Microeconomics final exam

If the price of Good X rises from $4 to $5, and the quantity demanded of it falls from 200 units to 180 units, the absolute value of the price elasticity of demand is:

0.47

total revenue is

Price x Quantity

as the price of oil rises

consumers increasingly use oil for those purposes without good substitutes meaning the demand curve is negatively sloped

a 4 percent increase in the price of beer will cause a 1 percent decline in the quantity of beer demanded. the demand for beer

b. inelastic

an early frost in the vineyards of Napa Valley would cause

decrease in the supply of wine increasing price

if the demand curve is inelastic a price __________ causes a_____________ in revenues

decreases,decreases

immediately after a hurricane it is likely that the quantity demanded for tree cutting removal services will

exceed,rise

increase the demand of beef =

higher consumer income

since the demand curve for computer chips is elastic, a decrease in the price of computer chips caused by an increase in productivity will

increase revenue for the computer chip industry and make computers a larger share of the American economy

Since the demand for illegal drugs is quite inelastic, an increase in the price of illegal drugs:

increase sellers revenues

When Asian countries went into a recession in 1997, the demand for oil _______ and the price of oil ________.

increased, increased

the elasticity of demand measures how sensitive the

quanity demanded is to change in price

`the demand curve for physician office visits is quite inelastic therefore a

small increase in price causes quantity demanded to increase by a lot

supposed it is widely believed that the price of flat screen high definition televisions will be lower next year then

the demand for flat screens tv's would decrease now

an increase in supply and a decrease in demand occur in a market what happens to the equilibrium price and quantity

the equlibrium price decrease the change in the equlibrium quanity is ambiguous

the law of demand states

the lower the price, the greater the quantity demanded

a firm produces volleyballs and soccer balls if the market price of volleyballs increases

the opportunity cost of producing soccer balls rises, so the supply curve of soccer balls decreases

the demand curve for froot loops breakfast cereal is very elastic because

there are many good substitutes for Froot loops

a change in the price reflected by a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve true or false

true

the formation of the organization of the petroleum exporting countries(OPEC)made it easier for these oil producing countries to act together and successfully limit the supply of oil thus raising prices true or false

true