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UNIT2-Econ
UNIT2-Econ
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Questions
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Answers
1
Which of the following is a good that might not be bought when prices rise?
luxury
complement
inferior good
substitute
2
What determines how a change in prices will affect total revenue for a company?
the company’s pricing policy
elasticity of demand
values of elasticity
the consumers’ incomes
3
What do sellers do if they expect the price of goods for sale to increase in the near future?
store the goods indefinitely regardless of when the price rises
sell the goods now but try to get the higher price for them
store the goods until the price rises
sell the goods now and try to invest the money instead of resupplying
4
When the selling price of a good goes up, what is the relationship to the quantity supplied?
There is no relationship between the two
It becomes practical to produce more goods
The profit made on each item goes down
The cost of production goes down
5
Baker spends $16 baking 10 cakes. $24 will allow her to bake 12 cakes, while $36 = 14 cakes. the baker has
negative marginal returns
increasing marginal returns
decreasing marginal returns
costant marginal returns
6
Will has inelastic demand for sports drinks. The price raised from $1.00 to $1.50. Which could describe Will’s response?
He bought 15 bottles a month at $1.00 and 20 bottles a month at $1.50.
He bought 10 bottles a month at $1.00 and 5 bottles a month at $1.50.
He bought 10 bottles a month at $1.00 and 8 bottles a month at $1.50.
He bought 15 bottles a month at $1.00 and 5 bottles a month at $1.50.
7
Why do fads often lead to shortages, at least in the short term?
Demand increases, time needed for quantity supplied and price to increase
Manufacturers charge extremely high prices stores are unwilling to pay.
Laws prevent stores from responding to excess demand to prevent a shortage.
Buyers and sellers are unable to agree on a price for the good
8
If the government set a price of $2.00 a slice, how many slices of pizza will be sold each day, according to Figure 6.2?
200
150
none
250
9
When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has been reached?
excess demand
equilibrium
supply and demand
price floor
10
girl will buy 40 pencils at 25 cents each. at .10 each, she is will buy 100 pencils. Which could be true?
None of these statements is likely to be true.
She will buy 20 pencils at 20 cents apiece.
She will buy 100 pencils at 5 cents apiece.
She will buy 80 pencils at 15 cents apiece.
11
According to Figure 6.2, at the equilibrium price, how many slices of pizza will be sold?
250
150
300
200
12
Ceteris paribus is an assumption that has which of the following effects on a demand schedule?
It takes only prices into account.
It is accurate only at one price level.
It is accurate no matter what changes occur.
It considers the effects of all possible changes on demand.
13
According to Figure 5.4, what term describes elasticity of supply as the price increases from $1.00 to $2.00 a slice?
inelastic
extremely elastic
unitary elastic
elastic
14
What is an example of a variable cost in a major league baseball franchise?
stadium rent
stadium maintenance
ticket- tackers salaries
managers salary
15
Which of these is an example of a good with elastic supply?
plums
large hand-made rugs
sandwiches
passenger airplanes
16
sweaters, $100=makes 10, must spend $15 on wool. To make 11 sweaters ,must spend $17. what is the marginal cost of #11?
$2
$117
$1
$17
17
Why did Communist governments use a command economic system for many years?
in an attempt to create a society in which everyone was equal
to limit the costs of production of many goods
as a method of keeping the consumer from getting what he or she wanted
as a way to avoid the expense and difficulties of a free market
18
How is future price related to current demand?
If the price is expected to rise, current demand will rise.
If the price is expected to fall, current demand will rise.
Future price is not related to current demand.
If the price is expected to rise, current demand will drop.
19
a slice of pizza has just increased by $1. Based on Figure 4.4, which of the following statements is true?
Ashley will buy two fewer slices of pizza.
Ashley will buy four slices of pizza.
Ashley will not buy any pizza.
Ashley’s quantity demanded is unchanged.
20
According to Figure 6.2, in this market, a price of $1.00 would be
a subsidy
a price ceiling
the equilibrium floor
a price floor
21
A shift in the demand curve means which of the following?
a change in demand at every price
a decrese in both price and quantity demand
a change in cosumer income
a rise in prices
22
What factor has the greatest influence on elasticity and inelasticity of supply?
labor
profit
financing
time
23
According to Figure 4.4, how many slices of pizza will Ashley buy if the price is $1.00 per slice?
four
one
two
three
24
When prices rise, which of the following happens to income?
It buys less.
It rises to meet prices.
It goes down.
It is used to buy different things.
25
Which is an example of lower production costs brought about by the use of technology?
the importing of fresh vegetables.
the delivery costs of gasoline to the consumer by diesel trucks
the making of breads and pastries in local shops rather than large bakeries
the use of e-mail to replace slower surface mail
26
If the supply of a good is inelastic,
producers have diminishing marginal returns of labor
producers won't change their quantity supplied ifmarket price doubles.
producers increase quantity supplied in response to drops in price.
a small increase in price will lead producers to sharply increase supply.
27
When the selling price of a good goes up, what is the relationship to the quantity supplied?
A catering company buys a new dishwasher to make their work easier.
A food producer increases the # of acres of wheat he grows.
shop increases the # of sandwiches they supply when price is increased.
A milling company builds a new factory to process flour to export.
28
What kind of table lists the quantity of a good that a person will buy at different prices?
demand schedule
market demand curve
demand curve
market demand schedule
29
When prices rise, which of the following happens to income?
The demand is inelastic at a low price/becomes elastic as the price rises.
percentage change in demanded = percentage change in price.
The elasticity of demand is different at each unit on the price range.
The elasticity of demand is mathematically determined.
30
What kind of system is the United States economy based on?
market
production
cause and effect
centralized
