ECON 212 Test 2

If each of your first seven employees adds more to output than the new worker hired, you are experiencing:

increasing marginal returns.

Mingma hired another cashier to work in her clothing store, and her sales more than doubled. Hiring the second worker resulted in:

increasing marginal returns.

The ratio of percentage change in quantity demanded to percentage change in price is called:

price elasticity of demand.

A tax in which the percentage of income tax rises as income falls is known as a:

regressive tax.

Suppose the demand for toxic waste disposal is very elastic. The government imposes an excise tax on waste disposal. The deadweight loss associated with the production of toxic waste disposal will be:

relatively large.

A budget line is linear because:

the prices of the two goods are held constant.

Suppose that the 23rd worker generates a marginal product equal to eight boxes of output and that the average product of 23 workers employed is five boxes per worker. We can conclude that:

average product is rising.

If demand is inelastic, the tax burden falls primarily on the _____ and deadweight loss is _____.

buyer; small

An elastic supply curve that is linear is relatively ______ and crosses the ______ axis.

flat; price

Which of the following is likely to have the lowest price elasticity?

gasoline

In general, marginal product equals average product at:

maximum average product.

In general, the longer the period given to producers, the:

more elastic is the supply curve.

A restaurant manager sees that when he has too many servers on the floor, the servers get in each other's way and fewer people are served. This shows the concept of:

negative marginal returns.

Which of the following is NOT a determinant of elasticity?

sales tax rate placed on the item

If the cross elasticity of demand for good A with respect to good B is 2.3, then good A is a(n):

substitute for good B.

A consumer is in equilibrium when:

the addition to total utility per dollar is the same for every commodity.

When moving down along a straight-line demand curve:

the elasticity of demand changes from elastic to inelastic.

Which of the following might be considered a primary determinant of price elasticity of supply?

time available to make changes to manufacturing plants

The primary determinant of the elasticity of supply is:

time.

When a firm experiences increasing marginal returns:

total output rises at an increasing rate.

If a firm sells a product that has a perfectly inelastic demand curve, then, if price doubles, it can be expected that:

total revenue will double.