ECON 2110 Exam 2 - Clemson University - Michael Zhao
236. Which of the following is most likely to increase the demand (i.e., shift the demand curve) for downtown parking? a. Improved bus service to the downtown area. b. Lower downtown parking fees. c. More downtown parking lots. d. Lower gasoline prices.
d. Lower gasoline prices.
192. How do buyers and seller coordinate their desires? a. Through market research. b. By talking together. c. By following the directions of government agencies. d. Through their independent effect on prices. e. They don't.
d. Through their independent effect on prices.
215. When you go to the supermarket you find that there is exactly the kind of deodorant you wanted on the shelf. This is because a. Safeway's managers have your best interests at heart. b. Safeway carried out an extensive survey. c. someone in the central planning office in Washington, D.C. told them to stock more deodorant. d. changes in price spurred by the actions of many different consumers indicate to Safeway the level of demand.
d. changes in price spurred by the actions of many different consumers indicate to Safeway the level of demand.
131. If a supplier can sell as much as it wants at $10 per unit, but none at all at $10.01, we know that the demand it faces is a. elastic b. inelastic c. unit elastic d. perfectly elastic e. perfectly inelastic.
d. perfectly elastic
A supply curve shows a.the relationship between price and quantity supplied. b.how many units of the good will be supplied at various prices. c.the cost of supplying the good. d.All of the above.
d.All of the above.
Doug likes tomatoes now more than he did last year. Therefore a.Doug must have received an increase in income. b.tomatoes must be a necessity. c.the supply of tomatoes has increased. d.Doug is willing to pay more for tomatoes than last year.
d.Doug is willing to pay more for tomatoes than last year.
82. If the supply of tea increases, what would we expect to happen in the market for coffee (a substitute)? a. Demand to increase. b. Demand to decrease. c. Supply to increase. d. Supply to decrease. e. Neither the demand nor the supply of tea would be affected.
b. Demand to decrease.
122. What would happen in the market for pens if both the price of ink (an input) and the price of pencil lead falls? (Hint: lead pencils are substitutes) (DRAW THE CURVES!) a. The equilibrium price would increase, but the impact on quantity would be uncertain. b. The equilibrium price would decrease, but the impact on quantity would be uncertain. c. Both equilibrium price and quantity would decrease. d. The equilibrium quantity would increase but the impact on price would be uncertain. e. The equilibrium quantity would decrease but the impact on price would be uncertain.
b. The equilibrium price would decrease, but the impact on quantity would be uncertain.
158. If the price of cattle feed falls, what happens to equilibrium price and quantity of beef? a. price rises, quantity falls. b. price falls and quantity rises. c. both price and quantity rise. d. both price and quantity fall. e. price falls, but the effect on quantity is uncertain.
b. price falls and quantity rises.
184. If you hear that a terrible frost has ravaged the California citrus crop, you would expect (draw the curves!) a. the equilibrium price and quantity of orange juice to rise. b. the equilibrium price of orange juice to rise and the quantity to fall. c. the equilibrium price of orange juice to fall and the quantity to rise. d. the equilibrium price and quantity of orange juice to fall. e. the equilibrium price of orange juice to rise but the effect on quantity to be uncertain.
b. the equilibrium price of orange juice to rise and the quantity to fall.
235. If there is excess demand for farm laborers, we would expect a. the wage paid to farm laborers to fall. b. the wage paid to farm laborers to rise. c. the prices of farm commodities to fall. d. an increase in the supply (i.e., a shift in the supply curve) of farm laborers. e. More than one of the above answers is correct.
b. the wage paid to farm laborers to rise.
Which of the following would make the demand for education at Clemson more elastic? a.An improvement in the quality of Clemson education. b.The founding of four more universities in South Carolina. c.A fall in the price of textbooks. d.A rise in local land prices.
b.The founding of four more universities in South Carolina.
If the supply of a good is absolutely fixed (like wine bottled in 1983) a.the supply curve will be horizontal. b.the supply will be vertical. c.the supply curve will slope downward. d.the good will have no supply curve.
b.the supply will be vertical.
67. For which of the following is demand likely to be the most elastic? a. Bread b. Sourdough bread c. BiLo's Wheat sourdough bread d. All will have equally elastic demand
c. BiLo's Wheat sourdough bread
97. The demand for potatoes tends to be less elastic than the demand for movies because a. potatoes have many good substitutes. b. many people don't like potatoes. c. movies have better and closer substitutes. d. given the choice, most people prefer potatoes to movies.
c. movies have better and closer substitutes.
92. Suppose you sell jewelry boxes, and a business consultant you have hired determines that demand for your product is elastic. If you want to increase your total revenue, you should therefore a. lower the price of your jewelry boxes. b. raise the price of your jewelry boxes. c. increase the supply of your jewelry boxes. d. lower your production costs.
a. lower the price of your jewelry boxes.
91. Demand for maple nut ice cream tends to be elastic because a. other flavors of ice cream are almost perfect substitutes. b. the market is very broadly defined. c. there are few close substitutes. d. it must be eaten quickly.
a. other flavors of ice cream are almost perfect substitutes.
166. A hurricane destroys half of California orange groves. What happens to the equilibrium price and quantity of orange juice? a. price rises, quantity falls. b. price falls and quantity rises. c. both price and quantity rise. d. both price and quantity fall. e. price falls, but the effect on quantity is uncertain.
a. price rises, quantity falls.
224. A "normal good" is a good for which a. quantity demanded rises when income rises. b. quantity demanded rises when price rises. c. quantity demanded falls when price rise. d. an increase in demand raises price. e. an increase in demand raises quantity.
a. quantity demanded rises when income rises.
243. If the price of a substitute for good X increases, then a. the demand for good X increases b. the price of good X falls c. the demand for good X decreases d. the demand for good X will not change
a. the demand for good X increases
217. What is the effect on the market for cherries? (Hint: consider whether the demand for cherries or the supply of cherries or both change) a. the equilibrium price increases; the equilibrium quantity increases. b. the equilibrium price increases; the equilibrium quantity decreases. c. the equilibrium price decreases; the equilibrium quantity increases. d. the equilibrium price decreases; the equilibrium quantity decreases. e. the equilibrium price decreases; there is not enough information to tell what happens to quantity.
a. the equilibrium price increases; the equilibrium quantity increases.
240. Good economic decisions are those for which a. the marginal benefits are greater than the marginal cost. b. the total benefits are greater than the total costs. c. the marginal costs are greater than the total costs. d. opportunity costs are less than marginal costs.
a. the marginal benefits are greater than the marginal cost.
228. When the price of a good or service changes, a. there is a movement along the demand curve. b. the demand curve shifts in the opposite direction. c. the demand curve shifts in the same direction. d. Any of the above, depending upon whether price increases or decreases.
a. there is a movement along the demand curve
249. When there is excess supply a. there is downward pressure on price b. there is upward pressure on price c. the market is in equilibrium d. there are too many buyers chasing too few goods e. a shortage will result
a. there is downward pressure on price
258. Which of the following is most likely to increase the demand for motorcycles? a. A fall in the price of motorcycle helmets. b. An increase in the price of motorcycle advertising. c. A fall in the price of motorcycles. d. All of the above.
a. A fall in the price of motorcycle helmets.
178. Which of the following will NOT increase the supply of titanium golf clubs? a. A rise in the demand for golf clubs. b. A fall in the price of titanium. c. An improvement in golf club making technology. d. All of the above will increase supply.
a. A rise in the demand for golf clubs.
110. Which of the following would not be expected to decrease the demand (shift the demand curve) for grape soda? a. An increase in the price of grape soda. b. A decrease in the price of orange soda. c. A fall in income (grape soda is a normal good). d. All of the above would decrease the demand for grape soda.
a. An increase in the price of grape soda.
79. What happens in the market for ink when the price of the lead used to make pencils rises? a. Demand increases. b. Demand decreases. c. Supply increases. d. Supply decreases. e. None of the above, because ink isn't used in lead.
a. Demand increases.
136. If a 10% increase in the price of beer reduces the quantity demanded by 8%, then demand for beer is a. Inelastic b. elastic c. unit elastic d. had increased e. had decreased
a. Inelastic
209. Which of the following will increase the supply of oranges? a. Terrific orange growing weather. b. The discovery that oranges cure cancer. c. An increase in the price of grapefruit (a substitute). d. All will increase the supply of oranges.
a. Terrific orange growing weather.
251. What would happen in the market for pizza in restaurants if the price of flour increased and the price of a meal in a Chinese restaurant increased? a. The equilibrium price of pizza would increase, but the impact on the amount of pizza sold would be uncertain b. The equilibrium price of pizza would decrease, but the impact on the amount of pizza sold would be uncertain c. Both equilibrium price and quantity of pizza would decrease d. The equilibrium quantity of pizza would increase but the impact on price would be uncertain e. The equilibrium quantity of pizza would decrease but the impact on price would be uncertain
a. The equilibrium price of pizza would increase, but the impact on the amount of pizza sold would be uncertain
163. What would happen in the market for skis if there is a lot of snow (which makes skiing more fun) but this also makes it more difficult to ship skis into town? (DRAW THE CURVES!) a. The equilibrium price would increase, but the impact on quantity would be uncertain. b. The equilibrium price would decrease, but the impact on quantity would be uncertain. c. Both equilibrium price and quantity would decrease. d. The equilibrium quantity would increase but the impact on price would be uncertain. e. The equilibrium quantity would decrease but the impact on price would be uncertain.
a. The equilibrium price would increase, but the impact on quantity would be uncertain.
189. Which of the following is least likely to shift the demand for the burrito that Moe's burrito shop sells? a. They hold a big burrito sale. b. A new formula that makes their burritos even more delicious. c. Chipotle (another burrito shop) increases its prices. d. Consumer income falls, and burritos are a normal good. e. All will shift the demand for the burrito Shop's burritos.
a. They hold a big burrito sale.
247. A demand curve is a. a generally downward-sloping line relating the price of a good with the quantity demanded b. a generally upward-sloping line relating the price of a good with the quantity demanded c. a curve that relates income and the price of substitutes d. just a and c
a. a generally downward-sloping line relating the price of a good with the quantity demanded
146. Which of the following will increase the quantity of brass key rings supplied? a. A rise in the demand for key rings. b. A rise in the price of brass. c. An improvement in key ring-making technology. d. All of the above. e. Just a and c.
e. Just a and c.
197. Suppose that now-illegal drugs are legalized, increasing both the supply and demand. We would expect (Draw the curves!) a. Price to go up and quantity to go down. b. Price to go down and quantity to go up c. Both price and quantity to go up. d. Price to go up, but the effect on quantity to be uncertain. e. Quantity to go up, but the effect on price to be uncertain.
e. Quantity to go up, but the effect on price to be uncertain.
160. A supply curve slopes upwards because a. an increase in price gives producers incentive to provide a larger quantity. b. an increase in input prices means supply increases. c. as more is produced, per unit production costs fall. d. the supply curve must intersect the demand curve.
a. an increase in price gives producers incentive to provide a larger quantity.
A frost that destroys half of Florida's orange crop will make orange growers unhappy only if a. demand for oranges is elastic b. demand for oranges is inelastic c. supply of oranges is elastic d. supply of oranges is inelastic
a. demand for oranges is elastic
134. If you drop your prices and total revenue increases, demand must be a. elastic b. inelastic c. unit elastic d. downward sloping, but there is not enough information to know the elasticity.
a. elastic
137. If the price of tickets to Chicago Bears games rises by 10% and the quantity demanded rises by 8%, we can conclude that demand for Bears tickets a. is elastic b. is inelastic c. is unit elastic d. has increased e. has decreased
d. has increased
237. The concept of opportunity cost suggests that the cost to airlines of allowing employees to fly for free a. depends on the alternatives available to the employees. b. is zero. c. depends on the value employees place on free travel. d. is greater at Christmas than in mid-February.
d. is greater at Christmas than in mid-February.
116. "Elasticity" measures the relationship between a. supply and demand. b. quantity supplied and quantity demanded. c. supply and closeness of substitutes. d. price and quantity. e. none of the above.
d. price and quantity.
226. If a new technology is developed that allows twice the soybeans to be grown at half the cost, and at the same time a new soybean drink becomes the hottest thing in town, we would expect (DRAW THE CURVES) a. the equilibrium price and quantity of soybeans to rise. b. the equilibrium price and quantity of soybeans to fall. c. the equilibrium price to rise, but the effect on quantity to be uncertain. d. the equilibrium quantity to rise, but the effect on price to be uncertain. e. the equilibrium quantity to fall, but the effect on price to be uncertain.
d. the equilibrium quantity to rise, but the effect on price to be uncertain.
Which of the following would you expect to have the least elastic demand? a.breakfast cereal. b.Kellogg's breakfast cereal c.Kellogg's breakfast cereal sold at Ingles. d.food. e.There is not enough information to determine.
d.food.
If the price of peanut butter increases and the demand for jelly increases as a result, then a.peanut butter is an inferior good and jelly is a normal good. b.peanut butter and jelly are complements. c.peanut butter is a normal good and jelly is an inferior good. d.peanut butter and jelly are substitutes. e.the law of demand has been violated.
d.peanut butter and jelly are substitutes.
If quantity demanded falls by 100,000 when price rises by 2 cents, we know that a.demand is elastic. b.demand is inelastic. c.demand is unit elastic. d.there is not enough information to calculate elasticity.
d.there is not enough information to calculate elasticity.
127. Which of the following will increase the demand (shift the demand curve) for mahogany desks? a. A rise in income, and mahogany desks are a normal good. b. A fall in the price of mahogany. c. A sudden fad for mahogany furniture. d. All of the above. e. All of the above but b.
e. All of the above but b.
129. Which of the following will increase the number of umbrellas sold? a. Incomes fall, and umbrellas are an inferior good. b. The price of raincoats rises and raincoats are a substitute for umbrellas. c. Extra-rainy weather. d. A fall in the price of umbrellas. e. All of the above will increase the number of umbrellas sold.
e. All of the above will increase the number of umbrellas sold.
225. Which of the following would reduce the demand for orange juice? a. An increase in the price of grape juice. b. A decrease in the price of grape juice. c. An early frost that destroys half the Florida orange crop. d. The discovery that orange juice cures the common cold. e. Just b and c.
b. A decrease in the price of grape juice.
205. Which of the following will increase the demand for snowboards? a. A fall in snowboard prices. b. A fall in the price of ski lift tickets. c. A new technology that enables snowboards to be manufactured for half the cost. d. A big sale on skis. e. All of the above will increase the demand for snowboards.
b. A fall in the price of ski lift tickets.
191. Suppose you like to make and eat coconut cream pies. What will a rise in the price of coconuts do to your demand for cream? (draw the curves!) a. It will increase. b. It will decrease. c. It won't change, since the two are separate products. d. Supply will be affected, not demand.
b. It will decrease.
174. Which of the following would cause both the equilibrium price and the equilibrium quantity of pears to decrease? a. a higher price for apples (a substitute) b. a lower price for apples c. an increase in consumer income if pears are a normal good d. an increase in the cost of fertilizers for growing pears e. the discovery that eating pears reduces risk of heart disease
b. a lower price for apples
219. The law of demand states that a. as individuals become wealthier, their demand increases. b. as prices go up, quantity demanded goes down. c. as prices go down, demand goes up. d. the market clears where quantity demanded equals quantity supplied. e. All of the above.
b. as prices go up, quantity demanded goes down.
118. If you raise price from $1.00 to $1.50 and quantity demanded falls from 20 to 15, you know demand for your product is a. elastic b. inelastic c. unit elastic d. downward sloping, but there is not enough information to calculate elasticity.
b. inelastic
132. A businesswoman says "No matter how much we cut price, we just don't seem to get any new customers." In other words, she thinks demand for her product is a. elastic b. inelastic c. unit elastic d. less than the supply.
b. inelastic
175. The economic model a. is about how money is made. b. is about how people make choices. c. assumes that people care most about money. d. assumes that people have no choices to make.
b. is about how people make choices.
245. Suppose that a fall in the price of good X causes less of good Y to be sold. This would mean that X and Y are a. complements b. substitutes c. unrelated d. normal goods e. luxury goods
b. substitutes
147. If equilibrium price has fallen from $5.50 to $4.75 while equilibrium quantity has risen from 10,000 to 12,000, we would know that a. demand has decreased. b. supply has increased. c. demand has increased. d. either demand has increased or supply has decreased. e. either supply has increased or demand has decreased.
b. supply has increased.
244. The marginal cost of taking your car for a spin around the block includes which of the following a. the cost of your car b. the cost of the gas you use up driving around the block c. the cost of auto insurance d. the cost of the new tires you just bought e. all of the above
b. the cost of the gas you use up driving around the block
259. If the price of coffee falls and the quantity of coffee demanded falls as well, we know that a. the law of demand has been violated. b. the demand for coffee has fallen. c. the price of tea (or some other substitute) must have risen. d. the supply of coffee must have decreased. e. the supply of coffee must have increased.
b. the demand for coffee has fallen.
177. If the price of olives rises just as new studies reveal additional health benefits from using olive oil, we would expect (draw the curves!) a. the equilibrium price of olive oil to rise and the quantity to fall. b. the equilibrium price of olive oil to rise, but the effect on quantity to be uncertain. c. the equilibrium price and quantity of olive oil to rise. d. the equilibrium quantity of olive oil to fall, but the effect on price to be uncertain. e. the equilibrium quantity of olive oil to rise, but the effect on price to be uncertain.
b. the equilibrium price of olive oil to rise, but the effect on quantity to be uncertain.
210. If there is excess demand for burritos, we would expect a. the price of burritos to fall. b. the price of burritos to rise. c. certain suppliers to stop making burritos. d. a burrito shortage.
b. the price of burritos to rise.
73. If the elasticity of demand of for camera film is 2.6, and the price of film is raised by 10 percent, a. the quantity demanded will fall by 2.6 percent. b. the quantity demanded will fall by 26 percent. c. the quantity demanded will fall by 260 percent. d. the quantity demanded must fall, but we need more information to determine by how much.
b. the quantity demanded will fall by 26 percent.
190. If the price of grapes falls a. demand for grapes increases. b. the quantity of grapes demanded increases. c. there will be a grape shortage. d. All of the above.
b. the quantity of grapes demanded increases.
53. A demand curve indicates the value consumers get from a good. It is measured as a. the benefits people receive less the cost. b. the quantity people will buy at various prices. c. the prices people prefer to pay. d. All of the above.
b. the quantity people will buy at various prices.
The recent drought in the Midwest has been severe, and experts say that roughly half the corn crop has been damaged. As a result, we would expect: a. the demand for corn to decrease. b. the supply of corn to decrease. c. the demand for corn to increase. d. the supply of corn to increase . e. Both a and b
b. the supply of corn to decrease.
231. If the price of silver falls, you would expect a. the demand for silver jewelry to increase. b. the supply of silver jewelry to increase. c. the demand for silver jewelry to decrease. d. the supply of silver jewelry to decrease. e. both a and b
b. the supply of silver jewelry to increase.
Which of the following will increase the demand for frisbees? a.A fall in the cost of plastics (an input) b.A rise in the price of nerf footballs (a substitute). c.A fall in the price of frisbees. d.New technology that allows frisbees to be made more cheaply. e.All of the above.
b.A rise in the price of nerf footballs (a substitute).
If price rises from 10 to 12 and quantity demanded falls by 12%, we know that demand is a.elastic. b.inelastic. c.unit elastic. d.downward sloping. e.There is not enough information to say.
b.inelastic.
119. If you raise your price by 50% and quantity demanded falls by 40%, the elasticity of demand for your product is a. 8.0 b. 1.25 c. .80 d. .50 e. .40
c. .80
223. Which of the following will increase the demand for waffles (shift the demand curve outwards)? a. A fall in the price of waffles. b. A fall in the price of waffle flour. c. A fall in the price of waffle syrup. d. All of the above.
c. A fall in the price of waffle syrup.
145. Which of the following will increase the supply (i.e., shift the supply curve) of brass key rings? a. A rise in the demand for key rings. b. A rise in the price of brass. c. An improvement in key ring-making technology. d. All of the above. e. Just a and c.
c. An improvement in key ring-making technology.
194. What would happen in the market for beef salami if the prices of both baloney (a substitute) and cattle feed fall? (draw the curves!) a. Equilibrium price would increase and quantity would decrease. b. Equilibrium price would decrease and quantity would increase. c. Equilibrium price would decrease but the effect on quantity would be uncertain. d. Equilibrium quantity would decrease but the effect on price would be uncertain. e. Equilibrium quantity would increase but the effect on price would be uncertain.
c. Equilibrium price would decrease but the effect on quantity would be uncertain.
117. For which product is demand likely to be the most elastic? a. Raisin Bran b. Kellog's Raison Bran c. Kellog's Raisin Bran at BiLo d. Breakfast cereal. e. All of the above equally, as all involve basically the same product.
c. Kellog's Raisin Bran at BiLo
193. Which of the following would increase demand for aardvark meat? a. A fall in the price of aardvarks. b. A fall in the price of aardvark eggs. c. Th new belief that eating aardvark makes you beautiful. d. All of the above.
c. Th new belief that eating aardvark makes you beautiful.
230. Which of the following would lead to an increase in both the equilibrium price and quantity of an inferior good, such as macaroni and cheese? a. an increase in consumer income and a rise in the price of wheat used to make macaroni. b. a decrease in consumer income and a rise in the price of wheat used to make macaroni. c. a decrease in consumer income. d. a rise in the price of wheat used to make macaroni.
c. a decrease in consumer income.
218. Which of the following would lead to an increase in both the equilibrium price and quantity of an inferior good, such as macaroni and cheese? a. an increase in income and an even bigger rise in the price of wheat used to make macaroni. b. a decrease in income and an even bigger rise in the price of wheat used to make macaroni. c. a decrease in income. d. a rise in the price of wheat used to make macaroni.
c. a decrease in income.
241. A decrease in the supply of aluminum bikes (i.e., a shift in the supply curve) could result from a. an increase in the supply of aluminum. b. an decrease in income (aluminum bikes are a normal good). c. a rise in the price of aluminum. d. a fall in the price of aluminum.
c. a rise in the price of aluminum.
179. When demand decreases a. price rises and quantity falls. b. price falls and quantity rises. c. both price and quantity fall. d. price rises, but the effect on quantity is uncertain. e. quantity falls, but price stays the same.
c. both price and quantity fall.
128. When the demand for something increases a. price rises and quantity falls. b. price falls and quantity rises. c. both price and quantity rise. d. price rises, but the effect on quantity is uncertain. e. quantity falls, but price stays the same.
c. both price and quantity rise.
167. What happens to the equilibrium price and quantity of tomato juice after the hurricane (orange juice and tomato juice are substitutes)? a. price rises, quantity falls. b. price falls and quantity rises. c. both price and quantity rise. d. both price and quantity fall. e. price falls, but the effect on quantity is uncertain.
c. both price and quantity rise.
87. The fact that more teachers per student are employed now than 20 years ago (i.e., equilibrium quantity has increased) tells us that a. demand has increased. b. supply has increased. c. either demand or supply has increased. d. demand has decreased. e. supply has decreased.
c. either demand or supply has increased.
229. When the supply and demand for a good both increase, a. equilibrium price will increase. b. equilibrium price will decrease. c. equilibrium price may increase, decrease, or remain unchanged. d. equilibrium price will increase if we are dealing with a normal good.
c. equilibrium price may increase, decrease, or remain unchanged
252. When the supply and demand for a good both increase, a. equilibrium price will increase b. equilibrium price will decrease c. equilibrium price may increase, decrease, or remain unchanged d. equilibrium price will increase if we are dealing with a normal good
c. equilibrium price may increase, decrease, or remain unchanged
173. When the supply and demand for a good both increase, a. equilibrium price will increase. b. equilibrium price will decrease. c. equilibrium price may increase, decrease, or remain unchanged. d. equilibrium price will increase if we are dealing with a normal good.
c. equilibrium price may increase, decrease, or remain unchanged.
148. A rise in demand a. forces price up and quantity down. b. forces price down and quantity up. c. forces price and quantity up. d. forces price and quantity down.
c. forces price and quantity up.
Demand for a "necessity" is likely to be ______, while demand for a "luxury" is likely to be _____. a. elastic, elastic. b. elastic, inelastic. c. inelastic, either elastic or inelastic. d. elastic, either inelastic or elastic.
c. inelastic, either elastic or inelastic.
139. If a $1 increase in price reduces the quantity demanded by 10%, we know that demand a. is inelastic, but we don't have enough information to calculate the elasticity b. is elastic, but we don't have enough information to calculate the elasticity c. is downward sloping, but we don't have enough information to calculate the elasticity d. has an elasticity of 10 e. has an elasticity of .1
c. is downward sloping, but we don't have enough information to calculate the elasticity
239. It is considering raising its price to $90. If it does so a. its total revenue will increase, because the percent increase in price is greater than the percent decrease in quantity demanded. b. its total revenue will increase, because the percent increase in price is less than the percent decrease in quantity demanded. c. its total revenue will decrease, because the percent increase in price is less than the percent decrease in quantity demanded. d. its total revenue will decrease, because the increase in price is greater than the percent decrease in quantity demanded.
c. its total revenue will decrease, because the percent increase in price is less than the percent decrease in quantity demanded.
248. An increase in the price of oranges a. increases the supply of oranges (shifts the supply curve) b. decreases the demand for oranges (shifts the demand curve) c. may be caused either by an increase in demand or a decrease in supply d. leads to a reduction in orange input prices
c. may be caused either by an increase in demand or a decrease in supply
257. The "law of demand" a. determines the market-clearing price. b. doesn't hold for scarce goods. c. says that people don't buy more of a good when price rises. d. applies primarily to consumer goods. e. measures the relationship between price and quantity demanded.
c. says that people don't buy more of a good when price rises.
68. If someone tells you that they "can't live without" something, you would assume, a. that they will die if they don't have it. b. that their demand is likely to be elastic. c. that their demand is likely to be inelastic. d. that the law of demand won't apply to them. e. that they have excess demand.
c. that their demand is likely to be inelastic.
246. If the price of batteries rises, you would expect a. the demand for flashlights to increase b. the demand for electricity to decrease c. the demand for electricity to increase d. the demand for battery powered toys to increase
c. the demand for electricity to increase
216. A technological breakthrough reduces the cost of pie crust. What is the effect on the market for cherry pies? (Hint: consider whether demand or supply or both change) a. the equilibrium price increases; the equilibrium quantity increases. b. the equilibrium price increases; the equilibrium quantity decreases. c. the equilibrium price decreases; the equilibrium quantity increases. d. the equilibrium price decreases; the equilibrium quantity decreases. e. the equilibrium price decreases; there is not enough information to tell what happens to quantity.
c. the equilibrium price decreases; the equilibrium quantity increases.
221. If an exceptionally snowy winter makes for great skiing conditions but also raises the cost of shipping-in skis, we would expect (DRAW THE CURVES) a. the equilibrium price and quantity of skis to rise. b. the equilibrium price and quantity of skis to fall. c. the equilibrium price to rise, but the effect on quantity to be uncertain. d. the equilibrium quantity to rise, but the effect on price to be uncertain. e. the equilibrium quantity to fall, but the effect on price to be uncertain.
c. the equilibrium price to rise, but the effect on quantity to be uncertain.
227. Which of the following is NOT an important determinant of the level of demand? a. income b. the price of related goods c. the price of inputs d. tastes e. All of the above are important determinants of the level of demand.
c. the price of inputs
152. If I tell you that the price of snowboards has risen and the quantity of snowboards on the market has fallen, you know that a. the law of demand has been violated. b. the law of supply has dominated the law of demand. c. the supply of snowboards has decreased. d. the supply of snowboards has increased. e. the demand for snowboards has decreased.
c. the supply of snowboards has decreased.
242. In economics, the cost of something is a. the out-of-pocket expense of obtaining it. b. always measured in money. c. what you must give up to get it. d. always higher than people think.
c. what you must give up to get it.
Which of the following will increase the demand for tea? a.A blight destroys 30% of the tea crop in India. b.Wonderful weather doubles the usual tea crop. c.A rise in the price of coffee. d.New technology allows tea to be made more cheaply. e.All of the above.
c.A rise in the price of coffee.
If the supply of "roots" (an input) increases, what would we expect to happen in the market for root beer? a.Demand to increase. b.Demand to decrease. c.Supply to increase. d.Supply to decrease.
c.Supply to increase.
Price Quantity Demanded 10 80 9 100 8 120 7 140 6 160 We therefore know that at the price of 8, causing the price to lower to 7, demand for the product a.will increase if price falls. b.decrease if price rises. c.is elastic. d.is inelastic. e.All of the above.
c.is elastic.
Which of the following is likely to have the least elastic supply?a.Coca Cola. b.soft drinks. c.paintings by Rembrandt. d.automobiles. e.Oil
c.paintings by Rembrandt.
The "law of demand" a.determines the equilibrium price. b.doesn't hold for scarce goods. c.says that people buy less of a good when price rises. d.applies only toconsumer goods.
c.says that people buy less of a good when price rises.
A firm faces the following demand schedule Price Quantity $100 100 $90 120 $80 150 $70 210 $60 250 238. If the firm charges a price of $80, its total revenue equals a. $230 b. $1000 c. $8000 d. $12,000
d. $12,000
Which of the following will NOT increase the quantity of coffees demanded? a. The discovery that coffee cures cancer. b. A rise in income, and coffee is a normal good. c. A great coffee harvest d. All of the above will increase the quantity of coffee demanded.
d. All of the above will increase the quantity of coffee demanded.
130. For which of the following is there a market? a. Orange juice. b. Pedigree dogs. c. Hiking in national forest land. d. All of the above. e. Just a and b.
d. All of the above.
164. Which of the following will increase the quantity of surfboards demanded? a. A very good surf. b. A fall in beach user-fees. c. A fall in the price of surfboards. d. All of the above.
d. All of the above.
168. Suppose Clemson passes a law that forbids the construction of new houses within city limits. We would expect a. the price of existing houses to rise. b. the price of houses surrounding Clemson to rise. c. more building to occur in the area surrounding Clemson. d. All of the above.
d. All of the above.
159. Which of the following would not be expected to reduce the demand (shift the demand curve) for peanut butter? a. An increase in the price of jelly b. A decrease in the price of tuna (a substitute) c. The discovery that peanut butter causes cancer d. An increase in the price of peanut butter e. All would reduce the demand for peanut butter
d. An increase in the price of peanut butter
204. Which of the following will not increase the demand for rice (i.e., will not shift the demand curve)? a. The discovery that eating rice reduces the chance of heart disease. b. An increase in the demand for rice cakes. c. An increase in the price of potatoes (a substitute). d. An unusually good rice harvest. e. All of the above will increase the demand for rice.
d. An unusually good rice harvest.
176. Why does quantity demanded fall as price rises? a. Because supply decreases. b. Because demand decreases. c. Because BOTH supply and demand decrease. d. Because people switch to substitutes.
d. Because people switch to substitutes.
144. If the supply of tea increases, what would we expect to happen in the market for coffee (a substitute)? a. The price to rise and quantity to fall. b. The price to fall and quantity to rise. c. Both price and quantity to rise. d. Both price and quantity to fall. e. Price to fall, but the effect on quantity to be uncertain.
d. Both price and quantity to fall.
188. Which of the following is least likely to increase the number of burritos that Moe's burrito shop sells? a. They hold a big burrito sale. b. A new formula that makes their burritos even more delicious. c. Chipotle (another burrito shop) increases its prices. d. Consumer income falls, and burritos are a normal good. e. All will increase the number of burritos sold.
d. Consumer income falls, and burritos are a normal good.
161. Suppose that the price of orange juice rises and the price of apples falls. What would you expect to happen to the price and quantity of apple juice? (DRAW THE CURVES!) a. The equilibrium price would increase, but the impact on equilibrium quantity would be uncertain. b. The equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain. c. Both equilibrium price and quantity would increase. d. Equilibrium quantity would increase, but the impact on equilibrium price would be uncertain. e. Equilibrium quantity would decrease, but the impact on equilibrium price would be uncertain.
d. Equilibrium quantity would increase, but the impact on equilibrium price would be uncertain.
220. An increase in the price of gasoline a. increases the supply of gasoline (shifts the supply curve). b. decreases the demand for gasoline (shifts the demand curve). c. Both of the above. d. None of the above.
d. None of the above.
143. What happens in the market for beef when the price of ranching land rises? a. Demand increases. b. Demand decreases. c. Supply increases. d. Supply decreases. e. None of the above.
d. Supply decreases.
120. What would happen in the market for shredded wheat cereal if the price of wheat decreased while the price of corn flakes (a substitute) increased? (DRAW THE CURVES!) a. The equilibrium price would increase, but the impact on quantity would be uncertain. b. The equilibrium price would decrease, but the impact on quantity would be uncertain. c. Both equilibrium price and quantity would decrease. d. The equilibrium quantity would increase but the impact on price would be uncertain. e. The equilibrium quantity would decrease but the impact on price would be uncertain.
d. The equilibrium quantity would increase but the impact on price would be uncertain.
198. We observe that the price of paper clips has risen and the quantity being sold on the market has fallen. Which of the following is the most likely explanation? a. The demand for paper clips has increased. b. The demand for paper clips has decreased. c. The supply of paper clips has increased. d. The supply of paper clips has decreased.
d. The supply of paper clips has decreased.
165. The price of ham rises sharply. What happens to the equilibrium price and quantity of cheese (ham and cheese are complements)? a. price rises, quantity falls. b. price falls and quantity rises. c. both price and quantity rise. d. both price and quantity fall. e. price falls, but the effect on quantity is uncertain.
d. both price and quantity fall.
222. If you read in the newspaper that the price of a product has risen, and that the quantity of the product sold on the market has risen as well, you know that a. the law of demand has been violated. b. the newspaper story must be wrong. c. supply must have shifted. d. demand must have increased. e. demand must have decreased.
d. demand must have increased.
121. Which of the following will increase the market price of coffee? a. The discovery that coffee cures cancer. b. A terrible storm in Brazil that destroys half the coffee crop. c. An increase in the price of tea (a substitute). d. A fall in the price of cream (a complement). e. All of the above.
e. All of the above.
64. Prices are important because they a. bring quantity demanded and quantity supplied into balance. b. help determine who obtains scarce goods. c. help determine how to allocate our scarce resources. d. coordinate the choices made by consumers and producers. e. All of the above.
e. All of the above.
99. If a frost kills a significant amount of the Brazilian coffee crop, we can expect a. the price of coffee to rise. b. the quantity of coffee consumed to fall. c. the price of tea to rise, if coffee and tea are substitutes. d. the supply of coffee to decrease (i.e., shift to the left). e. All of the above.
e. All of the above.
250. Suppose that the price of a substitute for good X falls and the price of the raw materials used to manufacture good X increases. What would you expect to happen in the market for good X? a. The equilibrium price would increase, but the impact on equilibrium quantity would be uncertain. b. The equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain. c. Both equilibrium price and quantity would increase. d. Equilibrium quantity would increase, but the impact on equilibrium price would be uncertain e. Equilibrium quantity would decrease, but the impact on equilibrium price would be uncertain
e. Equilibrium quantity would decrease, but the impact on equilibrium price would be uncertain
84. Which of the following will increase the market price of chocolate eclairs? a. The discovery that chocolate causes cancer. b. A much larger than expected chocolate crop. c. A fall in the price of cupcakes (a substitute). d. A rise in the price of milk (a complement). e. None of the above.
e. None of the above.
162. What would happen in the market for corn tacos if the price of corn increased while the price of wheat tacos (a substitute) decreased? (DRAW THE CURVES!) a. The equilibrium price would increase, but the impact on quantity would be uncertain. b. The equilibrium price would decrease, but the impact on quantity would be uncertain. c. Both equilibrium price and quantity would decrease. d. The equilibrium quantity would increase but the impact on price would be uncertain. e. The equilibrium quantity would decrease but the impact on price would be uncertain.
e. The equilibrium quantity would decrease but the impact on price would be uncertain.
90. If price is raised by $2 and quantity falls by 20 percent, the elasticity of demand a. equals 2. b. equals 10. c. equals 20. d. is greater than 1. e. can not be determined without more information.
e. can not be determined without more information.
180. If equilibrium price has fallen from $5.50 to $4.75, we would know that a. demand has decreased. b. supply has increased. c. demand has increased. d. either supply has decreased or demand has increased. e. either supply has increased or demand has decreased.
e. either supply has increased or demand has decreased.
A firm faces the following demand schedule - Price Quantity $20 10 $19 20 $18 30 $17 40 $16 50 In other words, going from a price of $16 to a price of $17, demand is a. upward sloping. b. equal to supply. c. going down. d. inelastic. e. elastic.
e. elastic.
135. If a 25% increase in the price of skateboards reduces the quantity demanded by 500, then demand for skateboards a. has increased. b. has decreased. c. is elastic. d. is inelastic. e. is downward sloping, but there is not enough information to calculate the elasticity
e. is downward sloping, but there is not enough information to calculate the elasticity
133. The quantity supplied will increase with an increase in price only if supply is not a. elastic b. inelastic c. unit elastic d. perfectly elastic e. perfectly inelastic.
e. perfectly inelastic.
206. If an unusually cold summer discourages people from eating ice cream while lowering the cost of storing ice cream, we would expect (Draw the curves!) a. the equilibrium price and quantity of ice cream to rise. b. the equilibrium price and quantity of ice cream to fall. c. the equilibrium price to rise, but the effect on quantity to be uncertain. d. the equilibrium quantity to rise, but the effect on price to be uncertain. e. the equilibrium price to fall, but the effect on quantity to be uncertain.
e. the equilibrium price to fall, but the effect on quantity to be uncertain.
94. Supply and demand are always more elastic in the long-run because a. a greater range of actions can be taken in longer periods. b. price generally declines over time. c. price generally rises over time. d. people value wealth more in longer periods. e. incomes rise over time.
a. a greater range of actions can be taken in longer periods.
Below is a demand schedule and a supply schedule for kumquats P QD QS 1 101 10 2 87 30 3 76 49 4 58 52 5 45 57 6 33 76 7 12 90 At what price is quantity demanded greatest? At what price is quantity supplied greatest? a.1, 7 b.3, 5 c.5, 3 d.7, 1
a.1, 7
Which of the following will not increase the demand for burritos? a.A big burritos sale. b.The discovery that eating burritos cures cancer. c.A rise in the price of burgers, a substitute. d.A fall in the price of guacamole, a complement. e.All of the above will increase the demand for burritos.
a.A big burritos sale.
If demand is elastic, we would expect a.a big change in quantity when price changes. b.a small change in quantity when price changes. c.the demand curve to shift when price changes. d.supply to be elastic as well.
a.a big change in quantity when price changes.
Suppose the price of tea increases. As a result, we would expect to see a.an increase in the demand for coffee (a substitute). b.an increase in the demand for sugar (a complement). c.a decrease in the demand for tea. d.All of the above.
a.an increase in the demand for coffee (a substitute).
A normal good is one for which a.demand increases when income increases. b.demand increases when price decreases. c.demand increases when tastes change. d.demand is elastic. e.demand is inelastic.
a.demand increases when income increases.
If a price rise of 9% leads to a rise in quantity supplied of 12%, we know that supply is a.elastic. b.inelastic. c.unit elastic. d.downward sloping.
a.elastic.
Anything that increases the value that potential buyers receive from a good may be expected to a.increase demand. b.increase supply. c.increase both demand and supply. d.increase demand but decrease supply.
a.increase demand.
Which of the following would you expect to have the least elastic demand? a.penicillin. b.bananas. c.bananas from Columbia. d.bananas from Columbia sold at Albertsons. e.All would have equal elasticity of demand, because each would have a downward sloping demand curve.
a.penicillin.
Which of the following will not decrease the supply of burritos. a.the discovery that eating burritos causes cancer. b.a rise in the price of the tortillas used to make burritos. c.a rise in the price of wages paid to burrito-making employees. d.All of the above will decrease the supply of burritos.
a.the discovery that eating burritos causes cancer.
If supply increases, we would expect that the quantity demanded at $50 a.will equal 150. b.will be greater than150. c.will be less than 150. d.There is not enough information to say.
a.will equal 150.
A firm faces the following demand schedule - Price Quantity $20 10 $19 20 $18 30 $17 40 $16 50 If the firm charges a price of $16, its total revenue equals a. $800 b. $1000 c. $1600 d. $2000
a. $800
100. If a frost kills a significant amount of the Brazilian coffee crop, we can then expect the total amount spent on coffee to rise if the elasticity of demand is a. 0.8 b. 2.5 c. 9.8 d. We do not have sufficient information to answer.
a. 0.8
115. If you raise price from 5 to 10 and the quantity you sell falls from 20 to 15, the elasticity of demand for your product is a. 25 b. 2.5 c. 0.25 d. 4 e. 40
c. 0.25
If we raise price by 10 cents and quantity demanded falls by 10,000 units, we would conclude that a. demand is elastic. b. demand is inelastic. c. demand is unit elastic. d. there is not enough information to determine whether demand is elastic or not.
d. there is not enough information to determine whether demand is elastic or not.
The demand curve represents _____ while the supply curve represents _____. a.increases, decreases. b.decreases, increases. c.prices, quantities. d.benefits, costs.
d.benefits, costs.
Price Quantity Demanded 10 80 9 100 8 120 7 140 6 160 The demand for this product a.is elastic. b.is inelastic. c.is unit elastic. d.maybe elastic or inelastic, depending on the price.
d.maybe elastic or inelastic, depending on the price.
66. If a firm making widgets lowers its price by 10 percent and finds that it sells 8 percent more widgets, the elasticity of demand for its product equals a. 0.8 b. 1.2 c. 8 d. 10 e. there is not enough information to say.
a. 0.8
62. If the supply of peanut butter increases, what would we expect to happen in the market for jelly (a complement)? a. Demand to increase. b. Demand to decrease. c. Supply to increase. d. Supply to decrease. e. Neither the demand nor the supply of jelly would be affected.
a. Demand to increase.
81. If the demand for bread increases, what would we expect to happen to the quantity of wheat supplied? a. It to go up. b. It to go down. c. It to be unchanged, because demand has been affected, not supply. d. It to go up, but by less than the quantity demanded.
a. It to go up.
Suppose that the price of oranges and apples rises. What would you expect to happen to the market price and quantity of orange juice? (Hint: apple juice is a substitute) (DRAW THE CURVES!) a. The equilibrium price would increase, but the impact on equilibrium quantity would be uncertain. b. The equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain. c. Both equilibrium price and quantity would increase. d. Equilibrium quantity would increase, but the impact on equilibrium price would be uncertain. e. Equilibrium quantity would decrease, but the impact on equilibrium price would be uncertain.
a. The equilibrium price would increase, but the impact on equilibrium quantity would be uncertain.
If the demand for french bread is elastic and the baker holds a french bread sale a. he will sell a lot more bread. b. he may sell more bread, but not a lot more. c. he won't sell any more bread. d. demand will increase
a. he will sell a lot more bread.
Elasticity of demand depends on a. the closeness of substitutes. b. whether the good is normal or inferior. c. the law of demand. d. All of the above.
a. the closeness of substitutes.
The supply curve for pasta reflects a. the cost of the wheat from which pasta is made. b. the perceived health benefits of pasta. c. the price of spaghetti sauce, a complement. d. All of the above.
a. the cost of the wheat from which pasta is made.
98. "A doubling in gasoline prices has not reduced purchases at all." The speaker evidently believes that demand for gasoline is a. perfectly elastic. b. perfectly inelastic. c. greater than supply. d. less than supply. e. unit elastic.
b. perfectly inelastic.
114. Demand is said to be inelastic if a. quantity demanded moves proportionately more than price b. quantity demanded moves proportionately less than price c. quantity demanded moves proportionately the same amount as price d. demand does not decrease very much when price increases
b. quantity demanded moves proportionately less than price
102. If equilibrium price in a market has risen from $5 to $10 and the equilibrium quantity has fallen from 100 to 50, we would know that a. demand has increased. b. supply has decreased. c. both supply and demand have decreased. d. either demand has increased or supply has decreased. e. either supply has increased or demand has decreased.
b. supply has decreased.
85. If equilibrium price in a market has risen from $10 to $25 and the equilibrium quantity has fallen from 50,000 to 35,000, we would know that a. demand has increased. b. supply has decreased. c. demand has decreased. d. supply has increased. e. both supply and demand have decreased.
b. supply has decreased.
Price Quantity Demanded 10 80 9 100 8 120 7 140 6 160 The elasticity of demand for a price cut from 10 to 9 is a.4 b.2.5 c.2 d.1.5 e.0.5
b.2.5
Below is a demand schedule and a supply schedule for kumquats P QD QS 1 101 10 2 87 30 3 76 49 4 58 52 5 45 57 6 33 76 7 12 90 At what which of the following prices will the most kumquats actually be sold (i.e., change hands from seller to buyer)? a.1. b.3. c.5. d.7.
b.3.
If the supply of peanut butter increases, what would we expect to happen in the market for tuna (a substitute for peanut butter on sandwiches)? a.Demand to increase. b.Demand to decrease. c.Supply to increase. d.Supply to decrease. e.Neither the demand nor the supply of tuna would be affected.
b.Demand to decrease.
If the demand function is QD= 40-2P and price rises by 10, what will happen to quantity demanded? a.It will fall by 10 .b.It will fall by 20. c.It will fall, but in order to determine the precise amount, we would need a supply function. d.Demand will fall, but quantity demanded will not change.
b.It will fall by 20.
Which of the following would you expect to have the least elastic demand? a.wheat bread made by Pepperidge Farm. b.headache medicine. c.wheat bread made by Pepperidge Farm and sold at Bi-Lo d.There is not enough information to determine.
b.headache medicine.
If then you discover that you were mistaken, and that, although the price had risen, the equilibrium quantity of soybeans has actually fallen, you would know that a. demand has decreased. b. demand has increased. c. supply has decreased. d. supply has increased. e. None of the above.
c. supply has decreased.
93. If quantity supplied responds only slightly to a change in price, then a. supply is elastic b. an increase in price will not shift the supply curve much. c. supply is inelastic. d. supply is perfectly inelastic.
c. supply is inelastic.
Which of the following will increase the quantity of photocopiers supplied? a. A fall in the price of photocopy paper (a complement). b. A rise in the price of scanners (a substitute). c. New technology that makes it possible to manufacture photocopiers much more cheaply. d. All of the above.
d. All of the above
103. At the intersection of the supply curve and the demand curve a. the quantity supplied equals the quantity demanded. b. no buyer who is willing to pay the market price goes without. c. no seller willing to sell at the market price is unable to do so. d. All of the above.
d. All of the above.
111. The demand curve shows _______ and the supply curve shows ______. a. how much potential buyers value the good; the willingness of potential sellers to sell the good. b. the marginal benefit of the good to demanders; the marginal cost of the good to suppliers. c. the quantity that will be bought at each price; the quantity that will be sold at each price. d. All of the above.
d. All of the above.
89. If the supply of snowboards increases, what would we expect to happen in the market for skis (a substitute)? a. Demand to increase. b. Demand to decrease c. Supply to increase. d. Supply to decrease. e. Neither the demand nor the supply of skis would be affected.
b. Demand to decrease
What effect would a reduction in the U.S. selling price of Japanese-made cars have on the U.S. demand for American-made cars? a. No effect, because price changes affect quantity demanded, not demand. b. The demand would decrease. c. The demand would increase. d. We cannot tell unless we know Japan's comparative advantage e. We cannot tell unless we know what happened to the price of American-made cars.
b. The demand would decrease.
86. What would happen in the market for ramen noodles if the price of wheat (an input) falls while consumer income rises (ramen noodles are an inferior good)? a. The equilibrium price would increase, but the impact on quantity would be uncertain. b. The equilibrium price would decrease, but the impact on quantity would be uncertain. c. Both equilibrium price and quantity would decrease. d. The equilibrium quantity would increase but the impact on price would be uncertain. e. The equilibrium quantity would decrease but the impact on price would be uncertain.
b. The equilibrium price would decrease, but the impact on quantity would be uncertain.
46. Which of the following would make the demand for Pepsi more elastic? a. An improvement in the Pepsi formula. b. The launching of five new brands of cola by five different companies. c. Coca Cola going bankrupt. d. Cola is discovered to reduce the risk of colon cancer. e. Pepsi is discovered to reduce the risk of colon cancer.
b. The launching of five new brands of cola by five different companies.
If you discover that the equilibrium price and quantity of soybeans has risen, you would conclude that a. demand has decreased. b. demand has increased. c. supply has decreased. d. supply has increased. e. None of the above.
b. demand has increased.
112. If a good is a necessity, demand for that good would tend to be a. elastic b. inelastic c. elastic when price falls; inelastic when it rises d. unit elastic e. horizontal
b. inelastic
101. Coffee growers will be happy about the frost only if demand is a. elastic. b. inelastic. c. perfectly elastic. d. downward sloping.
b. inelastic.
69. The demand for Kellogg's Corn Flakes tends to be very elastic because a. there are very few close substitutes. b. many other cereals are almost perfect substitutes. c. if you leave them for too long, they become stale. d. the price of milk has been low in recent years.
b. many other cereals are almost perfect substitutes.
Price Quantity Demanded 10 80 9 100 8 120 7 140 6 160 The firm is currently charging a price of 8. If it wants to increase its sales revenue, it should a.raise price to 9. b.lower price to 7. c.leave the price at 8, because it will have excess demand at a lower price and excess supply at a higher price.d.either raising or lowering price will increase total revenue. e.neither raising or lowering price will increase total revenue.
b.lower price to 7.
If Clemson decides to increase tuition so as to raise its revenues, it must believe that a.the demand for education at Clemson is elastic. b.the demand for education at Clemson is inelastic. c.the demand for education at Clemson has increased. d.the supply of education at Clemson has increased.
b.the demand for education at Clemson is inelastic.
Jon needs 200 cases of Cristal champagne to cater a wedding. First, Jon visits all the wine shops located within ten miles, but can't get enough cases. Then Jon visits all wine shops located between 10 and 50 miles, but still is short a few cases. Finally Jon visits all wine shops located within 50 and 100 miles, and gets the last few cases he needs. Jon's struggles illustrate a.the law of demand. b.the law of supply. c.the principal of absolute advantage d.that sometimes the gains from trade aren't worth it
b.the law of supply.
A rational decision-maker takes action only if a.the average benefit is greater than the average cost. b.the marginal benefit is greater than the marginal cost. c.the total benefit is positive. d.society will be made better off. e.All of the above
b.the marginal benefit is greater than the marginal cost.
QD= 200-P QS= P -30 If supply increases, we would expect that the quantity supplied at $50 a.will equal 20. b.will be greater than 20. c.will be less than 20. d.There is not enough information to say.
b.will be greater than 20.
113. If price elasticity of demand for a good is 3, then a 10% increase in price would be expected to result in a a. 3% decrease in quantity demanded b. 3% increase in quantity demanded c. 30% decrease in quantity demanded d. 300% decrease in quantity demanded e. 10% increase in quantity demanded
c. 30% decrease in quantity demanded
Which of the following will NOT increase the demand (shift the demand curve) for coffee? a. The discovery that coffee cures cancer b. A rise in income, and coffee is a normal good. c. A great coffee harvest. d. All of the above will increase the demand for coffee.
c. A great coffee harvest.
78. Which of the following will lead to an increase in the demand for satellite TV? a. A fall in consumer income (satellite TV is a normal good). b. A big satellite TV sale. c. A rise in the price of Netflix (a substitute). d. All of the above.
c. A rise in the price of Netflix (a substitute).
63. What would happen in the market for interior house paint if the price of paintbrushes falls while the price of wallpaper (a substitute) rises? a. The equilibrium price would increase, but the impact on quantity would be uncertain. b. The equilibrium price would decrease, but the impact on quantity would be uncertain. c. Both equilibrium price and quantity would increase. d. The equilibrium quantity would increase but the impact on price would be uncertain. e. The equilibrium quantity would decrease but the impact on price would be uncertain.
c. Both equilibrium price and quantity would increase.
Which of the following will increase the supply of photocopiers? a. A fall in the price of photocopy paper (a complement). b. A rise in the price of scanners (a substitute). c. New technology that makes it possible to manufacture photocopiers much more cheaply. d. All of the above.
c. New technology that makes it possible to manufacture photocopiers much more cheaply.
88. What happens in the market for cream cheese when the price of cream (an input) falls? a. Demand increases. b. Demand decreases. c. Supply increases. d. Supply decreases e. Both b and d.
c. Supply increases.
80. When the demand for something falls a. price rises and quantity falls. b. price falls and quantity rises. c. both price and quantity fall. d. price rises, but the effect on quantity is uncertain. e. quantity falls, but price stays the same.
c. both price and quantity fall.
A firm faces the following demand schedule - Price Quantity $20 10 $19 20 $18 30 $17 40 $16 50 It is considering raising its price to $17. If it does so a. its total revenue will increase, because the percent increase in price is greater than the percent decrease in quantity demanded. b. its total revenue will increase, because the percent increase in price is less than the percent decrease in quantity demanded. c. its total revenue will decrease, because the percent increase in price is less than the percent decrease in quantity demanded. d. its total revenue will decrease, because the percent increase in price is greater than the percent decrease in quantity demanded.
c. its total revenue will decrease, because the percent increase in price is less than the percent decrease in quantity demanded.
83. Suppose that the supply of root beer (a complement) increases and the price of cream (an input) falls. What would you expect to happen to the market price and quantity of ice cream? a. The equilibrium price would increase, but the impact on equilibrium quantity would be uncertain. b. The equilibrium price would decrease, but the impact on equilibrium quantity would be uncertain. c. Both equilibrium price and quantity would increase. d. Equilibrium quantity would increase, but the impact on equilibrium price would be uncertain. e. Equilibrium quantity would decrease, but the impact on equilibrium price would be uncertain.
d. Equilibrium quantity would increase, but the impact on equilibrium price would be uncertain.
65. If I tell you that the price of cameras has fallen and the number sold has fallen rather than risen, you would know that a. the law of demand has been violated. b. supply is greater than demand. c. demand is greater than supply. d. the demand for cameras has decreased.
d. the demand for cameras has decreased.
Which of the following will NOT increase the demand for porcelain tea sets? a.A rise in the price of china tea sets (a substitute). b.A fall in the price of tea (a complement). c.A rise in income, and porcelain tea sets are a normal good. d.A fall in the price of porcelain. e.All of the above will increase demand for porcelain tea sets.
d.A fall in the price of porcelain.
36.What would an increase in the price of diamonds do to the supply of diamond rings? a.Nothing; price changes quantity supplied, not supply. b.Nothing; the demand for diamond rings would change, not the supply. c.Supply would increase because diamond rings are a luxury good. d.Supply would decrease.
d.Supply would decrease.
Buyers and sellers communicate primarily a.through surveys. b.through government agencies. c.through advertising. d.through their willingness to buy and sell at various prices. e.All of the above.
d.through their willingness to buy and sell at various prices.
The law of demand would lead you to expect that if the price of butter goes up, a. people will complain. b. people will no longer buy butter c. a butter surplus will occur. d. a butter shortage will occur. e. people will buy more margarine.
e. people will buy more margarine.
Which of the following will decrease the supply (i.e., shift the supply curve) of chocolate cakes? a.A rise in the price of chocolate. b.A rise in the price of flour. c.The news that eating chocolate cake causes cancer. d.All of the above. e.Just a and b.
e.Just a and b.
Which of the following is/are true? a.A reduction in the price of apricots will increase the demand for apricots. b.A reduction in the price of apricots will decrease the demand for apricots. c.An increase in consumer income will decrease the demand for apricots if apricots are a normal good. d.All of the above. e.None of the above.
e.None of the above.
