question

Which of the following is an implicit cost of attending G300?

-Tuition

-Utility of taking a nap

-Cost of books and supplies

-One hour and fifteen minutes

-Tuition

-Utility of taking a nap

-Cost of books and supplies

-One hour and fifteen minutes

answer

Utility of taking a nap

question

Accounting profits are:

-total revenue minus total cost

-total cost minus total revenue

-marginal revenue minus total cost

-total revenue minus marginal cost

-total revenue minus total cost

-total cost minus total revenue

-marginal revenue minus total cost

-total revenue minus marginal cost

answer

total revenue minus total cost

question

Economic profits are:

-total revenue minus total cost

-marginal revenue minus marginal cost

-total profits of the economy as a whole

-total revenue minus total opportunity cost

-total revenue minus total cost

-marginal revenue minus marginal cost

-total profits of the economy as a whole

-total revenue minus total opportunity cost

answer

total revenue minus total opportunity cost

question

Which of the following are signals to the owners of scarce resources about the best uses of those resources?

-Economic indicators

-Profits of businesses

-Government regulations

-The accounting cost of those resources

-Economic indicators

-Profits of businesses

-Government regulations

-The accounting cost of those resources

answer

Profits of businesses

question

If you put $5,000 in a savings account at an interest rate of 5 percent, how much money will you have in one year?

$4,545

$4,762

$5,250

$5,500

$4,545

$4,762

$5,250

$5,500

answer

$5,250

question

If the interest rate is 8 percent, the present value of $1,000 received at the end of five years is:

$583.49

$630.17

$680.58

$735.02

$583.49

$630.17

$680.58

$735.02

answer

$680.58

question

A firm will have constant profits of $300,000 per year for the next three years, and the interest rate is 6 percent. Assuming these profits are realized at the end of each year, what is the present value of these future profits?

$801,904

$860,888

$905,070

$1,039,528

$801,904

$860,888

$905,070

$1,039,528

answer

$801,904

question

The difference between marginal benefits and marginal costs is the: --profits

-accounting cost

-opportunity cost

-marginal net benefits

-accounting cost

-opportunity cost

-marginal net benefits

answer

marginal net benefits

question

In order to maximize net benefits, firms should produce where: profits are zero

-marginal cost is minimized

-total benefits equal total costs

-marginal benefits equal marginal costs

-marginal cost is minimized

-total benefits equal total costs

-marginal benefits equal marginal costs

answer

marginal benefits equal marginal costs

question

The law of demand states that, holding all else constant

-as price falls, demand will fall also

-as price rises, demand will also rise

-as price falls, quantity demanded rises

-price has no effect on quantity demanded

-as price falls, demand will fall also

-as price rises, demand will also rise

-as price falls, quantity demanded rises

-price has no effect on quantity demanded

answer

as price falls, quantity demanded rises

question

If good A is an inferior good, an increase in income leads to

-a decrease in the demand for good B

-a decrease in the demand for good A

-an increase in the demand for good A

-no change in the quantity demanded for good A

-a decrease in the demand for good B

-a decrease in the demand for good A

-an increase in the demand for good A

-no change in the quantity demanded for good A

answer

a decrease in the demand for good A

question

An increase in the price of lamb will probably lead to

-a decrease in the price of steak

-an increase in demand for steak

-an increase in demand for lamb

-a decrease in the supply of lamb

-a decrease in the price of steak

-an increase in demand for steak

-an increase in demand for lamb

-a decrease in the supply of lamb

answer

an increase in demand for steak

question

An increase price of Crocs shoes may

-have no effect on the price of Crocs shoe charms

-lead to a decrease in demand for Crocs shoe charms

-lead to an increase in quantity supplied for Crocs shoe charms

-None of the statements associated with this question are correct

-have no effect on the price of Crocs shoe charms

-lead to a decrease in demand for Crocs shoe charms

-lead to an increase in quantity supplied for Crocs shoe charms

-None of the statements associated with this question are correct

answer

lead to a decrease in demand for Crocs shoe charms

question

The demand function recognizes that the quantity of a good consumed depends on

-demand shifters

-only price and supply shifters

-demand shifters and price

-the prices of other goods only

-demand shifters

-only price and supply shifters

-demand shifters and price

-the prices of other goods only

answer

demand shifters and price

question

If the price of Domino falls while all other factors remain the same

-demand for Domino rises

-demand for Mama Bear's falls

-quantity demanded for Mama Bear's falls

-None of the statements associated with this question are correct

-demand for Domino rises

-demand for Mama Bear's falls

-quantity demanded for Mama Bear's falls

-None of the statements associated with this question are correct

answer

demand for Mama Bear's falls

question

Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + amM. From the law of demand we know that ax will be

-zero

-less than zero

-greater than zero

-It depends on the properties of good X

-zero

-less than zero

-greater than zero

-It depends on the properties of good X

answer

less than zero

question

Suppose the demand for good X is given by Qdx = 10 − 2Px + Py + M. The price of good X is $1, the price of good Y is $10, and income is $100. Given these prices and income, how much of good X will be purchased?

1,000

515

115

118

1,000

515

115

118

answer

118

question

Other things held constant, the greater the price of a good

-the lower the demand

-the higher the demand

-the lower the consumer surplus

-the greater the consumer surplus

-the lower the demand

-the higher the demand

-the lower the consumer surplus

-the greater the consumer surplus

answer

the lower the consumer surplus

question

The law of supply states that, holding all else constant, as the price of a good falls

-quantity supplied falls

-quantity supplied rises

-quantity demanded falls

-quantity demanded rises

-quantity supplied falls

-quantity supplied rises

-quantity demanded falls

-quantity demanded rises

answer

quantity supplied falls

question

For a steel factory, a decrease in the cost of electricity to the plant will cause the supply curve to

-become flatter

-shift to the left

-shift to the right

-become parallel to the price axis

-become flatter

-shift to the left

-shift to the right

-become parallel to the price axis

answer

shift to the right

question

If a shortage exists in a market, the natural tendency is for

-price to increase

-demand to increase

-quantity supplied to decrease

-no change to occur in the market

-price to increase

-demand to increase

-quantity supplied to decrease

-no change to occur in the market

answer

price to increase

question

Suppose market demand and supply are given by Qd = 100 − 2P and Qs = 5 + 3P. The equilibrium price is:

$15

$17

$19

$20

$15

$17

$19

$20

answer

$19

question

The maximum legal price that can be charged in a market is called

-a price floor

-a price ceiling

-an ad valorem tax

-the market equilibrium price

-a price floor

-a price ceiling

-an ad valorem tax

-the market equilibrium price

answer

a price ceiling

question

Suppose market demand and supply are given by Qd = 100 − 2P and Qs = 5 + 3P. If a price ceiling of $15 is imposed

-there will be a surplus of 20 units

-there will be a shortage of 20 units

-there will be a shortage of 40 units

-there will be neither a surplus nor a shortage

-there will be a surplus of 20 units

-there will be a shortage of 20 units

-there will be a shortage of 40 units

-there will be neither a surplus nor a shortage

answer

there will be a shortage of 20 units

question

The minimum legal price that can be charged in a market is called

-a price floor

-a price ceiling

-full economic price

-non-pecuniary price

-a price floor

-a price ceiling

-full economic price

-non-pecuniary price

answer

a price floor

question

Suppose market demand and supply are given by Qd = 100 − 2P and Qs = 5 + 3P. If a price floor of $30 is set, what will be size of the resulting surplus?

0

30

45

55

0

30

45

55

answer

55

question

Suppose market demand and supply are given by Qd = 100 − 2P and Qs = 5 + 3P. If the government sets a price floor of $30 and agrees to purchase all surplus at $30 per unit, the total cost to the government will be

$900

$1,125

$1,375

$1,650

$900

$1,125

$1,375

$1,650

answer

$1,650

question

Suppose that supply increases and demand decreases. What effect will this have on price and quantity?

-Price will decrease and quantity will increase

-Price will decrease and quantity will decrease

-Price will increase and quantity may rise or fall

-None of the statements associated with this question are correct

-Price will decrease and quantity will increase

-Price will decrease and quantity will decrease

-Price will increase and quantity may rise or fall

-None of the statements associated with this question are correct

answer

None of the statements associated with this question are correct

question

Suppose both supply and demand decrease. What effect will this have on price

-It will fall

-It will rise

-It may rise or fall

-It will remain the same

-It will fall

-It will rise

-It may rise or fall

-It will remain the same

answer

It may rise or fall

question

A price elasticity of zero corresponds to a demand curve that is

-horizontal

-downward sloping with a slope always equal to 1

-vertical

-either vertical or horizontal

-horizontal

-downward sloping with a slope always equal to 1

-vertical

-either vertical or horizontal

answer

vertical

question

As we move up along a linear demand curve, the price elasticity of demand

-becomes more elastic

-becomes more inelastic

-does not change

-changes based on the slope

-becomes more elastic

-becomes more inelastic

-does not change

-changes based on the slope

answer

becomes more elastic

question

Assume that the price elasticity of demand is −0.5 for a certain firm's product. If the firm raises price, the firm's managers can expect total revenue to:

-Decrease

-Increase

-remain constant

-either increase or remain constant, depending upon the size of the price increase

-Decrease

-Increase

-remain constant

-either increase or remain constant, depending upon the size of the price increase

answer

Increase

question

Lemonade, a good with many close substitutes, should have an own price elasticity that is

-unitary

-relatively elastic

-relatively inelastic

-perfectly inelastic

-unitary

-relatively elastic

-relatively inelastic

-perfectly inelastic

answer

relatively elastic

question

If apples have an own price elasticity of −1.4 we know the demand is: -unitary

-indeterminate

-elastic

-inelastic

-indeterminate

-elastic

-inelastic

answer

elastic

question

The own price elasticity of demand for apples is −1.4. If the price of apples falls by 5 percent, what will happen to the quantity of apples demanded?

-It will fall 3.57 percent

-It will fall 7 percent

-It will increase 3.57 percent

-It will increase 7 percent

-It will fall 3.57 percent

-It will fall 7 percent

-It will increase 3.57 percent

-It will increase 7 percent

answer

It will increase 7 percent

question

We would expect the own price elasticity of demand for food in general to be

-less elastic than the demand for cereal

-more elastic than the demand for cereal

-the same as that for cereal

-perfectly elastic

-less elastic than the demand for cereal

-more elastic than the demand for cereal

-the same as that for cereal

-perfectly elastic

answer

less elastic than the demand for cereal

question

The cross-price elasticity of demand for books and magazines is −2.0. If the price of magazines decreases by 20 percent, the quantity demanded of books will

-fall by 10 percent

-rise by 10 percent

-fall by 40 percent

-rise by 40 percent

-fall by 10 percent

-rise by 10 percent

-fall by 40 percent

-rise by 40 percent

answer

rise by 40 percent

question

If quantity demanded for sneakers falls by 15 percent when price increases 25 percent, we know that the absolute value of the own price elasticity of sneakers is

2.5

0.6

2.0

0.4

2.5

0.6

2.0

0.4

answer

0.6

question

The demand for good X has been estimated by Q xd = 12 − 4Px + 3Py. Suppose that good X sells at $2 per unit and good Y sells for $1 per unit. Calculate the own price elasticity.

−0.43

−0.57

−0.85

−1.14

−0.43

−0.57

−0.85

−1.14

answer

−1.14

question

Suppose Q xd = 10,000 − 2 Px + 3 Py − 4.5M, where Px = $100, Py = $50, and M = $2,000. What is the own price elasticity of demand? −2.34

−0.78

−0.21

−1.21

−0.78

−0.21

−1.21

answer

−0.21

question

Which of the following factors would NOT affect the own price elasticity of a good

-Time

-Price of an input

-Available substitutes

-Expenditure share

-Time

-Price of an input

-Available substitutes

-Expenditure share

answer

Price of an input

question

Demand is more inelastic in the short term because consumers:

-are impatient

-have no time to find available substitutes

-are present-oriented

-None of the preceding statements is correct

-are impatient

-have no time to find available substitutes

-are present-oriented

-None of the preceding statements is correct

answer

have no time to find available substitutes

question

If the cross-price elasticity between goods A and B is negative, we know the goods are

-inferior goods

-complements

-inelastic

-substitutes

-inferior goods

-complements

-inelastic

-substitutes

answer

complements

question

The elasticity that measures the responsiveness of consumer demand to changes in income is the

-income elasticity

-own price elasticity

-cross-price elasticity

-neither the income elasticity, the own price elasticity, nor the cross-price elasticity

-income elasticity

-own price elasticity

-cross-price elasticity

-neither the income elasticity, the own price elasticity, nor the cross-price elasticity

answer

income elasticity

question

An income elasticity less than zero tells us that the good is

-a normal good

-a Giffen good

-an inferior good

-an inelastic good

-a normal good

-a Giffen good

-an inferior good

-an inelastic good

answer

an inferior good

question

If the income elasticity for lobster is 0.3, a 30 percent increase in income will lead to a:

-10 percent drop in demand for lobster

-9 percent increase in demand for lobster

-20 percent increase in demand for lobster

-4 percent increase in demand for lobster

-10 percent drop in demand for lobster

-9 percent increase in demand for lobster

-20 percent increase in demand for lobster

-4 percent increase in demand for lobster

answer

9 percent increase in demand for lobster

question

Suppose demand is given by Q xd = 50 − 4Px + 6Py + Ax, where Px = $4, Py = $2, and Ax = $50. What is the advertising elasticity of demand for good x?

1.12

0.38

1.92

0.52

1.12

0.38

1.92

0.52

answer

0.52

question

Which of the following is used to determine the statistical significance of a regression coefficient?

-t-statistic

-F-statistic

-R-square

-Adjusted R-square

-t-statistic

-F-statistic

-R-square

-Adjusted R-square

answer

t-statistic

question

Which of the following can be used to quantify the overall statistical significance of a regression?

-t-statistic

-F-statistic

-R-square

-The F-statistic and R-square

-t-statistic

-F-statistic

-R-square

-The F-statistic and R-square

answer

F-statistic