question
slope downward
answer
1) According to the Law of Demand, the demand curve for a good will A) shift leftward when the price of the good increases. B) shift rightward when the price of the good increases. C) slope downward. D) slope upward.
question
C. They are substitutes
answer
2) Suppose the market demand curve for pizza can be expressed as QD = 100 - 2P + 3Px + 0.8 Y, where QD is the quantity of pizza demanded, P is the price of pizza, Px is the price of a related commodity X, and Y represents consumers' income. What is the relationship between commodity X and pizza, from the point of view of consumers? A) They are independent. B) They are complements. C) They are substitutes. D) Not enough information to answer the question.
question
as a group, consumers are willing and able to pay less for a product
answer
3) If a demand curve shifts left, it implies A) as a group, consumers are willing and able to pay less for the product. B) as a group, consumers are willing and able to pay more for the product. C) government has regulated how many people can purchase the product. D) the profit motive of the firms is making the price too high.
question
A. the demand curve is relatively steep than if the demand curve is relatively flat
answer
1) The change in price that results from a leftward shift of the supply curve will be greater if A) the demand curve is relatively steep than if the demand curve is relatively flat. B) the demand curve is relatively flat than if the demand curve is relatively steep. C) the demand curve is horizontal than if the demand curve is vertical. D) the demand curve is horizontal than if the demand curve is downward sloping.
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B. butter
answer
3) Consider the following products. Which of them has the flattest demand curve? A) insulin B) butter
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B. -3
answer
4) If the demand curve for orange juice is expressed as Q = 2000 - 500p, where Q is measured in gallons and p is measured in dollars, then at the price of $3, elasticity equals A) -0.33. B) -3. C) -9. D) -17
question
A. elastic
answer
5) If the demand for orange juice is expressed as Q = 2000 - 500p, where Q is measured in gallons and p is measured in dollars, then at the price of $3, the demand curve A) is elastic. B) has a unitary elasticity. C) is inelastic. D) is perfectly inelastic.
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A. not very sensative to price
answer
6) If the price elasticity of demand for a good is less than one in absolute value, economists would characterize consumers of this good A) as not very sensitive to price. B) as not very sensitive to the quantity they demand. C) as very sensitive to price. D) as elastic.
question
A. 2* (1000/2099)
answer
7) The market demand for wheat is Q = 100 - 2p + 1pb + 2Y. If the price of wheat, p, is $2, and the price of barley, pb, is $3, and income, Y, is $1000, the income elasticity of wheat A) is 2 ∗ (1000/2099). B) is 2. C) is 1/2 ∗ (1000/2099). D) Cannot be calculated from the information provided.
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Macroeconomics
answer
The economics area that deals with output, employment, incomes, and other activities for the entire economy is known as
question
Normative Economics
answer
"The unemployment rate in the U.S. should be zero percent". This statement is an example of
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False
answer
according to law of demand, whenprice increases consumers will be demanding more
question
Own-price and quantity demnaded
answer
A demand curve plots the relationship between,
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True
answer
Everything else being constant, if the income of the consumer increases the demand curve will shift to the right
question
Change in own-price
answer
What can cause a movement along the demand curve?
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True
answer
A shift in the demand curve is known as " change in demand"
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False
answer
Supply curve plots the relationship between price and income
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positively sloped or upward sloping
answer
According to the law of supply a supply curve is
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increase in input prices
answer
Ceteris paribus, which of the following can shift the supply curve to the left
question
False
answer
A movement along the supply curve is known as change in supply
question
as a group, consumers are willing and able to pay less for a product
answer
If a demand curve shifts left, it implies
question
change in production condition
answer
A change in supply, or a shift in the supply curve, may result from which of the following?
question
The supply of corn would decrease, increasing the price of corn
answer
Suppose the price of fertilizer, an input in corn production, were to increase everything else being constant. Which of the following would be expected to occur?
question
An increase in the equalibrium price
answer
A leftward shift in the supply curve combined with a rightward shift in the demand curve will result in which of the following?
question
P=40 Q=60
answer
If demand for show tickets is described by the equation QD =100 - p, and supply is QS = 20 + p, find the equilibrium price and quantity.
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False
answer
Own price elasticity of demand is the % change in the price of the commodity over the % change in quantity demanded
question
Change in own price of the commodity
answer
Own price elasticity of demand measures the responsiveness or sensitivity of quantity demanded as a result of
question
negative
answer
The sign of own price elasticity of demand is
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Inelastic
answer
The demand curve for necessary goods are most likely to be
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True
answer
Steeper the demand curve the more inelastic the demand will be
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False
answer
If the the absolute value of elasticity of demand is equal to 0.3 the demand of the consumer is considered elastic
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True
answer
Income elasticity of demand measures the responsiveness of quantity demanded by a consumer to the change in income of a consumer
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0.01
answer
Consider the following equation: Q=104 - 40P - 20Pt + 0.01YWhat is the value of (change in Q/change in Y)?
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False
answer
The sign of income elasticity of demand for an inferior good will be positive
question
2 ∗ (1000/2099)
answer
The market demand for wheat is Q = 100 - 2P + 1Pb + 2Y. If the price of wheat, P is $2, and the price of barley, Pb, is $3, and income, Y is $1000, the income elasticity of wheat is
question
Normal good
answer
The market demand for wheat is Q = 100 - 2p + 1pb + 2Y. If the price of wheat, P is $2, and the price of barley, Pb, is $3, and income, Y, is $1000. Is wheat a normal or inferior good for this particular consumer and why?
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the price of a related good y
answer
The cross price elasticity of demand for a good x is the percentage change in the quantity demanded of good x in response to a given percentage change in
question
True
answer
The cross price elasticity of demand between two goods will be positive if they are substitutes
question
A. P=300 Q=400
B. P=350
C. Since cowboy hats are a substitute good, the demand will rise
B. P=350
C. Since cowboy hats are a substitute good, the demand will rise
answer
2. Suppose the United States does not produce any baseball hats domestically but imports them from foreign producers. Initially, demand is and supply (from foreign producers) is Qd= 1000-2p Qs= 100+p
a). Determine the equilibrium price and quantity.
b). The government then decides that no more than 300 baseball hats should be imported per period and imposes a quota/restriction at that level. How does this quota affect the equilibrium price and quantity? Show the solution using a graph and calculate the numerical answer.
c). How might this quota affect the market for cowboy hats (a substitute good)?
a). Determine the equilibrium price and quantity.
b). The government then decides that no more than 300 baseball hats should be imported per period and imposes a quota/restriction at that level. How does this quota affect the equilibrium price and quantity? Show the solution using a graph and calculate the numerical answer.
c). How might this quota affect the market for cowboy hats (a substitute good)?
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A. W=4 Q=9600
B. Yes, at $5 an hour, there is a supply of 11,500 workers with a demand of only 9,500 leaving a 2,000 worker excess
B. Yes, at $5 an hour, there is a supply of 11,500 workers with a demand of only 9,500 leaving a 2,000 worker excess
answer
3. In a competitive labor market, demand for workers is QD = 10,000 – 100W, and supply is QS = 2,000 + 1,900W, where Q is the quantity of workers employed and W is the hourly wage.
a). What is the initial equilibrium wage and employment level?
b). Suppose that the government decides that $5 per hour is the minimum allowable wage in any market, in this case will there be any excess supply of labor in the market? (Just explain your answer for this one. No calculations needed)
question
At equalibrium, all products demanded are supplied and all products supplied are demanded, therefore clearing the market
answer
Explain why equalibrium price is also known as market clearing price.
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D. in both the slope and the intercept of the function
answer
Consider the demand function Qd = 150 - 2P. The effects of other determinants of Qd is reflected in
A) the intercept of the function.
B) the slope of the function.
C) neither the slope nor the intercept of the function.
D) in both the slope and the intercept of the function.
A) the intercept of the function.
B) the slope of the function.
C) neither the slope nor the intercept of the function.
D) in both the slope and the intercept of the function.
question
C. They are substitutes
answer
Suppose the market demand curve for pizza can be expressed as QD = 100 - 2P + 3Pb, where QD is the quantity of pizza demanded, P is the price of pizza, and Pb is the price of a burrito. What is the relationship between burritos and pizza, from the point of view of consumers?
A) They are independent.
B) They are complements.
C) They are substitutes.
D) Not enough information to answer the question.
A) They are independent.
B) They are complements.
C) They are substitutes.
D) Not enough information to answer the question.
question
D. P=20-.2q
answer
If the demand for oranges is written as Q = 100 - 5p, then the inverse demand function is
A) Q = 5p - 100.
B) Q = 20 - .2p.
C) p = 20 - 5Q.
D) p = 20 - .2Q.
A) Q = 5p - 100.
B) Q = 20 - .2p.
C) p = 20 - 5Q.
D) p = 20 - .2Q.
question
A. the market quantity demanded at a price of $10 is at least 13 movies per week
answer
Assume the price of a movie is $10. Jenna demands 2 movies per week, Sam demands 3 movies per week, and Jordan demands 8 movies per week. From this information we can conclude that
A) the market quantity demanded at a price of $10 is at least 13 movies per week.
B) Jordan is obviously more wealthy than either Sam or Jenna.
C) Sam is irrational compared to Jenna or Jordan.
D) the movie industry is unprofitable
A) the market quantity demanded at a price of $10 is at least 13 movies per week.
B) Jordan is obviously more wealthy than either Sam or Jenna.
C) Sam is irrational compared to Jenna or Jordan.
D) the movie industry is unprofitable
question
C. an increase in both price and quantity
answer
Suppose a market were currently at equilibrium. A rightward shift of the demand curve would cause
A) an increase in price but a decrease in quantity.
B) a decrease in price but an increase in quantity.
C) an increase in both price and quantity.
D) a decrease in both price and quantity
A) an increase in price but a decrease in quantity.
B) a decrease in price but an increase in quantity.
C) an increase in both price and quantity.
D) a decrease in both price and quantity
question
depends on how long it takes for consumers and firms to adjust for a particular good
answer
The duration of the short run
question
False
answer
In immediate short run the quantity supplied is highly responsive to change in price
question
horizontal
answer
In the ultimate long run the market supply curve is
question
perfectly inelastic
answer
The price elasticity of supply when the supply curve is Q = 5 is
question
.091
answer
If the supply curve for orange juice is estimated to be Q = 40 + 2p, then, at a price of $2, the price elasticity of supply is
question
True
answer
Positive statements are statements of fact, or cause and effect that can be tested by examining the facts.
question
True
answer
Normative statements are statements or conclusions that involve judgment.
question
Elasticity
answer
the percentage change in a variable in response to a given percentage change in another variable.
question
True
answer
The elasticity of demand is different at every point along a downward-sloping linear demand curve.
question
Infinite; perfectly elastic
answer
What is the elasticity of a horizontal demand curve?
question
perfectly inelastic or 0
answer
Along a vertical demand curve, elasticity is
question
.5
answer
Q= 104-40p+20pt+.01Y
what would be the income elasticity of demand for avocados if Q = 80 and Y = 4,000?
what would be the income elasticity of demand for avocados if Q = 80 and Y = 4,000?
question
False
answer
If the cross price elasticity is positive they are compliments.
question
True
answer
If the cross price elasticity is positive they are substitutes.
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