Which would cause a rightward shift in the supply curve for telephone service Aan increase in the price of telephones Ban improvement in telephone technology Can increase in consumer incomes in the

1. Which would cause a rightward shift in the supply curve for telephone service?
2. Aan increase in the price of telephones
3. Ban improvement in telephone technology
4. Can increase in consumer incomes in the economy
5. Dan increase in the wage of telephone workers

 

QUESTION 2

1. A luxury good has an income elasticity of demand that is greater than zero but less than one
2. True
3. False

 

QUESTION 3

1. The price elasticity of demand measures consumer responsiveness to a change in the price of the product
2. True
3. False

 

QUESTION 4

1. Even though local newspapers are very inexpensive, people rarely buy more than one of them each day This fact:
2. Aimplies that, for most people, the marginal benefit of reading a second newspaper is less than the marginal cost
3. Bis an example of irrational behavior
4. Cimplies that reading should be taught through phonics rather than the whole language method
5. Dcontradicts the economic perspective

 

QUESTION 5

1. Suppose the original quantity demanded for good R is 20 units and the new quantity demanded for R is 10 units For good T, the original price is $8 and the new price is $6 What is the cross-price elasticity of demand between R and T (using the arc or midpoint formula)?
2. A1/2
3. B233
4. C2/3
5. D043
6. E5

 

QUESTION 6

1.  
2. Which diagram above illustrates the effects on the Pizza market of a higher wage rate for Pizza workers?
3. AB
4. BA
5. CD
6. DC

 

QUESTION 7

1. Orange juice and tomato juice are considered as substitutes A freeze in Florida that affects the production of orange will decrease the price of tomato juice
2. True
3. False

 

QUESTION 8

1. Which of the following is most likely to be an inferior good?
2. Asteak
3. Bfur coats
4. Cused clothing
5. Docean cruises

 

QUESTION 9

1. If the quantity demanded for good A increases from 40 to 60 when price decreases from $9 to $7, the absolute value of the price elasticity of demand in this price range is 16
2. True
3. False

 

QUESTION 10

1. If the price elasticity of demand for a good is 75, the demand for the good can be described as:
2. Aelastic
3. Bnormal
4. Cinelastic
5. Dinferior

 

QUESTION 11

1. When demand is inelastic, an increase in price will lead to an increase in total revenue for the product
2. True
3. False

 

QUESTION 12

1. A state government wants to increase the taxes on cigarettes to increase tax revenue This tax would only be effective in raising new tax revenues if demand is:
2. Aunity elastic
3. Binelastic
4. Cperfectly elastic
5. Delastic

 

QUESTION 13

1. Households are the buying side in the resource markets
2. True
3. False

 

QUESTION 14

1. When demand is unit elastic, an increase in price will lead to increased total revenue for the product
2. True
3. False

 

QUESTION 15

1. If the demand for a normal good (for example, steak) shifts to the left, the most likely reason is that:
2. Athe price of steak has risen
3. Bconsumer incomes have fallen
4. Ccattle production has declined
5. Dthe price of cattle feed has gone up

 

QUESTION 16

1. For a negative externality, there are external benefits for the bystanders
2. True
3. False

 

QUESTION 17

1. If there is a shortage of farm workers, we would expect
2. Athe prices of farm products to decrease
3. Ba decrease in the demand for substitutes
4. Cthe wages of farm workers to increase
5. Dthe wages of farm workers to decrease

 

QUESTION 18

1. The process by which economists test hypotheses against facts to develop theories, principles, and models is called:
2. Athe economic perspective
3. Bmicroeconomcis
4. Cpolicy economics
5. Dthe scientific method

 

QUESTION 19

1. An economy cannot produce at a point outside of its production possibilities curve because of lack of appropriate technology
2. True
3. False

 

QUESTION 20

1. Along a linear downward-sloping demand curve, the price elasticity of demand will be:
2. Agreater than one across each price range
3. Bdifferent across each price range
4. Cless than one across each price range
5. Dequal to zero across each price range

 

QUESTION 21

1.  
2. In the figure above, the initial demand curve is D₁and the supply curve is S₁ Which of the following conditions would be most likely to change equilibrium from point A to point D?
3. AAn increase in the price of a substitute good
4. BAn increase in the price of a complementary good
5. CAn increase in income
6. DLower productivity
7. EA decrease in the price of good X

QUESTION 22

1. Which of the following is likely to have the most elastic demand curve?
2. ATobacco products
3. BHonda automobiles
4. CGasoline
5. DMedical services

 

QUESTION 23

1. Which of the following statements pertains to macroeconomics?
2. AThe Pumpkin Center State Bank increased its interest rate on consumer loans by 1 percentage point
3. BThe national productivity rate grew by 27 percent last year
4. CA decline in the price of soybeans caused farmer Wanek to plant more land in wheat
5. DBecause the minimum wage was raised, Mrs Olsen decided to enter the labor force

 

QUESTION 24

1. We can predict with certaintity the change in equilibrium quantity if both demand and supply shift to the right
2. True
3. False

 

QUESTION 25

1. Which of the following might notcause a shift in the demand curve for bacon?
2. AThe price of bacon at the supermarket is cut in half
3. BThe price of “Leaner-Than-Cardboard-But-Slightly-Tastier Strips,” a highly successful and popular low-fat substitute for bacon, is cut in half
4. CA popular talk show host claims that a direct link exists between the consumption of bacon and cancer
5. DCNN announces that pork from certain regions of the country has been tainted and is not safe for human consumption
6. EThe price of beef sausages doubles

 

QUESTION 26

1. Too little money causes deflation in the economy
2. True
3. False

 

QUESTION 27

1. The elasticity of supply for a product such as automobiles will normally be greater over a time period of:
2. A1 month
3. B5 years
4. C1 year
5. D6 months

 

QUESTION 28

1. Goods and services flow from firms to households through the resource markets
2. True
3. False

 

QUESTION 29

1. Governments want to implement a price hike policy to significantly reduce the consumption of cigarettes This policy will be effective if demand is inelastic
2. True
3. False

 

QUESTION 30

1. Which of the following would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?
2. ASupply increases while demand decreases
3. BBoth demand and supply increase
4. Cdemand increases and supply decreases
5. DBoth demand and supply decrease

 

QUESTION 31

1. Macroeconomics is best defined by which statement?
2. AMacroeconomics is the study of how individual prices are determined
3. BMacroeconomics is the study of how firms maximize their profits
4. CMacroeconomics is the study of the entire economy
5. DMacroeconomics is the study of the consumption patterns of low-income households

 

QUESTION 32

1. (The following economy produces two products: wheat and steeel)
2.  
3.  
4. Refer to the above table Moving from point A to point D, the total opportunity cost of the three units of steel is:
5. A45 units of wheat
6. B20 units of wheat
7. C15 units of wheat
8. D55 units of wheat

 

QUESTION 33

1. Which of the following will cause the demand curve for product A to shift to the left?
2. Apopulation growth that causes an expansion in the number of persons consuming A
3. Ban increase in money income if A is an inferior good
4. Can increase in money income if A is a normal good
5. Da decrease in the price of complementary product C

 

QUESTION 34

1. For an inferior good, a decrease in income will reduce the demand for the product
2. True
3. False

 

QUESTION 35

1. Demand for a product is more elastic in the long run than in the short run
2. True
3. False

 

QUESTION 36

1. If market demand increases and market supply decreases, then the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes
2. True
3. False

 

QUESTION 37

1. Nicky makes $25,000 a year as a sales clerk He then decides to quit his job to enter an MBA program full-time (assume Nicky doesn’t work in the summer or hold any part-time jobs) His tuition, books, living expenses, and fees total $15,000 a year Given this information, the annual total cost of Nicky’s MBA studies is
2. A$25,000
3. B$15,000
4. C$10,000
5. D$40,000
6. E$35,000

 

QUESTION 38

1. A price increase from $43 to $49 results in an increase in quantity supplied from 220 units to 240 units The price elasticity of supply in this price range is:
2. A067
3. B03
4. C333
5. D150

 

QUESTION 39

1. (The following economy produces two products: wheat and steel)
2.  
3. Refer to the above table Moving from point C to point D, the opportunity cost of the third unit of steel is:
4. A30 units of wheat
5. B10 units of wheat
6. C15 units of wheat
7. D20 units of wheat

 

QUESTION 40

1. A production possibilities curve shows:
2. Athat people prefer one of the goods more than the other
3. Bthat resources are unlimited
4. Cthe maximum amounts of two goods that can be produced assuming the full and efficient use of available resources
5. Dcombinations of capital and labor necessary to produce specific levels of output

 

QUESTION 41

1. Ideally, normative statements are involved at the:
2. Alevel of facts only
3. Blevels of facts and theory only
4. Clevels of facts, theory, and policy
5. Dlevel of policy only

 

QUESTION 42

1. Normative statements are objective while positive statements are subjective
2. True
3. False

 

QUESTION 43

1. If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a price:
2. Adecrease will increase total revenue in the short run but decrease total revenue in the long run
3. Bincrease will decrease total revenue in the short run but increase total revenue in the long run
4. Cdecrease will decrease total revenue in the short run and decrease total revenue in the long run
5. Dincrease will increase total revenue in the short run but decrease total revenue in the long run

 

QUESTION 44

1.  
2. Which of the following shows the flows of resources?
3. A1
4. B2
5. C3
6. D4

 

QUESTION 45

1. Suppose that the president of a college argues that a 25 percent increase in tuition will raise total revenue It can be conclude that the president thinks that demand to attend this college is
2. Aperfectly elastic
3. Belastic
4. Cinelastic
5. Dunitary elastic

 

QUESTION 46

1. The price elasticity of demand for a product depends on
2. Athe income of buyers
3. Bincome of buyers and degree of competition
4. Cthe availability of substitutes
5. Dthe degree of competition
6. Eincome of buyers and availability of substitutes

 

QUESTION 47

1. Which of the following items is likely to have the highest positive income elasticity of demand?
2. ASoap
3. BHousehold electrical service
4. CBread
5. DJewelry
6. ETable salt

 

QUESTION 48

1. An increase in demand with no change in supply will increase equilibrium price and reduce equilibrium quantity
2. True
3. False

QUESTION 49

1. If the price elasticity of demand for a good is 3 Then total revenue will increase in price of the good raises
2. True
3. False

 

QUESTION 50

1. Goods with few substitutes tend to have inelastic demand curves
2. True
3. False