question
A downward sloping demand curve can be explained by
answer
I, III, and IV only
question
Which of the following will not change the demand for oranges?
answer
A change in the price of oranges
question
If there is an increase in demand for a good, what will most likely happen to the price and quantity of the good exchanged?
answer
Increase, Increase
question
If hot dogs are an inferior good, an increase in income will result in
answer
a decrease in the demand for hot dogs.
question
An increase in the price if gasoline will cause the demand curve for tires to shift in which direction?
answer
To the left, because gasoline and tires are complements
question
Assume that coal is a normal good. If the price of coal increases and the quantity sold increases, which of the following is consistent with these observations?
answer
The price of oil increased, oil and coal being substitutes.
question
During a football game, it starts to rain and the temperature drops. The senior class, which runs the concession stand and is studying economics, raises the price of coffee from 50 cents to 75 cents a cup. They sell more than ever before. Which answer explains this?
answer
The demand for coffee increased.
question
Which of the following statements best reflects the law of diminishing marginal utility?
answer
"I couldn't eat another doughnut if you paid me."
question
Which of the following will not cause the demand curve for athletic shoes to shift?
answer
A decrease in the price of athletic shoes
question
Assume that the demand for apples is downward sloping. If the price of apples falls from $0.80 per pound to $0.65 per pound, which of the following will occur?
answer
A larger quantity of apples will be demanded.
question
C
answer
On the graph above, what are represents consumer surplus when the price is $10?
question
If the cost of producing automobiles increases, the price, equilibrium quantity and consumer surplus will most likely change in which of the following ways?
answer
Increase, Decrease, Decrease
question
I and IV only
answer
Compare 2000 with 2001. Which of the following statements is (are) true?
question
Producer surplus is the
answer
amount the seller is paid less the cost of production.
question
During the 1990's, the price of VCRs fell by about 30%, and quantity sold decreased by the same amount. The demand for VCRs must
answer
have shifted to the left.
question
Which of the following will occur if a legal price floor is placed on a good below its free market equilibrium?
answer
The equilibrium price will ration the good.
question
A marketing survey shows that gate receipts would increase if the price of tickets to a summer rock concert increased, even though the number of tickets sold would fall. What does this imply about the price elasticity of demand for concert tickets?
answer
Demand is inelastic.
question
Shortages will occur.
answer
According to the graph above, which of the following will occur if a legal price cieling is impose at price X?
question
Which of the following statements about price controls is true?
answer
Price cielings and price floors result in a misallocation of resources.
question
If the price of lunch at the school cafeteria revenue remains constant, the elasticity of demand for a school lunch must be
answer
unit elastic.
question
If an excise tax is imposed on a product, consumer surplus and producer surplus for this good will most likely change in which of the following ways?
answer
Decrease, Decrease
question
If the price of paperback books increases and consumer expenditures on paperback books also increase, which of the followinf is necessarily true?
answer
The demand for paperback books is elastic.
question
The substitution effect causes a consumer to buy less of a product when the price increases because the
answer
product is now more expensive compared to similar products.
question
Product B and D only
answer
Based on the information in the table above, which product(s) is/are inferior?
question
Brooke is spending all of her income consuming products X and Y. If MUx /Px = 10 and MUy/Py = 6, what should Brooke do to maximize her satisification?
answer
Buy more X and less Y.
question
If the price of a good decreases by 3 percent and total revenue increases, the elasticity of demand for the good could possibly be
answer
1.3
question
Advocates of higher minimum wages for unskilled labor defend their position by arguing that
answer
low-income workers deserve to earn incomes above the poverty level.
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