Micro midterm svalsted

A good that is a necessity, that is inexpensive and that has very few substitutes is likely to have a price elasticity of demand that is A) highly inelastic B) highly elastic C) unitary elastic D) slightly inelastic

A

An outward shift of a nations production possibilities frontier represents A) economic growth B) rising prices of the two goods on the production possibilities frontier model C) an impossible situation D) a situation in which a country produces more of one good and less of another

A

Tara notices that studying for one hour after class increases her economics grade by 11 points. The second hour yields a 7-point gain, the third hour yields a 4-point gain, and the fourth hour yields only a 1-point gain. This means that the marginal _____ of studying decreases with study hours. A) cost B) benefit C) opportunity cost D) time

B

if mortgage interest rates dramatically. increase what could we expect to see happen to the housing market? A) supply increases..A shortage develops..price increases...higher prices prevail B)Demand decrease..a surplus develops...price declines..lower prices prevail C)supply decreases...a shortage develops...price increase...higher prices prevail D) demand increases...a shortage develops...price increases...higher prices prevail

B

Which of the following products comes closest to having a perfectly inelastic demand? A) gasoline B) cholesterol medication in general C) iPhones D) bus rides

B

To affect the market outcome, a price ceiling A) must be set below the black market price B) must be set below legal rice C) must be set blew the price floor D) must be set below the equilibrium price

D

in the city with rent controlled apartments, all of the following are true except A) apartments usually rent for rates lower than the market rate B) apartments are often in shorter supply then they would be without rent control C) it usually takes more time to find an apartment than it would without rent control D) landlords have an incentive to rent more apartments than they would without rent control

D

Bringing oil to the market is relatively long and costly process. the whole process from exploration to pumping significant amounts of oil can take years. what does this indicate about price elasticity of supply for oil? A) the elasticity coefficient is likely to be very high and supply is inelastic B)the elasticity coefficient is likely to be close to zero and supply is perfectly elastic C) the elasticity coefficient is likely to be low and supply is highly elastic D) the elasticity coefficient is likely to be low and supply is highly elastic

A

If the marginal benefit received form consuming a good is equal to the marginal cost of production A) society well being cannot be improved by changing production B) society well being can be improved if production decreases C) society well being can be improved if production increases D) the market is producing too much of the good

A

In October 2005, the U.S Fish and wildlife services banned the important of beluga caviar, the most prized of caviars, from the Caspian Sea. what happened in the market for caviar in the U.S? A) the supply curve shifted to the left B) the supply curve shifted to the right C) the demand curve shifted to the right D) the demand curve shifted to the left

A

Scarcity refers to the situation in which A) unlimited wants exceed limited resources B) unlimited resources exceed limited wants C) a country's population is larger than its resource base D) a nations poverty level increases faster than its population

A

A good that is a luxury, that is expensive and that has many substitutes is likely to have a price elasticity of demand that is A) highly inelastic B) highly elastic C) unitary elastic D) slightly inelastic

B

A product that is in a narrowly defined market, a luxury and very expensive is likely to have a very A) deep standard of event B) high price elasticity of demand value e C) shallow standard event D) low price elasticity of demand value

B

Assume we are looking at the market for soda. A medical study is published that says soda causes cancer. How would this market likely be affected? A)Supply increases..a shortage develops..price increase...higher prices prevail B)demand decreases..a surplus develops...prices declines...lower prices prevail C)supply increases...a surplus develops...price increases...higher prices prevail D)demand increases...a shortage develops...price declines...lower prices prevail

B

Comparative advantage means the ability to produce a good or service A) at a lower selling price than any other producer B) at a lower opportunity cost than any other producer C) of a higher quality than any other producer D) at a higher profit level than any other producer

B

Suppose Bob has a part time business washing cars. He has washed nine cars on a given day; the marginal benefit of washing the tenth car is $20 and the marginal cost is $12. Bob should: A) wash the tenth car B) not wash the tenth car C)Increase his marginal benefit D) there is not enough information to decide

A

The law of demand implies, holding everything else constant that A) as the price of bagels increases, the quantity of bagels demand will decrease B) as the price of bagels increases, the demand for bagels will decrease C) as the price of bagels increases, the quantity of bagels demanded will increase D) as the price of bagels increases, the demand for bagels will increase

A

a change in all of the following variables will shift the market demand for a product except A) the price of the product B)population and demographics C) income D) tastes

A

point B is A) technically efficient B) unattainable with current resources C) inefficient in that not all resources are being used D) the equilibrium output combination

A

the actual division of the burden of a tax between buyers and sellers in a market is called A) tax incidence B) tax liability C) tax bearer D) tax parity

A

which of the following is a normative statement? A) the price of gasoline is too high B) the current high price of gasoline is the result of strong worldwide demand C) when the price of gasoline rises, quantity of gasoline purchased fails D) when the price of gasoline rises, transportation costs rise

A

which of the following statements is true regarding scarcity? A) scarcity refers to the situation in which unlimited wants exceed limited resources B) scarcity is not a problem for the wealthy C) scarcity is only a problem when a country has too large a population D) scarcity arises when there is wide disparity in income of distribution

A

Cross price elasticity of demand is calculated as the A) percentage change in quantity demanded divided by percentage change in price of a good B) percentage change in quantity demanded of one good divided by percentage change in price of a different good C) percentage change in quantity sold divided by percentage change in buyers incomes D) percentage change in quantity supplies divided by percentage change in price of a good

B

Everything else held constant, when a producer advertises the goal is to A) increase the public desire and reduce the demand for their product B) increase the publics desire and increase the demand for their product C) decrease the publics desire and increase the demand for their product D)decrease the publics desire and decrease the demand for their product

B

Point C is A) technically efficient B) unattainable with current resources C) inefficient in that not all resources are being used D) is the equilibrium output combination

B

Suppose the demand curve for a product is vertical and the supply curve is upward sloping. if a per unit tax is imposed in the market for this product, A) sellers bear the entire burden of the tax B) Byers bear the entire burden of the tax C) the tax burden will be shared equally between buyers and sellers D) buyers share the burden of the tax with government

B

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false? A) Governments face the problem scarcity in making economic decisions B) only individuals face scarcity; firms and the government do not C) Both firms and individuals face scarcity D) each faces the problem of scarcity which necessitates trade offs in making economic decisions

B

if firms do not increase their quantity supplied when price changes, then supply is A) perfectly elastic B) perfectly inelastic C) relatively inelastic D) elastic

B

in order to be binding, a price ceiling A) must lie above the free market equilibrium price B) must lie below the free market equilibrium price C) must coincide with free market equilibrium price D) must be high enough for firms to earn a profit

B

which of the following correctly comments not he following statement? "The only way to increase the revenue from selling a product is to increase the products price" A)it is not true. revenue will increase as the price o the product increases only if demand is inelastic B) This statement is not true. revenue will increase as the price of the product increases only if demand is inelastic C) the statement is true D) this statement is not true. Revenue will decrease as the price of the product increases because quantity demanded will fall

B

A demand curve which is______ represents perfectly inelastic demand, and a demand curve which is____ represents perfectly elastic demand A) downward sloping; vertical B) horizontal;downward sloping C)vertical; horizontal D) upward sloping; horizontal

C

Assume we are looking at the corn market. How would a major drought affect this market? A) supply increases...A shortage developes...price increases...higher prices prevail B) demand decreases...a surplus developes...price declines...lower prices prevail C) supply decreases...a shortage developes...price increases...higher prices prevail D)demand increases...a shortage developes...price declines...lower prices prevail

C

If price elasticity of demand for canned soup is estimated at I-1.62I. what happens to sales revenue if the price of canned soup rises? A) it rises by 162 percent B) it rises by 1.62 percent C) it falls D) it rises

C

The highest valued alternative that must be given up to engage in an activity is the definition of A) economic equity B) marginal benefit C) opportunity cost D) marginal cost

C

if the percentage increase in price is 15 percent and the value of the price of elasticity of demand is I-3I then quantity demanded A) will increase by 45 percent B) will increase by 5 percent C) will decrease by 45 percent D)will decrease by 5 percent

C

point A is A) technically efficient B) unattainable with current resources C) inefficient in that not all resources are being used D) the equilibrium output combination

C

which of the following will shift the demand curve for a good? A) a change in the technology used to produce the good B)an increase in the price of the good C)a decrease in the price of a complementary good D)a decrease in the price of the good

C

Assume we are looking at the electric car market. How would a major increase in gas price affect this market? A)supply increases...a shortage developes...price increases...higher prices prevail B)demand decreases...a surplus developes...price declines...lower prices prevail C) supply decreases...a shortage develops....price increases...higher prices prevail D)demand increases...a shortage developes...prices increases....higher prices prevail

D