Econ Exam Missed Questions

The price of product C rises by 10%. As a result, the quantity demanded of product D rises by 20%. The cross-price elasticity of demand between product C and product D is _____, and they are _____.

2; substitutes

Supply shifts outward/right-Which of the following market changes would lead to a shift of the supply curve from Old supply to New supply?

A rise in the price of a product that is a complement-in-production.

Which of the graphs shows the effect on the housing market today, if the realtor association predicts new housing prices to fall in a few months?

Demand shift left

A government may want to create barriers to sellers entering a given market for all of the following reasons EXCEPT:

increasing the market demand for a product so that all sellers enjoy higher demand.

A market consists of ten similar suppliers that are making the same supply decisions. To find the market supply of these ten suppliers, you:

multiply the individual supply of one of the suppliers by ten.

Diminishing marginal product leads to

rising marginal costs for a seller.

Which of the following are correct about fixed costs? (i) They do not change with the level of production in the short run.(ii) They include variable costs.(iii) They are present even when the firm is producing zero units.(iv) They are irrelevant to marginal cost.

(i), (iii), and (iv)

The demand curve shifts left-Which of the following market changes would lead to a shift of the demand curve from Old demand to New demand?

A report is published noting that the product has adverse health effects.

A hurricane is expected to hit the Carolinas. Why might the prices of batteries, candles, and bottled water rise?

Buyers will flock to purchase these items, and the excess demand will cause prices to rise.

(Table: Cooking time) The table provides data on how long it takes Marla and Jason to cook lasagna or chicken curry. Which statement explains who has a comparative advantage in cooking lasagna?

Marla because she has a lower opportunity cost than Jason

Suppose supply shifts out and demand shifts back. What happens to the equilibrium price and quantity?

Price falls. The effect on quantity is uncertain.

Which graph shows the effect on the supply curve for new housing in Dubai, if there is a decrease in demand for new housing?

Supply shifts left, decrease in market supply

What will the impact be on the supply of long-haul truck transportation services if diesel fuel becomes cheaper?

The supply of truck transportation services will increase.

Which of the following is NOT a correct rationale about why income redistribution programs do not always reduce efficiency?

When incomes are more equal, work incentive grows.

Survey data for Americans are illustrated in a graph with the average level of well-being reported (on the vertical axis) at each level of income (on the horizontal axis). The slope of this curve indicates the relationship between well-being and income is consistent with _____ marginal benefit for additional income.

a diminishing

Kathleen Alvarado is binge-watching her favorite show on Netflix. She is trying to decide how many more episodes to watch. Kathleen should continue watching episodes unless the marginal

benefit of watching another episode is equal to the marginal cost.

What type of good is nonrival and excludable?

club goods

Which of the following is correct about the discount effect facing companies in perfectly and imperfectly competitive markets? Companies in perfect competition _____ it. Companies in imperfect competition _____ it.

do not face; face

The relationship between price expectations and demand is

positive; when future prices are expected to rise, current demand will rise.

During the pandemic, people don't want to go out to eat as much. At the same time, costs for restaurants are rising to ensure the safety of their employees. What do you predict will happen to the equilibrium price and quantity for restaurant meals?

quantity falls, the effect on price is uncertain

If an item is a necessity rather than a luxury, and has few substitutes, its demand curve will likely be:

relatively steep.

The opportunity costs of a decision may include each of the following types of costs EXCEPT

sunk cost

Average cost equals:

total cost divided by output.

The Rational Rule for Sellers is that sellers should choose the quantity _____ and choose the price _____.

where marginal revenue equals marginal cost; that is on the seller's demand curve for that quantity