econ quiz 2

Shelter for homeless people is an example of A. a want B. a need C. something they can live without D. something hard to find

a need.

According to the law of demand, when the price of shoes ______ people will consume ______ shoes. A. rises, more B. falls, more C. rises, the same amount D. falls, the same amount

falls, more

When the demand for a good is inelastic, that good is likely to have: A. many close complements. B. few close complements. C. many close substitutes. D. few close substitutes.

few close substitutes.

If the absolute value of the price elasticity of demand for tickets to a football game is 2, then if the price increases by 1%, quantity demanded decreases by: A. ½%. B. 1%. C. 2%. D. 4%.

2%.

Suppose that at a price of 25 cents per orange, 500 consumers each demand 4 oranges, and at a price of 20 cents per orange, 750 consumers each demand 5 oranges. Therefore, the market demand for oranges is ______ at a price of 25 cents per orange and ______ at a price of 20 cents per orange. A. 4; 5 B. 500; 750 C. 1250; 1500 D. 2000; 3750

2000; 3750.

Fran runs a doughnut shop in a tiny 3-person town. The table below shows the quantity demanded by the three townspeople at different prices. When the price of a doughnut is 50 cents, what is the market demand for doughnuts? A. 31 doughnuts B. 20 doughnuts C. 9 doughnuts D. 5 doughnuts

9 doughnuts

Which of the following is likely to have the highest price elasticity of demand? A. shoes B. running shoes C. Nike running shoes D. The price elasticity of demand will be the same for all of the answers listed.

Nike running shoes

A good's nominal price is the: A. dollar price of the good relative to the average dollar price of all other goods and services. B. absolute price of the good in dollar terms. C. average real price of the good. D. dollar price of the good relative to the real price of all other goods and services.

absolute price of the good in dollar terms.

The price elasticity of demand is typically expressed as a positive number because: A. price and quantity move in the same direction. B. the demand curve has a positive slope. C. it's convenient to use absolute values. D. both the numerator and the denominator are negative, so the formula yields a positive number.

both the numerator and the denominator are negative, so the formula yields a positive number.

Refer to the figure below. If Mallory and Rick are the only two consumers in this market and the price of soda increases from $0.75 to $1.00 per can, the quantity of soda demanded in the market will ______ by ______ cans per week. A. decrease; 20 B. increase; 20 C. decrease; 40 D. increase; 40

decrease; 40.

A good's real price is the: A. dollar price of the good relative to the average dollar price of all other goods and services. B. absolute price of the good in dollar terms. C. average dollar price of the good. D. dollar price of the good relative to the real price of all other goods and services.

dollar price of the good relative to the average dollar price of all other goods and services.

When the price of NBA tickets is $25 each, 30,000 tickets are sold. After the price rises to $30 each, 20,000 tickets are sold. At the original price, the demand for NBA ticket is: A. elastic. B. inelastic. C. unit elastic. D. perfectly elastic.

elastic.

In most markets, scarce goods or services are rationed among competing users using: A. non-monetary prices B. monetary prices C. government organizations D. private organizations

monetary prices

The percentage change in quantity demanded that results from a 1 percent change in price is known as the: A. price elasticity of supply. B. price elasticity of demand. C. income elasticity of demand. D. cross-price elasticity of demand.

price elasticity of demand.

Consumption responds mostly directly to changes in the: A. perfect price of a good. B. the absolute dollar price of a good. C. nominal price of a good. D. real price of a good

real price of a good.

The tendency for consumers to purchase more of a good or service as its price falls is captured by: A. the law of supply. B. the law of increasing cost. C. cross-price elasticity of demand. D. the law of demand.

the law of demand.

6. The law of demand indicates that as the cost of an activity: A. falls, less of the activity will occur. B. rises, more of the activity will occur. C. rises, the level of the activity may or may not increase depending on the individual. D. rises, less of the activity will occur.

rises, less of the activity will occur.

Growing rice requires extensive irrigation in California. Economists consider water to be a ______ for rice farmers in California. A. want B. need C. luxury D. inferior good

want.

Higher education is a ______ and assigned textbooks are ______. A. need; needs B. want; wants C. need; wants D. want; needs

want; wants

After subsistence levels of food, shelter, and clothing have been provided, economists refer to all other goods and services as: A. "inferior goods" B. "needs" C. "wants" D. "luxuries"

wants

If the price elasticity of demand for pineapples is 0.75, then a 4% increase in the price of pineapples will lead to a: A. 3% decrease in the quantity of pineapples demanded. B. 3% increase in the quantity of pineapples demanded. C. 0.75% decrease in the quantity of pineapples demanded. D. 0.75% increase in the quantity of pineapples demanded

3% decrease in the quantity of pineapples demanded.

The fact that the average price of a gallon of gasoline is much higher in England than in the U.S. leads to which of the following predictions? A. Drivers in England will buy cars with poorer gas mileage than will drivers in the U.S. B. Drivers in England will drive a greater number of miles than will drivers in the U.S. C. Drivers in the U.S. will take fewer trips than will drivers in England. D. Large cars with poor gas mileage will be less popular in England than in the U.S.

Large cars with poor gas mileage will be less popular in England than in the U.S.

Suppose a 10% increase in the price of aspirin leads to a 5% decrease in the quantity demanded of aspirin. The demand for aspirin, therefore, is. A. elastic. B. inelastic. C. unit elastic. D. perfectly inelastic

inelastic.

In some countries, medical care is provided free-of-charge to citizens and is paid for by the government. In those countries, medical care: A. is not a scarce resource. B. is available at zero opportunity cost. C. is rationed by some non-monetary method. D. does not exhibit diminishing marginal returns.

is rationed by some non-monetary method.

The price elasticity of demand for a good measures the responsiveness of: A. demand to a one percent change in price of that good. B. price to a one percent change in the demand for that good. C. quantity demanded to a one percent change in price of that good. D. price to a one percent change in the quantity demanded of that good.

quantity demanded to a one percent change in price of that good.