question
a study of the per capita consumption of gasoline in 10 countries demonstrates
the consumption of gasoline does not appear to be related to the price of gasoline
higher gasoline prices do result in lower consumption of gasoline
higher gasoline prices actually increase the consumption of gasoline
higher gasoline prices reduce consumption in some of those countries but not in others
the consumption of gasoline does not appear to be related to the price of gasoline
higher gasoline prices do result in lower consumption of gasoline
higher gasoline prices actually increase the consumption of gasoline
higher gasoline prices reduce consumption in some of those countries but not in others
answer
higher gasoline prices do result in lower consumption of gasoline
question
when demand is inelastic, an increase in price causes the seller's total revenue to
increase
decrease
remain the same
fall to zero
increase
decrease
remain the same
fall to zero
answer
increase
question
when demand is inelastic an increase in price leads to
an increase in total expenditures
a decrease in total expenditures
no change in total expenditures
an undetermined change in expenditures
an increase in total expenditures
a decrease in total expenditures
no change in total expenditures
an undetermined change in expenditures
answer
an increase in total expenditures
question
recent research estimates that the short-run price elasticity of demand for gasoline in the U.S. is -0.3, and the long-run price elasticity of demand is -1.4. What happens if the government increases the federal gasoline tax?
answer
consume expenditures on gasoline increase over the short-run and decline over the long=run
question
opposite of bandwagon effect
answer
snob effect
question
when market externalities are present the market demand for the good in question becomes
less elastic
more elastic
unit elastic
perfectly inelastic
less elastic
more elastic
unit elastic
perfectly inelastic
answer
more elastic
question
luxury raise price reduce sales volume, strategy increase revenue if goods are subject to ____ and have _____ demand?
answer
snob, inelastic
question
software companies continually work to develop new features of their products that make it easier for users to interact and share their work. As more of these features are embedded in the software, what happens to the individual demand curve for the software products?
demand curve becomes more elastic due to the bandwagon effect
demand curve becomes less elastic due to the snob effect
demand curve shifts, buts its degree of elasticity does not change
there is no change in the individual demand curve
demand curve becomes more elastic due to the bandwagon effect
demand curve becomes less elastic due to the snob effect
demand curve shifts, buts its degree of elasticity does not change
there is no change in the individual demand curve
answer
demand curve becomes more elastic due to the bandwagon effect
question
Aggregation examples of market demand could include:
demand for home computers by households with or without children
the domestic and foreign demand for wheat
demands of different demographic groups
all of the above
demand for home computers by households with or without children
the domestic and foreign demand for wheat
demands of different demographic groups
all of the above
answer
all of the above
question
suppose that the demand for artichokes is given as Q=200-4P, what is the price elasticity of demand if the price of artichokes is $10?
0
-.25
-1
-4
negative infinity
0
-.25
-1
-4
negative infinity
answer
-.25
question
when demand is elastic, an increase in price leads to
an increase in total expenditures
a decrease in total expenditures
no change in total expenditures
an undetermined change in expenditures
an increase in total expenditures
a decrease in total expenditures
no change in total expenditures
an undetermined change in expenditures
answer
a decrease in total expenditures
question
which of the following is an example of speculative demand?
when the actual price of housing increases, the quantity demanded of housing decreases
when the expected price of housing increases, the demand for housing increases
when the price of home ownership increase, the demand for rental housing increases
when the demand for housing increases, the demand for house insurance increases
when the actual price of housing increases, the quantity demanded of housing decreases
when the expected price of housing increases, the demand for housing increases
when the price of home ownership increase, the demand for rental housing increases
when the demand for housing increases, the demand for house insurance increases
answer
when the expected price of housing increses, the demand for housing increases
question
which of the following are examples of situations with negative network externalities?
a crowded beach
a rare work of art
clothing made to order
all of the above
a crowded beach
a rare work of art
clothing made to order
all of the above
answer
all of the above
question
when network externalities are present?
we can obtain the market demand curve simply by summing individuals' demands
one person's demand also depends on the demands of other people
a person's demand cannot be affected by the number of other people who have purchased the good
the social cost of production is larger than the private cost
we can obtain the market demand curve simply by summing individuals' demands
one person's demand also depends on the demands of other people
a person's demand cannot be affected by the number of other people who have purchased the good
the social cost of production is larger than the private cost
answer
one person's demand also depends on the demands of other people
question
a positive network externality associated with a good
yields more intrinsic value than without it
yields more extrinsic value but less intrinsic value from its consumption
results in less intrinsic or extrinsic value
is not associated with the value of a good in any way
yields more intrinsic value than without it
yields more extrinsic value but less intrinsic value from its consumption
results in less intrinsic or extrinsic value
is not associated with the value of a good in any way
answer
yields more intrinsic value than without it
question
when demand is written as log(Q)= -0.23 -0.34log(p) + 1.33log(l) the price elasticity of demand equals
answer
-0.34
question
when a demand curve is expressed in log-linear form the coefficients of the demand determinants correspond to
changes in determinants other than price
the elasticity values of those determinants
the parameters that may fluctuate in value
the independent variables in the model
changes in determinants other than price
the elasticity values of those determinants
the parameters that may fluctuate in value
the independent variables in the model
answer
the elasticity values of those determinants
question
estimations of demand are used as input in this type of scenario
understanding automobile demand to decide whether to offer below-market-rate loans for new cars
understanding the demand for oil in order to impose a new oil import tax
as input into a firm's decision-making process
all of the above
understanding automobile demand to decide whether to offer below-market-rate loans for new cars
understanding the demand for oil in order to impose a new oil import tax
as input into a firm's decision-making process
all of the above
answer
all of the above
question
the advantage of an isoelastic demand curve is that
both price and income elasticities are constant along the curve
price elasticity is constant and income elasticity changes along the curve
income elasticity is constant and price elasticity changes along the curve
both price and income elasticity change along the curve
both price and income elasticities are constant along the curve
price elasticity is constant and income elasticity changes along the curve
income elasticity is constant and price elasticity changes along the curve
both price and income elasticity change along the curve
answer
both price and income elasticities are constant along the curve
question
which of the following algebraic forms of a demand curve yields an isoelastic demand curve
answer
log(Q)=a-b log(p)+c log(l)
question
in demand equation log(Q)=a-b log(p)+ b2 log(p2) c log(l), where p is the price of the good in question. P2 is the price of a second good I is income, the second related good is
a normal good
an inferior good
a substitute for the good in question
a complement for the goo in question
a normal good
an inferior good
a substitute for the good in question
a complement for the goo in question
answer
a substitute for the good in question-9
question
when demand is written as log(Q)= -0.23 -0.34log(p) + 1.33log(l) the income elasticity of demand indicates that demand is an ___ good
inferior
normal
typical
substandard
luury
inferior
normal
typical
substandard
luury
answer
normal
question
The horizontal summation of the demands of each consumer at different price levels is called:
A) the market demand curve.B) the price elasticity of market demand.C) speculative demand.D) consumer surplus.
A) the market demand curve.B) the price elasticity of market demand.C) speculative demand.D) consumer surplus.
answer
market demand curve
question
elastic
answer
>1
question
inelastic
answer
<1
question
neccessity
answer
<1
question
luxury
answer
>1
question
inferior
answer
<0
question
normal
answer
>0
question
perfect inelastic demand curve
answer
vertical
question
perfect elastic demand curve
answer
horizontal
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