied of X and increase the quantity demanded of X.
A. decrease
If the demand for farm products is price inelastic, a good harvest will cause farm revenues to: decrease. either increase or decrease, depending on what happens to supply. increase. be unchanged.
A.
If the output of product X is such that marginal benefit equals marginal cost: A.the correct amount of resources is being allocated to X's production. B.the value of producing X exceeds the value of producing alternative products with the available resources. Cthere can be a net gain to society by allocating either more or less resources to producing X. D resources are overallocated to the production of X.
A. increase the quantity demanded by about 25 percent
If the price elasticity of demand for a product is 2.5, then a price cut from $2.00 to $1.80 will: increase the quantity demanded by about 25 percent. increase the quantity demanded by about 250 percent. decrease the quantity demanded by about 2.5 percent. increase the quantity demanded by about 2.5 percent.
B.
If the production possibilities curve is a straight line: A.the two products will sell at the same market prices. B.economic resources are perfectly substitutable between the production of the two products. C.the two products are equally important to consumers. D.equal quantities of the two products will be produced at each possible point on the curve.
A.
In moving along a given budget line: A.the prices of both products and money income are assumed to be constant. B.each point on the line will be equally satisfactory to consumers. C.money income varies, but the prices of the two goods are constant. D.the prices of both products are assumed to vary, but money income is constant.
D. decrease S, increase P, and decrease Q
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. Refer to the given information. An increase in the prices of resources used to produce X will: increase S, increase P, and increase Q. increase D, increase P, and increase Q. decrease S, decrease P, and decrease Q. decrease S, increase P, and decrease Q.
B. Prices rises and demand is inelastic
In which of the following cases will total revenue increase? Price falls and demand is inelastic. Price rises and demand is inelastic. Price rises and demand is elastic. Price falls and supply is elastic.
C. Price rises and demand is elastic
In which of the following instances will total revenue decline? Price rises and supply is elastic. Price falls and demand is elastic. Price rises and demand is elastic. Price rises and demand is inelastic.
C.
Last Word) The fallacy of composition states that: Abecause economic systems are composed of so many diverse economic units, economic laws are necessarily inexact. Bthe anticipation of a particular event can affect the composition of that event when it occurs. Cwhat is true for the individual must necessarily be true for the group. Dbecause event A precedes event B, A is necessarily the cause of B.
B.
Microeconomics is concerned with: A.the aggregate or total levels of income, employment, and output. B.a detailed examination of specific economic units that make up the economic system. C.positive economics, but not normative economics. D. the establishing of an overall view of the operation of the economic system.
B
Most demand curves are relatively elastic in the upper-left portion because the original price: and quantity from which the percentage changes in price and quantity are calculated are both small. from which the percentage price change is calculated is large and the original quantity from which the percentage change in quantity is calculated is small. and quantity from which the percentage changes in price and quantity are calculated are both large. from which the percentage price change is calculated is small and the original quantity from which the percentage change in quantity is calculated is large.
B. increases and demand decreases
One can say with certainty that equilibrium price will decline when supply: and demand both decrease. increases and demand decreases. decreases and demand increases. and demand both increase.
D
One reason that the quantity demanded of a good increases when its price falls is that the: price decline shifts the supply curve to the left. lower price shifts the demand curve to the left. lower price shifts the demand curve to the right. lower price increases the real incomes of buyers, enabling them to buy more.
C.
Other things equal, which of the following would shift an economy's production possibilities curve to the left? AThe discovery of a low-cost means of generating and storing solar energy. BThe entrance of more women into the labor force. C.A law requiring mandatory retirement from the labor force at age 55. DAn increase in the proportion of total output that consists of capital or investment goods.
C. relatively elastic
Other things the same, if a price change causes total revenue to change in the opposite direction, demand is: relatively inelastic. of unit elasticity. relatively elastic. perfectly inelastic.
B people weigh costs and benefits to make decisions
Purposeful behavior means that: A.people are selfish in their decision making. B.people weigh costs and benefits to make decisions. C.people are immune from emotions affecting their decisions. D.decision makers do not make mistakes when weighing costs and benefits.
d. decrease if demand were D2 only
Refer to the diagram and assume a single good. If the price of the good decreases from $6.30 to $5.70, consumer expenditure would: increase if demand were either D1 or D2. decrease if demand were D1 only. decrease if demand were either D1 or D2. decrease if demand were D2 only.
B. 1.2
Refer to the diagram and assume a single good. If the price of the good increased from $5.70 to $6.30 along D1, the price elasticity of demand along this portion of the demand curve would be: 0.8. 1.2. 1.0. 2.0.
B. .25 and demand is inelastic
Refer to the diagram and assume that price increases from $2 to $10. The coefficient of price elasticity of demand (midpoint formula) relating to this change in price is about: 1.5 and demand is elastic. .25 and demand is inelastic. 1 and demand is unit elastic. .67 and demand is inelastic.
C.
Refer to the diagram for athletic shoes. If the current output of shoes is Q3, then: Aresources are being allocated efficiently to the production of shoes. Bsociety would consider additional units of shoes to be more valuable than alternative products. Csociety would consider additional units of shoes to be less valuable than alternative products. Dsociety would experience a net gain by producing more shoes.
B. slope of the curve varies, but its elasticity is constant
Refer to the diagram, which is a rectangular hyperbola, that is, a curve such that each rectangle drawn from any point on the curve will be of identical area. In comparing the price elasticity and the slope of this demand curve, we can conclude that the: slope of a demand curve measures its elasticity. slope of the curve varies, but its elasticity is constant. slope and elasticity of the curve are both constant throughout. elasticity of a demand curve measures its slope.
price C
Refer to the diagram. A government-set price floor is best illustrated by: price A. quantity E. price C. price B.
A. D1 is more elastic than D2
Refer to the diagram. Between prices of $5.70 and $6.30: D1 is more elastic than D2. D2 is more elastic than D1. D2 is an inferior good and D1 is a normal good. D1 and D2 have identical elasticities.
B.falls from AB to bc and demand is inelastic
Refer to the diagram. If price falls from $10 to $2, total revenue: rises from A + B to A + B + D + C and demand is elastic. falls from A + B to B + C and demand is inelastic. rises from C + D to B + A and demand is elastic. falls from A + D to B + C and demand is inelastic.B
A.
Refer to the diagram. If society is currently producing 9 units of bicycles and 4 units of computers and it now decides to increase computer output to 6, the cost: A.will be 4 units of bicycles. B.will be 2 units of bicycles. C.will be zero because unemployed resources are available. D.of doing so cannot be determined from the information given.
A.
Refer to the diagram. Other things equal, which of the following positions relative to PP1 would be the most likely to result in a future production possibilities curve of PP3 rather than PP2? A. B. C. D.
C.
Refer to the diagram. Starting at point E, the production of successive units of bread will cost: A.a constant 8 units of tractors. B.a constant 6 units of tractors. C.1/8, 1/6, 1/4, and 1/2 units of tractors. D.1/2, 1/4, 1/6, and 1/8 units of tractors.
CD
Refer to the diagram. Technological advance in producing both capital goods and consumer goods is shown by the shift of the production possibilities curve from AB to: CD. EB. AF. GH.
AF
Refer to the diagram. Technological advance that is useful in producing consumer goods but not in producing capital goods is shown by the shift of the production possibilities curve from AB to: CD. EB. AF. GH.
B.
Refer to the diagram. The combination of computers and bicycles shown by point F: A.is unattainable given currently available resources and technology. B.is attainable but implies that the economy is not using all its resources. C.is irrelevant because it is inconsistent with consumer preferences. D.suggests that opportunity costs are constant.
D.
Refer to the diagram. This economy will experience unemployment if it produces at point: A. B. C. D.
D.
Refer to the diagram. Which of the following is a positive statement? A.A point inside the production possibilities curve is superior to a point on the curve because the former requires less work effort. B.Because any society should stress economic growth as its major goal, point D is superior to point C. C.Point B is preferable to point C because the ultimate goal of economic activity is to maximize consumption. D.Given its resources and technology, this society is incapable of simultaneously producing 3 units of tractors and 15 units of bread.
B.
Refer to the diagram. Which one of the following would shift the production possibilities curve from PP1 to PP2? A.Worsening of the AIDS epidemic. BImmigration of skilled workers into the economy. C.An increase in consumer prices. D.A reduction in hourly wages.
C.
Refer to the tables. Opportunity costs are: A.constant in both Duckistan and Herbania. B.larger in Duckistan than in Herbania. C.increasing in both Duckistan and Herbania. D.increasing in Duckistan and constant in Herbania.
C
Studies of the minimum wage suggest that the price elasticity of demand for teenage workers is relatively inelastic. This means that: the unemployment effect of an increase in the minimum wage would be relatively large. an increase in the minimum wage would decrease the total incomes of teenage workers as a group. an increase in the minimum wage would increase the total incomes of teenage workers as a group. the cross elasticity of demand between teenage and adult workers is positive and very large.
b
Studies show that the demand for gasoline is: price inelastic in the short run but elastic in the long run. price inelastic in both the short and long run. price elastic in the short run but inelastic in the long run. price elastic in both the short and long run.
C.
Suppose that Julia receives a $20 gift card for the local coffee shop, where she only buys lattes and muffins. If the price of a latte is $4 and the price of a muffin is $2, then we can conclude that Julia: A.should only buy muffins. B.should only buy lattes. C.can buy 5 lattes or 10 muffins if she chooses to buy only one of the two goods. D.can buy 5 lattes and 10 muffins with her $20 gift card.
C.
Suppose that Scoobania, which has full employment, can obtain 1 unit of capital goods by sacrificing 2 units of consumer goods domestically but can obtain 1 unit of capital goods from another country by trading 1 unit of consumer goods for it. This reality illustrates: A.a rightward (outward) shift of the production possibilities curve. B.increasing opportunity costs. C.achieving points beyond the production possibilities curve through international specialization and trade. D.productive efficiency.
1.37
Suppose that as the price of Y falls from $2.00 to $1.90, the quantity of Y demanded increases from 110 to 118. Then the absolute value of the price elasticity (midpoint method) is: rev: 10_21_2014_QC_57115, 11_04_2014_QC_57509 4.00. 2.09. 3.94. 1.37.
B. inelastic for price declines that increase quantity demanded from 6 units to 7 units
Suppose that the total revenue curve is derived from a particular linear demand curve. That demand curve must be: elastic for price increases that reduce quantity demanded from 8 units to 7 units. inelastic for price declines that increase quantity demanded from 6 units to 7 units. elastic for price declines that increase quantity demanded from 6 units to 7 units. inelastic for price increases that reduce quantity demanded from 4 units to 3 units.
b. w and y
Suppose the price elasticity coefficients of demand are 1.43, 0.67, 1.11, and 0.29 for products W, X, Y, and Z respectively. A 1 percent decrease in price will increase total revenue in the case(s) of: Z and W. W and Y. X and Z. Y and Z.
A. 1.2
Suppose the price of local cable TV service increased from $16.20 to $19.80 and as a result the number of cable subscribers decreased from 224,000 to 176,000. Along this portion of the demand curve, price elasticity of demand is: 1.2. 0.8. 8.0. 1.6.
d. elastic for price increases that reduce quantity from 4 units to 3 units
Suppose the total revenue curve is derived from a particular linear demand curve. That demand curve must be: elastic for price declines that increase quantity demanded from 5 units to 6 units. inelastic for price increases that reduce quantity demanded from 4 units to 3 units. inelastic for price declines that increase quantity demanded from 2 units to 3 units. elastic for price increases that reduce quantity demanded from 4 units to 3 units.
D
Suppose the total revenue curve is derived from a particular linear demand curve. That demand curve must be: inelastic for price declines that increase quantity demanded from 2 units to 3 units. elastic for price declines that increase quantity demanded from 5 units to 6 units. inelastic for price increases that reduce quantity demanded from 4 units to 3 units. unit elastic for price increases that reduce quantity demanded from 5 units to 4 units.
C. decreased by 7 percent
Suppose we find that the price elasticity of demand for a product is 3.5 when its price is increased by 2 percent. We can conclude that quantity demanded: decreased by 9 percent. decreased by 1.75 percent. decreased by 7 percent. increased by 7 percent.
A. does not apply to supply because price and total revenue always move together
The total revenue test for elasticity: does not apply to supply because price and total revenue always move together. does not apply to demand because price and quantity are inversely related. is equally applicable to both demand and supply. applies to the short-run supply curve but not to the long-run supply curve.
B. relatively price inelastic
The demand for a necessity whose cost is a small portion of one's total income is: perfectly price elastic. relatively price inelastic. perfectly price inelastic. relatively price elastic.
D. consumers are largely unresponsive to a per unit price change
The demand for a product is inelastic with respect to price if: a drop in price is accompanied by a decrease in the quantity demanded. the elasticity coefficient is greater than 1. a drop in price is accompanied by an increase in the quantity demanded. consumers are largely unresponsive to a per unit price change.
B. less price elastic than the demand for honda accords
The demand for autos is likely to be: more price elastic than the demand for Honda Accords. less price elastic than the demand for Honda Accords. perfectly inelastic. of the same price elasticity as the demand for Honda Accords.
D. normal goods
The demand for most products varies directly with changes in consumer incomes. Such products are known as: complementary goods. competitive goods. inferior goods. normal goods.
A
The diagram shows two product demand curves. On the basis of this diagram, we can say that: over range P1P2 price elasticity of demand is greater for D1 than for D2. over range P1P2 price elasticity is the same for the two demand curves. over range P1P2 price elasticity of demand is greater for D2 than for D1. not enough information is given to compare price elasticities.
B.
The economic perspective entails: A.irrational behavior by individuals and institutions. B.a comparison of marginal benefits and marginal costs in decision making. C.short-term but not long-term thinking. D.rejection of the scientific method.
B.
The economizing problem is one of deciding how to make the best use of: A.virtually unlimited resources to satisfy virtually unlimited wants. B.limited resources to satisfy virtually unlimited wants. C.unlimited resources to satisfy limited wants. D.limited resources to satisfy limited wants.
A.
The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that: A.the principle of increasing opportunity costs is relevant. B.society's resources are limited. C.the opportunity cost of producing each product is constant. D.resources are perfectly shiftable between alternative uses.
D.
The marginal benefit curve is: A.upsloping because of increasing marginal opportunity costs. B.upsloping because successive units of a specific product yield less and less extra benefit. C.downsloping because of increasing marginal opportunity costs. D.downsloping because successive units of a specific product yield less and less extra benefit.
B.
The output of MP3 players should be: A.reduced if marginal benefits exceed marginal costs. B.reduced if marginal costs exceed marginal benefits. C.increased if marginal costs exceed marginal benefits. D.reduced to zero if their unit costs exceed the unit costs of alternative products.
B. elastic in high price ranges and inelastic in low price ranges
The price elasticity of demand of a straight-line demand curve is: inelastic but does not change at various points on the curve. elastic in high-price ranges and inelastic in low-price ranges. 1 at all points on the curve. elastic but does not change at various points on the curve.
c. the supply of old baseball cards is price inelastic
The price of old baseball cards rises rapidly with increases in demand because: the supply of old baseball cards in price elastic. the demand for old baseball cards is price elastic. the supply of old baseball cards is price inelastic. the demand for old baseball cards is price inelastic.
D.
Which of the following generalizations is not correct? The larger the number of close substitutes available, the greater will be the price elasticity of demand for a particular product. The larger an item is in one's budget, the greater the price elasticity of demand. The price elasticity of demand is greater the longer the time period under consideration. The price elasticity of demand is greater for necessities than it is for luxuries.
D. the elasticity coefficient is less than one
Which of the following is not characteristic of the demand for a commodity that is elastic? Total revenue declines if price is increased. The relative change in quantity demanded is greater than the relative change in price. Buyers are relatively sensitive to price changes. The elasticity coefficient is less than one.
C.
Which of the following is not correct? A typical production possibilities curve: A.indicates how much of two products a society can produce. B.reveals how much each additional unit of one product will cost in terms of the other product. C.specifies how much of each product society should produce. D.indicates that to produce more of one product society must forgo larger and larger amounts of the other product.
C. national income grew by 2.7 percent last year
Which of the following statements pertains to macroeconomics? A.Because the minimum wage was raised, Mrs. Olsen decided to enter the labor force. B.A decline in the price of soybeans caused farmer Wanek to plant more land in wheat. C.National income grew by 2.7 percent last year. D.The Pumpkin Center State Bank increased its interest rate on consumer loans by 1 percentage point.
B.
Which of the following will enable a nation to obtain a combination of consumer goods and capital goods outside its production possibilities curve? A.Full employment. B.International specialization and trade. C.Full production. D.Productive efficiency.
D. increase equilibrium price and decrease equilibrium quantity
With a downsloping demand curve and an upsloping supply curve for a product, placing an excise tax on this product will: increase equilibrium price and quantity. decrease equilibrium price and quantity. decrease equilibrium price and increase equilibrium quantity. increase equilibrium price and decrease equilibrium quantity.
C. inelastic
f the University Chamber Music Society decides to raise ticket prices to provide more funds to finance concerts, the Society is assuming that the demand for tickets is: parallel to the horizontal axis. elastic. inelastic. shifting to the left.
A. relatively inelastic
igantic State University raises tuition for the purpose of increasing its revenue so that more faculty can be hired. GSU is assuming that the demand for education at GSU is: relatively inelastic. relatively elastic. decreasing. perfectly elastic.