If the price of each pound of apples increases,

the quantity of apples demanded will increase.

All other things equal, if the price of apples increases,

the quantity of apples supplied will increase.

A product with an inelastic supply means that

producer are relatively insensitive to a change in the price of the product

When economists say that the demand for a product has increased, they mean that

consumer are willin and able to buy more of that product at any given price

Suppos that the demand for god X is price inelastic In this case a 10 percen increas in the price of good X wil resul in

a less than 10 percent decrease in the quantity demanded.

A given change in gasoline supply will result in a larger change in the equilibrium price of gasoline if the

price elasticity of demand for gasoline is lower.

An economy has a comparative advantage in the production of a good if it can

produce that good at a lower opportunity cost than another economy.

Scarcity is a situation in which

the available resources are not enough to satisfy the wants of the people

Suppose you are the chief executive officer of a firm, and you have been planning to reduce your prices.

You should consider raising the price.

The model that shows the goods and services the economy is capable of producing is

a production possibilities curve.

A decrease in supply will

shift the supply curve leftward.

social science that deals with making choices among alternatives.

The opportunity cost of a choice is the

value of the best alternative not chosen.

Trade can be beneficial to an economy because

more goods and services can be obtained at lower opportunity costs.

All of the following cause a shift of the demand curve for a good except for

a change in the price of that good.

Price elasticity of demand measures

a buyer's responsiveness to a change in price.

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Micro Econ Exam 1

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Questions 27

Answers

1
If the price of each pound of apples increases,
the demand for apples will decrease.
the quantity of apples demanded will increase.
the quantity of apples demanded will decrease.
the demand for apples will increase.
2
All other things equal, if the price of apples increases,
the quantity of apples supplied will increase.
the supply of apples will increase.
the quantity of apples supplied will decrease.
the supply of apples will decrease.
3
Which of the following is not held constant when constructing a supply curve for good A?
technology for producing good A
number of firms producing good A
price of good A
price of inputs for producing good A
4
A product with an inelastic supply means that
producer are relatively insensitive to a change in the price of the product
producers are relatively sensitive to a change in the price of the product.
consumers are relatively sensitive to a change in the price of the product.
consumer are relatively insensitive to a change in the price of the product
5
When economists say that the demand for a product has increased, they mean that
the demand curve has shifted to the left.
the price has decreased and consumers will buy more of the product.
consumer are willin and able to buy more of that product at any given price
consumers are willing to pay less for the product.
6
If the demand for hotdogs is elastic, then an increase in the price of hotdogs will
either raise or lower total revenue, depending on the starting price.
decrease total revenue.
not change total revenue.
increase total revenue.
7
Suppos that the demand for god X is price inelastic In this case a 10 percen increas in the price of good X wil resul in
a more than 10 percent decrease in the quantity demanded.
a more than 10 percent increase in the quantity demanded.
a less than 10 percent decrease in the quantity demanded.
a less than 10 percent increase in the quantity demanded.
8
Total revenue will decrease if price
falls and demand is unit elastic.
rises and demand is elastic.
rises and demand is inelastic.
rises and demand is unit elastic
9
The problem of determining what goods and services society should produce exists because
most of our resources are socially, rather than privately, owned.
resources are scarce.
resources are plentiful.
most of our resources are privately, rather than socially, owned.
10
A given change in gasoline supply will result in a larger change in the equilibrium price of gasoline if the
income elasticity for gasoline is higher.
price elasticity of demand for gasoline is lower.
price elasticity of demand for gasoline is higher.
income elasticity for gasoline is lower.
11
An economy has a comparative advantage in the production of a good if it can
produce that good with a higher opportunity cost than another economy.
produce that good at a lower opportunity cost than another economy.
produce that good outside its production possibilities curve.
produce that good with more resources than another economy.
12
If the quantit supplie increase by 2 percen when the price increase by 10 percent then the price elasticity of supply is
5 percent
5
0.2
10
13
Scarcity is a situation in which
a resource for one purpose doesn't require the use of resource for another
the available resources are not enough to satisfy the wants of the people
an item is very expensive.
people do not have enough money to pay for a good or service.
14
Suppose Ramen noodles are inferior goods. Ramen noodles' income elasticity of demand is:
equal to 0
greater than 1
equal to infinity
less than 0
15
Suppose you are the chief executive officer of a firm, and you have been planning to reduce your prices.
You should consider a decrease in production and keep the price the same.
You should not change anything.
You should consider lowering the price.
You should consider raising the price.
16
The model that shows the goods and services the economy is capable of producing is
utility.
a production possibilities curve.
ceteris paribus.
the fallacy of composition.
17
A decrease in supply will
cause an upward movement along an existing supply curve.
cause a downward movement along an existing supply curve.
shift the supply curve rightward.
shift the supply curve leftward.
18
Economics is a
humanitie that is mainly concerned with limited wants with unlimited resour
scienc that deals with the fair allocation of limite resource among people.
natural science focused on creating a greater quantity of scarce resources.
social science that deals with making choices among alternatives.
19
If the income elasticity of demand is negative, the good is
inferior
under-supplied
Normal
complimentary
20
A minimum price set above the equilibrium price is a:
demand price
price ceiling
price floor
supply price
21
The concept of comparative advantage is based upon:
absolute labor productivity
relative opportunity costs
relative labor costs
dollar prices of labor
22
If the cross price elasticity of demand is positive, what would that tell you about the two compared goods?
The two goods are over-priced.
The two goods are complements.
One good is becoming obsolete.
The two goods are substitutes.
23
The opportunity cost of a choice is the
value of the best alternative not chosen.
dollar amount paid to purchase what is chosen.
consequence associated with failure.
benefit associated with making that choice.
24
The price elasticity of supply is a measure of how sensitive producers are to a change in:
market supply
input prices
technology
the price of a good or service
25
Trade can be beneficial to an economy because
more goods and services can be obtained at lower opportunity costs.
d
it prevents unemployment.
n
26
All of the following cause a shift of the demand curve for a good except for
a change in consumer income.
a change in the price of a related good.
a change in consumer tastes.
a change in the price of that good.
27
Price elasticity of demand measures
a buyer's responsiveness to a change in income.
a buyer's responsiveness to a change in price.
how much supply changes for a change in demand.
how much demand changes for a change in supply.

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