question
Which of the following would likely have the lowest price elasticity of demand?
answer
Insulin
question
If the demand line is a horizontal line, this means that demand is________?
answer
perfectly elastic
question
If the Nashville Symphony raises ticket prices and fines that total revenue falls, this is evidence that _________?
answer
demand for the symphony tickets is price elastic
question
As income increased 5%, the demand for food tends to increase by 2% indicating that?
answer
food is a normal good and income elastic
question
A decrease in demand, ceteris peribus, causes the equilibrim.
answer
price to decrease and quantity to decrease.
question
If demand and supply BOTH decreased, what can we conclude?
answer
the equilibrium quantity will definitely fall but the change in the equilibrium price is uncertain.
question
To be consistent with the law of supply , the supply curve should be depicted as?
answer
upward sloping to the right
question
Which of the following is the best example of price floor?
answer
minimum wage laws
question
Which of the following is the best example of excise tax?
answer
the tax per gallon of gasoline
question
A shortage occurs when
answer
the price is below equilibrium
question
If the price of elasticity of demand is 1, 5 then 3 percent decrease in price will lead to
answer
4.5 percent increase in quantity demanded
question
If the price of gasoline falls and the quantity of gasoline sold decreases, economists would conclude that
answer
demand decrease
question
Which of the following statement concerning the burden of an excise is TRUE?
answer
the greater burden of an excise tax will fall on consumer when demand in price inelastic.
question
When economists talk about supply they are referring to
answer
the amounts of product that firms are willing and able to sell.
question
Which of the following is the best example of substitute products?
answer
Campbell and Progresso chicken noodle soup
question
If two products are strong substitutes in demand, we would expect the cross-price elasticity of demand between the two products to be?
answer
positive and large
question
The income elasticity of demand is defined as
answer
the percentage change in quaninity demanded dived by the percentage change in income.
question
If the goverment imposes an excise tax on mobile homes of 500 per home, economists would normally expect
answer
the price that consumers pay for mobile homes to increase by less than 500
question
For in inferior good the income elasticity will be
answer
less than 0
question
An economist that argues that the US should raise the excise tax on gasoline is practicing?
answer
normative economics
question
If income increases what will happen in the market for an inferior good?
answer
the demand curve will shift to the left
question
Which of the following would generally cause the demand curve for athletic shoes to shift to the left?
answer
a decrease in the popularity of athletic shoes
question
If the quantity of demand equals the quantity supplied at the current price , which of the following statements are TRUE?
answer
the market is in equilibrium
question
Over the price range $10 to $50, what is the price elasticity of demand?
answer
A) 40
question
If the price increases from $10 to $30, what happens to total revenue?
answer
B) it increases from 3000 to $6000
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