ECON 203 quiz/test
If a decrease in the price of movie tickets increases the total revenue theaters, is evidence that demand is A. perfectly inelastic B. unit elastic with respect to price C. price inelastic D. price elastic
D
If demand is price elastic, a price change in either direction (up or down) causes A. no change in quantity B. no changes in total revenue C. a change in total revenue in the same direction D. a change in total revenue in the opposite direction
D
On a diagram of a PPF, opportunity cost is represented by A. a point on the horizontal axis B. a point on the vertical axis C. a ray through the origin D. the slope of the PPF
D
A PPF is more likely to bow outward if A. not all resources are equally productive (are specialized) in all activities B. consumers prefer about equal amounts of the good produced C. entrepreneurial talent is more abundant than human capital D. resources are used inefficiently
A
Elasticity refers to the A. responsiveness of quantity demanded or surpluses to changes in the price of a good B. minimum amount that consumers will pay for a percentage change in quantity demanded or supplied C. percentage decrease in price in response to a percentage increase in income D. percentage increase in price in response to a percentage increase in quantity demanded
A
If a 5% reduction in the price of a good produces a 3% increase in the quantity demanded, the elasticity of demand over the price range is A. inelastic B. unit elastic C. infinitely elastic D. elastic
A
If two goods are compliments, they're A. cross elasticity in price and a decrease in quantity B. cross elasticity of demand is positive C. income elasticity of demand in negative D. income elasticity of demand is positive
A
a technological improvement is represented by A. an outward shift of the PPF B. an inward shift of the PPF C. a movement up along the PPF D. a movement down along the PPF
A
Which of the following would NOT shift the demand curve for turkey? A. an increase in income B. a decrease in the price of ham C. a change in tastes for turkey D. a change in the price of turkey
B
A shop increases the price of candles from $.75 to $1.25 and finds that the quantity of candles it sells per month drops from 3,000 to 1,000. T he elasticity of demand value for candles in this price range is approximately A. 0.50 B. 2.00 C 3.00 D 0.75
B
Given two points A (0,20) and B (10,0) ; the equation of the line that passes through these two points is A. y= x + 20 B. y= -2x + 20 C. y= 2x -20 D. y= 2x + 10
B
Opportunity cost is A. the best choice that can be made B. the best alternative forgone C. the monetary cost D. the indirect cost
B
When a public transit system such as a subway or bus line raises its fares, it usually experiences an increase in gross receipts. This is evidence that demand is A. unit elastic B. inelastic C. elastic D. perfectly elastic
B
a production possibility frontier does NOT illustrate A. scarcity B. monetary exchange C. opportunity cost D. attainable and unattainable points
B
an improvement in a firm's technology that improves productivity is likely to result in a(n) A. downward movement along the supply curve B. willingness to supply a larger quantity than before at any given price (supply shift to right) C. upward movement along the supply curve D. leftward shift of the supply surve
B
assuming that the equilibrium price for a good is $5. If the current market price is $4, a A. surplus will cause the price to rise toward $5 B. shortage will cause the price to rise toward $5 C. surplus will cause the price to remain $4 D. shortage will cause the price to remain at $4
B
A change in the price of a good A. shifts the demand curve and causes a movement along it B. shifts the demand curve but does not cause a movement along it C. does not shift the demand curve but does cause a movement along it D. neither shifts the demand curve nor causes a movement along it
C
Assuming that demand and supply for a good have both increased in the same population, the new equilibrium point would represent A. no change in price and a decrease in quantity B. a decrease in price and increase in quantity C. no change in price and an increase in quantity D. an increase in price and an increase in quantity
C
In rejecting a call for a reduction in the price of textbooks, the president of a major publisher says, "Lowering the price won't sell a single additional book." She seems to believe that the price elasticity of demand for textbooks is A. infinitely elastic B. unit elastic C. perfectly inelastic D. perfectly elastic
C
Output combination inside a PPF A. are unattainable B. are attainable only with the full utilization of all resources C. are associated with unused resources D. result in more rapid growth
C
When the PPF bows outward from the origin, A. some of society's resources are unemployed B. opportunity costs are constant C. opportunity costs are increasing D. opportunity costs are decreasing
C
Which is the following best represents the effect of a decrease in the price of coffee, ceteris paribus? A. an upward movement along the demand curve for coffee B. a rightward shift in the demand curve for coffee C. a downward movement along the demand curve for coffee D. a leftward shift in the demand curve for coffee
C
A horizontal demand curve is said to be A. unit inelastic B. unit elastic C. perfectly inelastic D. perfectly elastic
D
Assuming that automobiles are a normal good, a rise in consumer income, other things being equal, will cause A. an upward movement along the demand curve for automobiles B. a downward movement along the demand curve for automobiles C. the demand curve for automobiles to shift to the right D. the demand curve for automobiles to shift to the left
D
Other things being equal, the price elasticity of demand for a product will be less: A. if there are few or no substitutes available B. if a small portion of the budget will be spent on it C. in the short-run than in the long-run D. all of the above
D
The PPF shows that quantity of A. a good produced on the vertical axes and the number of workers employed on the horizontal B. a good produced on the horizontal axis and the price on the vertical C. a good produced on the vertical axis and the quantity of capital stock used on the horizontal D. one good produced on the vertical axis and the quantity of another good produces on the horizontal
D
The fallacy of composition is the false statement A. the theory is necessary to better understand the real world B. that models can be normative in nature C. that people's free will make prediction impossible D. that what is true for the whole must be necessarily true for its parts
D
Which of the following will not shift the demand curve for television sets? A. an increase in the price of cable service (a complement) B. an increase in the price of radios (a substitute) C. an increase in consumer income D. an increase in the price of television sets
D
You are on a committee that is considering ways to raise money for your college athletic program. You would recommend increasing the price of football tickets only if you thought demand for the tickets was A. perfectly elastic B. unit elastic C. elastic D. inelastic
D
the Production Possibilities Frontier (PPF) will shift inward as a result of A. an increase in the production of consumption goods B. an increase in Research and Development (R&D) expenditure C. an increase in population D. destruction of part of the nations' capital stock (ex. Wars, natural disasters)
D
