MICRO HW WK 1

The demand for textbooks is price inelastic. Which of the following would explain this?

The good is a necessity.

Which of the following will not cause the demand for product K to change?

a change in the price of K

If two goods are complements:

a decrease in the price of one will increase the demand for the other.

If L and M are complementary goods, an increase in the price of L will result in:

a decrease in the sales of M.

Which of the following would not shift the demand curve for beef?

a reduction in the price of cattle feed

Economists use the term demand to refer to:

a schedule of various combinations of market prices and amounts demanded.

DVD players and DVDS are:

complementary goods

There will be a surplus of a product when:

consumers want to buy less than producers offer for sale.

The cross elasticity demand for electricity with respect to the price of natural gas has been estimated as being equal to 0.2. This implies that:

electricity and natural gas are substitutes.

For which of the following is the cross elasticity of demand most likely a large positive number?

french fries and onion rings

The long-run price elasticity of supply of crude oil is ______ the short-run price elasticity of supply of crude oil.

greater than

A major state university in the South recently raised tuition by 12%. An economics professor at this university asked his students, "Due to the increase in tuition, how many of you will transfer to another university?" One student out of about 300 said that he or she would transfer. Based on this information, the price elasticity of demand for education at this university is:

highly inelastic

Suppose the price elasticity of demand for fishing lures equals 1 in South Carolina and 0.63 in Alabama. To increase revenue, fishing lure manufacturers should:

leave prices unchanged in South Carolina and raise prices in Alabama.

The price elasticity of demand:

measures the responsiveness of quantity demanded to a change in price.

Which of the following would be most likely to have a vertical supply curve?

paintings by Van Gogh

The price elasticity of demand for skiing lessons in New Hampshire is over 1.00. This means that the demand is ______ in New Hampshire.

price elastic

An increase in the quantity demanded means that:

price has declined and consumers therefore want to purchase more of the product.

Suppose the price elasticity of demand for cheeseburgers equals 0.37. This means the overall demand for cheeseburgers is:

price inelastic.

Which of the following is most likely to be an normal good?

steak

Because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement indicates that:

the amount of oranges that will be available at various prices has declined.

An increase in demand means that:

the demand curve has shifted to the right.

In a competitive market the equilibrium price and quantity occur where:

the downsloping demand curve intersects the upsloping supply curve.

Which of the following is most likely to be an inferior good?

used clothing

A perfectly price-inelastic demand curve is:

vertical

You manage a popular nightclub and lately revenues have been disappointing. Your bouncer suggests that raising drink prices will increase revenues, but your bartender suggests that decreasing drink prices will increase revenues. You aren't sure who is right, but you do know that:

your bouncer thinks the demand for drinks is inelastic, while your bartender thinks the demand for drinks is elastic.