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Ch. 4 & 5 Test Review Flashcards | StudBud
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Ch. 4 & 5 Test Review
Ch. 4 & 5 Test Review
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A review of demand and supply.
Flashcards
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Practice quiz
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Questions
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Answers
1
Which of the following would cause a change in quantity supplied for textbooks?
Printers break down
Gov't subsidizes textbook companies that have e-textbooks
Price of textbooks increase
Authors ask for more money
2
What would happen to the demand curve for Samsung cell phones in the following case:
Shift the demand curve to the left
Movement down the demand curve
Movement up the demand curve
Shift the demand curve to the right
3
Which of the following would cause an increase in supply of electric cars?
New Stoudt electric car company starts
Price of health insurance increases
Poor leadership with confusing hierarchy
Companies are required to have a battery that lasts 36 hrs
4
Use the following information to determine what happens to quantity demand:
Quantity demand will increase by 10%
Quantity demand will increase by 40%
Quantity demand will increase by 20%
Quantity demand will decrease by 50%
5
What factor is used in this example?
Income
Substitutes
Complements
Change in quantity demand
6
Which of the following is NOT a question to determine the elasticity of demand of items?
Is the item a luxury or a necessity?
Does it use a large portion of your income?
How quickly can producers react to a change in price?
Are there adequate substitutes available?
7
How many workers should be hired in the following example?
2 workers
3 workers
4 workers
5 workers
8
Determine the type of demand elasticity from the following information:
Inelastic
Unit Elastic
Elastic
9
Which of the following would cause an increase in demand for airline tickets to Tahiti?
Hotels in Tahiti offer a BOGO night free
High unemployment rate
Flights to Las Vegas cost $99 round trip
High schools get rid of spring break
10
What does the law of supply state?
Quantity demand & quantity supply are indirectly related
Quantity demand & quantity supply are directly related
Price & quantity supply are directly related
Price & quantity supply are indirectly related
11
If the price of the product is $20, how much it the total revenue at workers 3 & 4?
W3: $760, W4: $800
W3: $160, W4: $40
W3: $2800, W4: $3600
W3: $2400, W4: $3200
12
How is revenue different from profit?
R is for break-even and P is for how many workers to hire
R is money made after cost and P is money made before cost
R is money made before cost and P is money made after cost
R is used for how many workers to hire and P is break-even
13
What's the importance of the profit maximizing point?
It determines the price of the product
It tells you where TR=TC
It determines how many workers to hire
It tells you when increasing returns starts
14
What factor is used in the following example?
Government Action
Cost of inputs
Expectations
Labor productivity
15
Why is marginal cost important?
It tells how much items should cost
It tells the cost of to produce 1 more item
It tells how many more items are produced from 1 more person
It tells the profit of a company
16
What factor is used in this example?
Income
Complements
Market Size
Expectations
17
What factor is being used in the following example?
Substitutes
Expectations
Income
Change in quantity demand
18
How much is the marginal cost at workers 1-4?
W1: $8, W2: $4, W3: $10, W4: $40
W1: $8, W2: $2.67, W3: $2.11, W4: $2
W1: $4, W2: $2, W3: $5, W4: $20
W1: $4, W2: $1.33, W3: $1.05, W4: $1
19
Which of the following items has the most elastic demand?
Foreign travel
Prescription drugs (for older people)
Tobacco products (for smokers)
Physician’s service
20
How can you see the law of demand in the demand curve?
Curve is downward since people get tired of products
Curve is downward since P & QD are indirectly related
Curve is downward since P & QD are directly related
Curve is downward since P & QS are directly related
21
Fill in the blanks below:
a. 15 b. 55 c. 22 d. 46 e. -4
a. 15 b. 55 c. 58 d. 122 e. 124
a. 15 b. 40 c. 25 d. 10 e. -6
a. 15 b. 25 c. 58 d. 6 e. -4
22
When the price of an item increases a lot and consumers don’t react a lot what is this called?
Unit Elastic Demand
Elastic demand
Inelastic Demand
Change in Quantity Demand
23
What would cause a decrease in the supply of fast food?
Grills that cook food better and faster
Workers at fast food places no longer get a discount on food
3 new types of fast food chains open up in the area
Price of beef to make hamburgers decreases
24
Which of the following is an example that illustrates the law of diminishing marginal utility?
Getting consecutive plates of food at a buffet restaurant
Diabetics always needing insulin
Buying more shirts when the store is having a sale
Never getting tired of your favorite movie
25
The following is an example of what?
Substitution
Income effect
Substitution effect
Change in demand
26
Which range of workers demonstrates diminishing returns?
Worker 5
Workers 2-4
Workers 3-4
Workers 0-2
27
How can you see negative returns in real life?
Workers are sent home when there isn't enough work
You can always buy more resources
Cost of electricity doesn't change within a few days
The price of an item is found by what makes the most profit
28
Why does negative returns happen?
Too many resources are being changed
Resources are starting to be used
Resources are being maxed out
Resources ran out and workers are distracting others
29
How does the law of diminishing marginal utility impact the demand curve?
Curve slopes down since people need price to ↓ to buy more
Curve will slope upward since people are tired of item
Curve will shift left since people have cheaper substitutes
Curve will shift right since people will want more of item
30
Determine the type of demand elasticity from the following information:
Inelastic
Elastic
Unit Elastic
31
What happens to the demand curve for Nutella if the price of Nutella increases?
Move down the demand curve
The curve shifts to the left
Move up the demand curve
The curve shifts to the right
32
What would happen to the supply curve for gas if the price of oil will increase next week?
Shift the supply curve to the right
Shift the supply curve to the left
Movement up the supply curve
Movement down the supply curve
33
Which of the following would be an example of a variable cost for a real estate company?
Cost of the Internet
Rent for their office space
Salaries for workers
Cost of electricity
34
Why can labor only be changed in the short run?
This only happens for items that are inelastic
Other resources cost too much
Takes too long to change other resources
Would go against the law of supply otherwise
35
What factor is used in the following example?
Expectations
Technology
Change in quantity supply
Labor productivity
36
Which of the following would cause a decrease in supply for Beats headphones?
Employees get stock in the company
Price of plastic decreases
Price of Beats decreases
Excise taxes increase
37
How much is the rent and the wages in the following example?
Rent: $80, Wages: $40
Rent: $60, Wages: $80
Rent: $40, Wages: $40
Rent: $20, Wages: $40
38
Determine the type of demand elasticity from the following information:
Unit Elastic
Elastic
Inelastic
39
All of the following will increase the demand for denture cream EXCEPT:
Dentures have an increased chance of oral cancer
Baby boom generation didn't take good care of their teeth
Price of dentures decreases
Social security payments increase
40
What factor is used in the following example?
Technology
Change in Quantity Supply
Labor productivity
Cost of inputs
41
Which product is likely to have the most elastic supply curve?
Houses
iPads
Aircraft carrier
Roads
42
Which of the following would cause an increase in demand for apartments?
There will be a sale on apartments next month
If you sign a 1 year lease you get half off a U-haul truck
IUPUI has a small incoming freshman class
Interest rates on house loans decrease
43
Which of the following will cause an increase in quantity demand for iPads?
Price of iPads increases
Price of iPads decreases
Microsoft surface price increases
iPads will be on sale next week
44
According to the income effect why do people not like when the price of Verizon contracts ↑?
The price of AT&T has dropped so Verizon seems higher
People don't care since Verizon contracts is inferior good
It makes people feel poorer
People's income has decreased
45
How do you find the break even point?
Where TP=TC
Between where a loss becomes a profit
Where MR=MC
In Stage 2 of production
46
What happens to the demand curve Comcast's high speed internet in the following situation?
Movement up the demand curve
Shift the demand curve to the right
Movement down the demand curve
Shift the demand curve to the left
47
Which of the following would cause a decrease in demand for Steak N Shake milkshake?
Price of steak burgers decreases
Price of Steak N Shake milkshake increases
Price of Dairy Queen milkshakes increase
Sale on Steak N Shake milkshake tomorrow
48
Determine the type of demand elasticity from the following information:
Unit Elastic
Inelastic
Elastic
49
Use the following situation to answer the question
Substitutes
Income- inferior goods
Complements
Expectations
