question
Which of the following is NOT an assumption along a given PPC
answer
Capital is used 24/7
question
If the price of a good increases, which of the following will occur
answer
Quantity demanded for that good will decrease (shift along the demand curve)
question
If the price of bicycles increase, in the market for bicycle helmets, what would we expect to occur?
answer
Demand to decrease (shift to the left)
question
If a country can make at most 400 Bicycles or 500 Cars, assuming constant opportunity costs, what is the cost of making 1 bicycle in terms of cars?
answer
5/4
question
Which of the following would be expected to have the most elastic demand?
-Chicken Wings at Buffa Louie's (a restaurant on campus)
-Chicken Wings
-Chicken
-Food
answer
Chicken Wings at Buffa Louie's (a restaurant on campus)
question
If the ticket price for a concert goes from $25 to $30 and the quantity of seats demanded goes from 20,000 to 10,000 using the percent change formula, what is the elasticity of demand? (remember to use absolute value)
answer
2.5
question
If the ticket price for a concert goes from $25 to $30 and the quantity of seats demanded goes from 20,000 to 10,000 using the midpoint formula, what is the elasticity of demand? (remember to use absolute value and round to the nearest tenth)
answer
3.7
question
Assume cross price elasticity is 3/4 and currently 100 units of good A are demanded, if the price of good B increases 20%, what will be the new quantity demanded for Good A? (Use the percentage change formula)
answer
115.0
question
If the cross price elasticity between good A and good B is 3/4, what can we say for certain about goods A and B?
answer
They are substitutes
question
When a PPF is bowed out this means
answer
Opportunity costs are increasing
question
If the price of burritos increases from $4 to $6, and customers decrease their consumption from 20 to 10 burritos, what is the price elasticity of demand, using the midpoint method?
answer
5/3
question
The demand for table salt tends to be relatively price-inelastic because:
answer
Salt represents a very small portion of a persons income and spending.
question
If the income elasticity of demand for a good is _______, the good is said to be a _________.
answer
negative; inferior good
question
If a pizza is a normal good and the price of pizzas increases, then which of the following would occur?
answer
Quantity supplied would increase
question
What is the formula for the elasticity of supply?
answer
Percent change in quantity supplied divided by percent change in price
question
If the prices of inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts are decreasing, then we would expect
answer
Supply would increase
question
If Demand and Supply both decrease, we know for certain that:
answer
Equilibrium Quantity will decrease
question
Assume Cars and Gasoline are complements. If the price of Gasoline decreases, in the market for Cars we expect:
answer
Equilibrium Price to increase and Equilibrium Quantity to increase
question
Assume an economy has a GDP of $250 and grows 7% a year. Using the compound growth formula, after 15 years what will GDP be (rounded to the nearest dollar)?
answer
$690
question
If demand is inelastic and a business raised their prices, this would cause
answer
Quantity demanded to change by a smaller percent than Price
question
If Demand is: Qd=-2P+10 And Supply is: Qs=P+1 What is equilibrium quantity?
answer
4
question
If a country is producing along its PPC curve we know for certain
answer
It is achieving productive efficiency
question
Ceteris paribus if supply decreases
answer
Equilibrium Quantity will decrease and Equilibrium Price will increase
question
If the elasticity of supply is .35 this implies that for a 20% increase in price
answer
Quantity supplied will increase 7%
question
Good Models should be:
answer
Tractable and Predictive
question
According to the rule of 70 with a growth rate of 2% approximately how long will it take for an economy to double in size
answer
35 years
question
If producers expected that there was a “fad” (an intense and widely shared enthusiasm for something, especially one that is short-lived and without basis in the object's qualities; a craze) coming for kangaroo meat, and consumers simultaneously found out Kangaroo meat was very lean and healthy, the shifts in supply and demand would most likely cause
answer
Equilibrium quantity to increase
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