Economics unit 2 exam
Shelter for homeless people is an example of
a need
As the price of computers falls, the quantity of computers demanded increases. This is an application of
the law of demand
If the cross-price elasticity of demand between blueberries and yogurt is negative, then the two goods are:
complements.
If the percentage change in the price of a good is less than the resulting percentage change in the quantity demanded of that good, then the demand for that good is:
elastic.
According to the law of demand, when the price of shoes ______ people will consume ______ shoes.
falls, more
After subsistence levels of food, shelter, and clothing have been provided, economists refer to all other goods and services as:
"wants"
Which of the following is NOT a characteristic of a perfectly competitive market?
Each firm in the market sells a somewhat different variant of the good
Which of the following is NOT true of a perfectly competitive firm?
It seeks to maximize revenue.
Joe is shopping for a new computer. A computer can be delivered to Joe's home for $1,200. Alternatively, Joe can pick up the same computer at the warehouse for $1,000. How should Joe buy the computer?
Joe should drive to the warehouse if his cost of driving to the warehouse is less than $200.
Which of the following best explains why you are more likely to see a poor person than a wealthy person picking up aluminum cans to sell?
The opportunity cost of picking up cans is higher for wealthy people than for poor people.
A good's nominal price is the:
absolute price of the good in dollar terms.
A change in consumers' incomes causes a change in:
demand.
A rational seller will sell another unit of output:
if the cost of making another unit is less than the revenue gained from selling another unit.
Total revenue minus both explicit and implicit costs defines a firm's:
profit.
If the percentage change in the price of a good is equal to the percentage change in the quantity demanded of that good, then the demand for that good is:
unit elastic.
Individual supply curves generally slope ______ because ______.
upward; of increasing opportunity costs.
Satellite TV is a close substitute for cable TV. In the 1990's, small satellite TV units were developed that made it less costly for individual consumers to subscribe to satellite TV service. This caused the price elasticity of demand for cable TV service to:
become more elastic.
A profit-maximizing perfectly competitive firm must decide:
only how much to produce, taking price as fixed
When the price of a good rises, people:
tend to buy cheaper substitutes instead
The tendency for consumers to purchase more of a good or service as its price falls is captured by:
the law of demand.
If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then the price elasticity of demand is equal to:
0.5
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:
2%.
If the price elasticity of demand for pineapples is 0.75, then a 4% increase in the price of pineapples will lead to a:
3% decrease in the quantity of pineapples demanded.
You have found data that indicates that the income elasticity of demand for generic (unbranded) shampoo is -0.7. You should conclude that generic shampoo:
is an inferior good
In some countries, medical care is provided free-of-charge to citizens and is paid for by the government. In those countries, medical care:
is rationed by some non-monetary method.
The primary objective of most private firms is to:
maximize profit.
In most markets, scarce goods or services are rationed among competing users using:
monetary prices
The dollar price of a good relative to the average dollar price of all other goods and services is the good's:
real price