HPU ECO2030 Principals of Microeconomics – Quiz 1

If a person drives with less care after purchasing auto insurance, this situation would be an example of a(n)

The demand schedules for such products as eggs, bread, and electricity tend to be

If government set a maximum price of $45 in the market,

An extraordinarily small crop of farm products due to drought causes

Which of the following do economists consider to be capital?

Market failure is said to occur whenever

A leftward shift of a product supply curve might be caused by

Which of the following is an example of a public good?

If a firm's demand for labor is elastic (with respect to the workers' wage), a union-negotiated wage increase will

Refer to the diagram. A shortage of 160 units would be encountered if price was

The more time consumers have to adjust to a change in price,

Refer to the table. Over the $10-$8 price range, the elasticity coefficient of supply is

The (private) opportunity cost to a consumer who smokes cigarettes consists of the

If quantity demanded of a product is completely unresponsive to its price changes, then its price elasticity of demand is

Measured in terms of farm employment and the number of farms, the agriculture sector in the U.S. has been

In response to the terrorist attacks of September 11, 2001, the government decided to allocate more resources toward defense goods. The government's decision reflects their assessment that

Assume that the demand curve for product C is downsloping. If the price of C falls from $2.00 to $1.75,

Which of the following best describes the main problem faced by farms in the long run?

Refer to the table. Over the $6-$4 price range, supply is

An improvement in production technology will

Suppose that a firm has "pricing power" and can segregate its market into two distinct groups based on differences in elasticities of demand. The firm might charge

We would expect

The optimal allocation of resources is found

Which of the following would be considered an example of adverse selection?

The demand for a product is inelastic with respect to price if

An economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. This prediction assumes that

The demand for agricultural products rises less rapidly than income. This means that the demand for agricultural products is

The parity ratio

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand ( D) for, or supply ( S) of, X; (2) the equilibrium price ( P) of X; and (3) the equilibrium quantity ( Q) of X.

An increase in the price of a product that is a complement to X will

The price elasticity of demand is relatively inelastic

The price elasticity of demand is relatively elastic

The law of supply indicates that, other things equal,

Agricultural price support policy in the U.S. has been criticized because they

Refer to the diagram. The equilibrium price and quantity in this market will be

An improvement in the technology used to produce X will

Refer to the diagram. Starting at point A, the opportunity cost of producing each additional unit of tractors is

If the production of a product or service involves external benefits to the society, then the government can improve efficiency in the market by

Refer to the diagram. A surplus of 160 units would be encountered if the price was

The two main characteristics of a public good are

It is estimated that the price elasticity coefficient for farm products is 0.2. Therefore, in order for consumers to increase their purchases of farm products by 10 percent, the prices of these products would have to fall

The production possibilities curve shows

A negative externality or spillover cost occurs when

From an economic perspective, when a consumer decides to buy more life insurance, the consumer has most likely concluded that the

The price elasticity of demand is unity

Which of the following goods (with their respective income elasticity coefficients in parentheses) will most likely suffer a decline in demand during a recession (when people lose jobs and the income in the economy goes down)?

In this market, economists would call a government-set minimum price of $50 a

Blu-ray players and Blu-ray discs are

The opportunity cost of doing or getting something is defined as

Refer to the provided supply and demand graph of Product X. What would happen if the government taxed the producers of this product because it has negative externalities in production?

If a firm finds that it can sell $13,000 worth of a product when its price is $5 per unit and $11,000 worth of it when its price is $6, then