question
the 4 determinants of demand that are held constant when we consider a movement along a demand curve include all of the following except
a. availability and price of substitue goods
b. income
c. price
d. taste
a. availability and price of substitue goods
b. income
c. price
d. taste
answer
c. price
question
An indifference map shows
a. a set of indifference curves and a set of budget constraints.
b. a set of budget constraints and one indifference curve
c. a set of indifference curves
d. one indifference curve
a. a set of indifference curves and a set of budget constraints.
b. a set of budget constraints and one indifference curve
c. a set of indifference curves
d. one indifference curve
answer
c. a set of indifference curves
question
Graphically, as a consumer buys more of a good, the marginal utility line will
a. increase as more goods are consumed
b. continuously decline if diminishing returns are present
c. increase steadily and then decline
d. follow the same shape as the total utility line
a. increase as more goods are consumed
b. continuously decline if diminishing returns are present
c. increase steadily and then decline
d. follow the same shape as the total utility line
answer
b. continuously decline if diminishing returns are present
question
Economic explanations of consumer behavior take into consideration
a. prices and income
b. lack of self-confidence
c. social status
d. ego gratification
a. prices and income
b. lack of self-confidence
c. social status
d. ego gratification
answer
a. prices and income
question
Any point on the budget constraint
a. represents combinations of two goods that yield the same utility
b. reflects the price of one good divided by the price of another good
c. gives the consumer the highest level of utility
d. represent a combination of two goods that are affordable
a. represents combinations of two goods that yield the same utility
b. reflects the price of one good divided by the price of another good
c. gives the consumer the highest level of utility
d. represent a combination of two goods that are affordable
answer
d. represents a combination of two goods that are affordable
question
When choosing among products, consumers look at:
a. the marginal utility per dollar and their budget constraint.
b. the marginal utility of the good
c. the total utility that will be gained at the end of all consumption
d. only their budget
a. the marginal utility per dollar and their budget constraint.
b. the marginal utility of the good
c. the total utility that will be gained at the end of all consumption
d. only their budget
answer
a. the marginal utility per dollar and their budget constraint.
question
The law of diminishing marginal utility suggest that
a. as marginal utility decreases, the willingness to pay increases
b. people are willing to buy additional quantities of a good only if its price falls
c. price and quantity demanded are directly related
d. people will substitute lower-priced goods for more expensive goods, ceteris paribus
a. as marginal utility decreases, the willingness to pay increases
b. people are willing to buy additional quantities of a good only if its price falls
c. price and quantity demanded are directly related
d. people will substitute lower-priced goods for more expensive goods, ceteris paribus
answer
b. people are willing to buy additional quantities of a good only if its price falls
question
The slope of the budget constraint, when a consumer has reached optimal consumption of two goods, is equal to the
a. cross-price elasticity of the two goods
b. total utility for the two goods
c. marginal rate of indifference
d. marginal rate of substitution
a. cross-price elasticity of the two goods
b. total utility for the two goods
c. marginal rate of indifference
d. marginal rate of substitution
answer
d. marginal rate of substitution
question
Assume that Anna buys peanut butter and bread. If the price of peanut butter falls then
a. her indifference curves will shift away from the origin
b. one end of her budget constraint will move away from the origin
c. her entire budget constraint will shift away from the origin
d. her entire budget constraint will shift toward the origin
a. her indifference curves will shift away from the origin
b. one end of her budget constraint will move away from the origin
c. her entire budget constraint will shift away from the origin
d. her entire budget constraint will shift toward the origin
answer
b. one end of her budget constraint will move away from the origin
question
If Josh's income increases the
a. one end of his budget constraint will move away from the origin
b. his entire budget constraint will shift toward the origin
c. his entire budget constrain will shift away from the origin
d. his indifference curves will shift away from the origin
a. one end of his budget constraint will move away from the origin
b. his entire budget constraint will shift toward the origin
c. his entire budget constrain will shift away from the origin
d. his indifference curves will shift away from the origin
answer
c. his entire budget constrain will shift away from the origin
question
The total consumer surplus is shown on a graph as
a. the area above the demand curve and above the actual price
b. the area under the demand curve and below the actual price
c. the area under the demand curve and above the actual price
d. the area above the demand curve and below the actual price
a. the area above the demand curve and above the actual price
b. the area under the demand curve and below the actual price
c. the area under the demand curve and above the actual price
d. the area above the demand curve and below the actual price
answer
c. the area under the demand curve and above the actual price
question
If the price elasticity of demand is 0.6, then a 10% increase in the price of the good will lead to a _____ in the quantity demanded
a. 6% increase
b. 0.6% increase
c. 6% decrease
d. 0.6% decrease
a. 6% increase
b. 0.6% increase
c. 6% decrease
d. 0.6% decrease
answer
c. 6% decrease
question
Sam owns a taco restaurant, and he conducted a consumer survey that indicates that the price elasticity of demand for his restaurant is 3.5. You would advise Sam to:
a. lower his price to increase revenue
b. keep his price the same to maximize revenue
c. raise his price to increase revenues
d. offer more high-priced products
a. lower his price to increase revenue
b. keep his price the same to maximize revenue
c. raise his price to increase revenues
d. offer more high-priced products
answer
a. lower his price to increase revenue
question
Suppose computer prices at an office supply store fall from $1,000 to $900 and as a result the quantity demanded of typewriters decreases from 40 to 20 per month. The cross-price elasticity of demand is closest to
a. 5.0
b. 0.2
c. 0.16
d. 6.3
a. 5.0
b. 0.2
c. 0.16
d. 6.3
answer
d. 6.3
question
Ceteris paribus, as the number of substitutes for a good increase, the
a. price elasticity of demand should become larger
b. income elasticity of demand should become negative
c. price elasticity of demand should become smaller
d. cross-price elasticity of demand should become negative
a. price elasticity of demand should become larger
b. income elasticity of demand should become negative
c. price elasticity of demand should become smaller
d. cross-price elasticity of demand should become negative
answer
a. price elasticity of demand should become larger
question
Elasticity of supply looks at
a. how responsive producers are to change in quantity demanded
b. the responsiveness of sellers to a change in consumer's incomes
c. how responsive sellers are to a change in price
d. how much quantity demanded changes with a change in price
a. how responsive producers are to change in quantity demanded
b. the responsiveness of sellers to a change in consumer's incomes
c. how responsive sellers are to a change in price
d. how much quantity demanded changes with a change in price
answer
c. how responsive sellers are to a change in price
question
Suppose the quantity demanded of ski boats falls from 4.0 million to 3.0 million as a result of an average price increase from $20,000 to $25,000 per boat. The absolute value of the price elasticity of demand is closest to
a. 0.20
b. 1.29
c. 0.78
d. 0.29
a. 0.20
b. 1.29
c. 0.78
d. 0.29
answer
b. 1.29
question
Assume a good has a downward-sloping, linear demand curve. Starting at a price of zero, as the price of the good increases, total revenue
a. decreases indefinitely because the quantity sold will decrease
b. increases indefinitely
c. increases indefinitely, then decreases
d. is constant
a. decreases indefinitely because the quantity sold will decrease
b. increases indefinitely
c. increases indefinitely, then decreases
d. is constant
answer
c. increases indefinitely, then decreases
question
if a good is normal, its
a. income elasticity of demand is positive
b. price elasticity of demand is positive
c. cross-price elasticity is positive
d. income elasticity of demand is negative
a. income elasticity of demand is positive
b. price elasticity of demand is positive
c. cross-price elasticity is positive
d. income elasticity of demand is negative
answer
a. income elasticity of demand is positive
question
Price elasticity looks at
a. how much the quantity demanded or supplied changes after a change in price
b. the law of demand and the law of supply
c. why the law of supply and the law of demand are untrue
d. the degree to which price changes with a change in the quantity demanded or supplied
a. how much the quantity demanded or supplied changes after a change in price
b. the law of demand and the law of supply
c. why the law of supply and the law of demand are untrue
d. the degree to which price changes with a change in the quantity demanded or supplied
answer
a. how much the quantity demanded or supplied changes after a change in price
question
Which of the following is likely to have the most inelastic price elasticity of demand?
a. pickup trucks
b. the hondas one honda dealer sells
c. automobiles
d. hondas
a. pickup trucks
b. the hondas one honda dealer sells
c. automobiles
d. hondas
answer
c. automobiles
question
If the marginal physical product (MPP) is falling, then the
a. total cost of each unit of output is falling
b. total cost of each unit of output is rising
c. marginal cost of each unit of output is falling
d. marginal cost of each unit of output is rising
a. total cost of each unit of output is falling
b. total cost of each unit of output is rising
c. marginal cost of each unit of output is falling
d. marginal cost of each unit of output is rising
answer
d. marginal cost of each unit of output is rising
question
If a fifth unit of labor was added to Table 21.1, its MPP would most
likely be
a. 0
b. 7
c. less than 7
d. greater than 7
likely be
a. 0
b. 7
c. less than 7
d. greater than 7
answer
c. less than 7
question
in the long run, which of the following is likely to be a variable cost?
a. rent, wages, and all other costs are variable in the long run
b. factory rental but not wage costs
c. wage costs but not costs for equipment
d. interest payments on borrowed funds but not utilities
a. rent, wages, and all other costs are variable in the long run
b. factory rental but not wage costs
c. wage costs but not costs for equipment
d. interest payments on borrowed funds but not utilities
answer
a. rent, wages, and all other costs are variable in the long run
question
Average total cost is important to business because
a. it tells the firm what the profit per unit produced is
b. it is an indicator of the production function
c. it always declines as more output is produced
d. it tells the firmn what its fixed costs are
a. it tells the firm what the profit per unit produced is
b. it is an indicator of the production function
c. it always declines as more output is produced
d. it tells the firmn what its fixed costs are
answer
a. it tells the firm what the profit per unit produced is
question
which of the following would cause a firm's production function to shift upward?
a. increased training for the firm's workers
b. hiring more workers
c. an increase in production by the firm
d. an increase in factor costs
a. increased training for the firm's workers
b. hiring more workers
c. an increase in production by the firm
d. an increase in factor costs
answer
a. increased training for the firm's workers
question
The total variable cost of 2 units of output in Table 21.5 is:
a. $15
b. $27
c. $12
d. $8
a. $15
b. $27
c. $12
d. $8
answer
c. $12
question
If a firm can change market prices by altering its output, then it
a. faces a horizontal demand curve
b. is a competitive firm
c. is a price taker
d. has market power
a. faces a horizontal demand curve
b. is a competitive firm
c. is a price taker
d. has market power
answer
d. has market power
question
A perfectly competitive firm is a price taker because
a. its products are differentiated
b. it has market power
c. market supply is upward-sloping
d. the price of the product is determined by many buyers and sellers
a. its products are differentiated
b. it has market power
c. market supply is upward-sloping
d. the price of the product is determined by many buyers and sellers
answer
d. the price of the product is determined by many buyers and sellers
question
Lashondra is the owner/operator of an interior design firm. Last year she earned $400,000 in total
revenue. Her explicit costs were $200,000 (assume that this amount represents the total opportunity
cost of these resources). During the year she received offers to work for other design firms. One
offer would have paid her $120,000 per year and the other would have paid her $130,000 per year.
Lashondra's economic profit is equal to
A. -$50,000.
B. $70,000.
C. $0.
D. $200,000.
revenue. Her explicit costs were $200,000 (assume that this amount represents the total opportunity
cost of these resources). During the year she received offers to work for other design firms. One
offer would have paid her $120,000 per year and the other would have paid her $130,000 per year.
Lashondra's economic profit is equal to
A. -$50,000.
B. $70,000.
C. $0.
D. $200,000.
answer
B. $70,000.
question
in making an investment decision, an entrepreneur
a. treats all costs as variable
b. must take account of diminishing returns to fixed factors
c. decides the level of output to produce
d. makes a shutdown decision if price is below average variable costs
a. treats all costs as variable
b. must take account of diminishing returns to fixed factors
c. decides the level of output to produce
d. makes a shutdown decision if price is below average variable costs
answer
a. treats all costs as variable
question
a perfectly competitive firm should expand output when
a. P>ATC
b. P<ATC
c. P<MC
d. P>MC
a. P>ATC
b. P<ATC
c. P<MC
d. P>MC
answer
d. P>MC
question
The demand curve confronting a competitive firm is
a. horizontal, while market demand is downward sloping
b. horizontal, as is market demand
c. downward-sloping while market demand is flat
d. downward-sloping, as is market demand
a. horizontal, while market demand is downward sloping
b. horizontal, as is market demand
c. downward-sloping while market demand is flat
d. downward-sloping, as is market demand
answer
a. horizontal, while market demand is downward sloping
question
When the short-run marginal cost curve is upward-sloping
a. there are diseconomies of scale
b. diminishing returns occurs with greater output
c. the average total cost curve is above the marginal cost curve
d. the average total cost curve is upward-sloping
a. there are diseconomies of scale
b. diminishing returns occurs with greater output
c. the average total cost curve is above the marginal cost curve
d. the average total cost curve is upward-sloping
answer
b. diminishing returns occurs with greater output
question
refer to figure 22.3 for a perfectly competitive firm. Which of the following statements is true for the firm between...
a. the firm is experiencing economic profits because the market price is greater than or equal to ...
b. the firm is experiencing economic losses but should continue to produce
c. The firm is experiencing zero economic profit
d. the firm is experiencing economic losses and should shut down.
a. the firm is experiencing economic profits because the market price is greater than or equal to ...
b. the firm is experiencing economic losses but should continue to produce
c. The firm is experiencing zero economic profit
d. the firm is experiencing economic losses and should shut down.
answer
b. the firm is experiencing economic losses but should continue to produce
question
What price exceeds average variable cost but not average total cost, the firm should, in the short run
a. produce at the rate of output where MR = MC
b. shut down
c. minimize per-unit losses by producing at the rate of ourpuit where ATC is minimized in the short run
d. minimize total losses by producing at the rate of output where ATC is minimized,
a. produce at the rate of output where MR = MC
b. shut down
c. minimize per-unit losses by producing at the rate of ourpuit where ATC is minimized in the short run
d. minimize total losses by producing at the rate of output where ATC is minimized,
answer
a. produce at the rate of output where MR = MC
question
If diminishing returns exist then
a. the total cost curve will be negatively sloped
b. each unit produced will cost incrementally more to produce
c. the total cost curve will be flat
d. each unit produced will cost incrementally less to produce
a. the total cost curve will be negatively sloped
b. each unit produced will cost incrementally more to produce
c. the total cost curve will be flat
d. each unit produced will cost incrementally less to produce
answer
b. each unit produced will cost incrementally more to produce
question
Megan used to work at the local pizzeria for $15,000 per year but quit in order to start her own deli. To buy the necessary equipment, she withdrew $20,000 from her inheritance (which paid 8 percent interest). Last year she paid $25,000 for ingredients and $500 per month rent but had revenue of $50,000. She asked her dad the accountant and her mom the economist to calculate her costs for her.
a. dad says her profit is $31000 and Mom says her profit is $16,000
b. Dad says she lost $11,000 and Mom says she lost $26,000
c. Dad says her profit is $9,000 and Mom says she lost $6,000
d. Dad says her profit is $19,000 and Mom says her profit is $2,400
a. dad says her profit is $31000 and Mom says her profit is $16,000
b. Dad says she lost $11,000 and Mom says she lost $26,000
c. Dad says her profit is $9,000 and Mom says she lost $6,000
d. Dad says her profit is $19,000 and Mom says her profit is $2,400
answer
d. Dad says her profit is $19,000 and Mom says her profit is $2,400
question
a change in which of the following will change the optimal rate of output
a. profit taxes
b. inflation taxes
c. property taxes
d. payroll taxes
a. profit taxes
b. inflation taxes
c. property taxes
d. payroll taxes
answer
d. payroll taxes
question
When a computer firm is producing a level of output at which MC is greater than price, from society's standpoint the firm is producing too
a. Little because society would be willing to give up more alternative goods in order to get additional computers
b. much be cause society would be willing to give up more alternative goods in order to get additional computers
c. Little because society is giving up more to produce additional computers than the computers are worth
d. much because society is giving up more to produce additional computers than the computers are worth
a. Little because society would be willing to give up more alternative goods in order to get additional computers
b. much be cause society would be willing to give up more alternative goods in order to get additional computers
c. Little because society is giving up more to produce additional computers than the computers are worth
d. much because society is giving up more to produce additional computers than the computers are worth
answer
d. much because society is giving up more to produce additional computers than the computers are worth
question
for a competitive market in the long run
a. accounting profit is zero
b. economic losses induce firms to shut down
c. economic profit is positive
d. economic profits induce firms to enter until profits are normal
a. accounting profit is zero
b. economic losses induce firms to shut down
c. economic profit is positive
d. economic profits induce firms to enter until profits are normal
answer
d. economic profits induce firms to enter until profits are normal
question
Which of the following is consistent with long-run equilibrium for a perfectly competitive market?
a. average total costs of production are maximized
b. average variable costs of production are maximized
c. maximum technical efficiency is achieved
d. economic profits are positive
a. average total costs of production are maximized
b. average variable costs of production are maximized
c. maximum technical efficiency is achieved
d. economic profits are positive
answer
c. maximum technical efficiency is achieved
question
other things being equal, as more firms enter a market, the market supply curve
a. shifts to the left
b. becomes inelastic
c. shifts to the right
d. intersects the demand curve at the higher price
a. shifts to the left
b. becomes inelastic
c. shifts to the right
d. intersects the demand curve at the higher price
answer
c. shifts to the right
question
a shift in supply is defined as a change in
a. equilibrium quantity
b. the supply curve because of a change in a determinant of supply
c. quantity supplied because of a change in price
d. price
a. equilibrium quantity
b. the supply curve because of a change in a determinant of supply
c. quantity supplied because of a change in price
d. price
answer
b. the supply curve because of a change in a determinant of supply
question
Jessie's demand schedule for candy bars indicates
a. how much she likes candy bars
b. how many candy bars she will actually buy
c. why she likes candy bars
d. her opportunity cost of buying candy bars
a. how much she likes candy bars
b. how many candy bars she will actually buy
c. why she likes candy bars
d. her opportunity cost of buying candy bars
answer
d. her opportunity cost of buying candy bars
question
In the news article titled "gas prices jump in Mathews wake" suggest gasoline prices increased as a result of damage caused by hurricane mathew. When the availability of gasoline decreases as a result of this damage the supply curve shifts to the left causing
a. the price of gasoline to move up along the market demand curve
b. the price of gasoline to move up along the market supply curve
c. a surplus to exist at the original equilibrium price
d. consumers pay lower prices as they decide to drive less
a. the price of gasoline to move up along the market demand curve
b. the price of gasoline to move up along the market supply curve
c. a surplus to exist at the original equilibrium price
d. consumers pay lower prices as they decide to drive less
answer
a. the price of gasoline to move up along the market demand curve
question
The price ceiling that the federal government placed on human organs caused
a. a shortage
b an increase in supply
c. an increase in demand
d. a surplus
a. a shortage
b an increase in supply
c. an increase in demand
d. a surplus
answer
a. a shortage
question
a leftward shift of a market demand curve for HDTV's, ceteris paribus, causes equilibrium price to
a. decrease and quantity to increase
b. increase and quantity to decrease
c. increase and quantity to increase
d. decrease and quantity to decrease
a. decrease and quantity to increase
b. increase and quantity to decrease
c. increase and quantity to increase
d. decrease and quantity to decrease
answer
d. decrease and quantity to decrease
question
when the market mechanism is allowed to operate freely, prices will determine
a. the mix of output to be produced, the resources to be used in the production process and for whom
b. only the mix of output to be produced and the resources to be used in the production process
c. only the resources to be used in the production process and for whom the output is produced
d. only for whom the output is produced and the mix of output to be produced
a. the mix of output to be produced, the resources to be used in the production process and for whom
b. only the mix of output to be produced and the resources to be used in the production process
c. only the resources to be used in the production process and for whom the output is produced
d. only for whom the output is produced and the mix of output to be produced
answer
a. the mix of output to be produced, the resources to be used in the production process and for whom
question
If public goods were marketed like private goods, then
a. there would be market failure
b. public goods would be overproduced
c. the optimal mix of output would occur at the market equilibrium
d. the economy would be outside the production possibilities curve.
a. there would be market failure
b. public goods would be overproduced
c. the optimal mix of output would occur at the market equilibrium
d. the economy would be outside the production possibilities curve.
answer
a. there would be market failure
question
When there is a decrease in the unemployment rate
a. the economy moves closer to the production possibilities curve
b. the production possibilities curve shifts inward
c. there is a movement along the production possibilities curve
d. the production possibilities curve shifts outward
a. the economy moves closer to the production possibilities curve
b. the production possibilities curve shifts inward
c. there is a movement along the production possibilities curve
d. the production possibilities curve shifts outward
answer
a. the economy moves closer to the production possibilities curve
question
From 1990 to 2010, the public sector share of total output
a. trended upward to 2000 and then downward to 2010
b. trended downward to 2010
c. trended downward to 2000 and then upward to 2010
d. trended upward through 2010
a. trended upward to 2000 and then downward to 2010
b. trended downward to 2010
c. trended downward to 2000 and then upward to 2010
d. trended upward through 2010
answer
c. trended downward to 2000 and then upward to 2010
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
