Quiz
Chapter 5
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Fragen in diesem Quiz (38)
1If the price elasticity of demand for apples is 0.8, then a 2.4% increase in the price of apples will decrease the quantity demanded of apples by
- A1.92%, and apples sellers' total revenue will increase as a result.
- B1.92%, and apples sellers' total revenue will decrease as a result.
- C3%, and apples sellers' total revenue will increase as a result.
- D3%, and apples sellers' total revenue will decrease as a result.
Question 4 Scenario 5-3
2You have just been hired as a business consultant to determine what pricing policy would be appropriate to increase the total revenue of a bakery. The first step you would take would be to
- Aincrease the price of every loaf of break in the store
- Blook for ways to cut costs and increase profit for the bakery
- Cdetermine the price elasticity of demand for the bakery's products
- Ddetermine the price elasticity of supply for the bakery's products
3If a change in the price of a good results in no change in total revenue, then
- Athe demand for the good must be elastic
- Bthe demand for the good must be inelastic
- Cthe demand for the good must be unit elastic
- Dbuyers must not respond very much to change in price
4The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10%
The change in equilibrium will be- Agreater in the aged cheddar cheese market than in the bread market
- Bgreater in the bread market than in the aged cheddar market
- Cthe same in the cheddar and bread markets
- Dany of the above could be correct
5Some firms eventually experience problems with their capacity to produce output as their output levels increase. For these firms,
- Amarket power is substantial
- Bsupply is perfectly inelastic
- Csupply is more elastic at low levels of output and less elastic at high levels of output
- Dsupply is less elastic at low levels of output and more elastic at high levels of output
6How does total revenue change as one moves downward and to the right along a linear demand curve?
- Ait always increases
- Bit always decreases
- Cit first increases, then decreases
- Dit is unaffected by a movement along the demand curve
7if the price of elasticity of demand for a good is 2.0, then a 10% increase in price results in a
- A.2% decrease in the quantity demanded
- B5% decrease in the quantity demanded
- C20% decrease in the quantity demanded
- D40% decrease in the quantity demanded
8Which of the following statements about the price elasticity of demand is correct?
- Athe price elasticity of demand for a good measures the willingness of buyers of the good to buy less of the good as its price increases
- Bprice elasticity of demand reflects the many economic, psychological, and social forces that shape consumer tastes
- Cother things equal, if good x has close substitutes and good y does not have close substitutes, then the demand for good x will be more elastic than the demand for good y
- Dall of the above are correct
9Milk has an inelastic demand, and beef has an elastic demand. Suppose that a mysterious increase in bovine infertility decreases both the population of cows and cattle by 50%
Total consumer spending on milk will- Aincrease, and total consumer spending on beef will increase
- Bincrease, and total consumer spending on beef will decrease
- Cdecrease, and total consumer spending on beef will increase
- Ddecrease, and total consumer spending on beef will decrease
10the demand for Godiva mint chocolates is likely quite elastic because
- Athere are many close substitutes
- Bthis particular type of chocolate is viewed as a luxury by many chocolate lovers
- Cthe market is narrowly defined
- Dall of the above are correct
11Farm programs that pay farmers not to plant crops on all their land
- Ahurt farmers by lowering their total revenue and hurt consumers by causing shortages of some food items
- Bhelp farmers by cutting costs, which helps consumers by lowering food prices
- Chelp farmers by increasing total revenue in the market but hurt consumers by raising food prices
- Dhelp farmers directly since they receive government payments but have no real effect on consumers
12other things equal, the demand for a good to be more inelastic, the
- Afewer the available substitutes
- Blonger the time period considered
- Cmore the good is considered a luxury good
- Dmore narrowly defined is the market for the good
13Which of the following is likely to have the most price inelastic demand?
- Aathletic shoes
- Brunning shoes
- Cnike running shoes
- Dnike shox running shoes
14given the market for illegal drugs, when the government is successful in reducing the flow of drugs into the United States
- Asupply decreases, demand is unaffected, and price increases
- Bdemand decreases, supply is unaffected, and price decreases
- Cdemand and supply both decreases, leaving price essentially unchanged
- Dsupply decreases, demand increases, and price increases substantially
15The federal government is concerned about the negative effects of cigarette smoking in the United States. Suppose Congress is considering two plans. One plan would limit the production of cigarettes. The other would require manufacturers to include graphic photos on cigarette packages of people suffering cancer's effects. Which of the following statements is true?
- ABoth programs would increase the price of cigarettes
- Bboth programs would reduce the quantity of cigarettes sold
- Cboth programs would decrease revenues for cigarette manufactureres
- Dall of the above are correct
16Which of the following is likely to have the most price elastic demand?
- Aice cream
- Bfrozen yogurt
- Cvanilla ice cream
- DHaagen-Daza vanilla bean ice cream
17The federal government is concerned about obesity in the United States. Congress is considering two plans. One will ban the production and sale of "junk food." The other will increase nutrition-education programs and include substantial advertising campaigns to encourage healthy eating habits. The junk-food ban program
- Aand the education program will reduce the quantity of junk food sold and raise the price
- Band the education program will reduce the quantity of junk food sold and lower the price
- Cwill reduce the quantity of junk food sold and raise the price. the education program will reduce the quantity of junk food sold and lower the price
- Dwill reduce the quantity of junk food sold and lower the price. the education program will reduce the quantity of junk food sold and raise the price
18The price elasticity of demand for a good measures the willingness of
- Aconsumers to buy less of the good as price rises
- Bconsumers to avoid monopolistic markets in favor of competitive markets
- Cfirms to produce more of a good as price rises
- Dfirms to respond to the tastes of consumers
19If the price elasticity of supply for a good is equal to infinity, then the
- Asupply curve is vertical
- Bsupply curve is horizontal
- Csupply curve also has a slope equal to infinity
- Dquantity supplied is constant regardless of the price
20for a good that is a necessity, demand
- Atends to be inelastic
- Btends to be elastic
- Ctends to be unit elastic
- Dcannot be represented by a demand curve in the usual way
21she needs a $50 bike. starts a lemonade stand. mom is paying for the ingredients. she is currently charging 25 cents per cup, but she wants to adjust her price to earn the $50 faster. if you know that the demand for lemonade is elastic, what is your advise to her?
- Aleave the price and be patient
- Braise the price to increase total revenue
- Clower the price to increase total revenue
- Dthere isn't enough info given to answer this question
22Suppose that 50 hot dogs are demanded at a particular price. if the price of hot dogs rises from the price by 5%, the number of hot dogs demanded falls to 48. using the midpoint approach to calculate the price elasticity of demand, it follows that the
- Ademand for hot dogs in this price range is unit elastic
- Bprice increase will decrease the total revenue of hot dog sellers
- Cprice elasticity of demand for hot dogs in this price range is about 1.22
- Dprice elasticity of demand for hot dogs in this price range is about .82
23when the price of chai tea lattes is $5, maxine buys 20 per month, when the price is $4 she buys 30 per month. Maxine's demand for chai tea lattes is
- Aelastic, and her demand curve would be relatively flat
- Belastic, and her demand curve would be relatively steep
- Cinelastic, and her demand curve would be relatively flat
- Dinelastic, and her demand curve would be relatively steep
24for a particular good, a 10% increase in price causes a 3% decrease in quantity demanded, which of the following statements is most likely applicable to this good?
- Athe relevant time horizon is short
- Bthe good is luxury
- Cthe market for the good is narrowly defined
- Dthere are many close subs for this good
25for a particular good, a 8% increase in price causes a 4% decrease in quantity demanded, which of the following statements is most likely applicable to this good?
- Athere are many close subs for this good
- Bthe good is a luxury
- Cthe market for the good is broadly defined
- Dthe relevant time horizon is long
26Whether a good is luxury or necessity depends on the
- Aprice of the good
- Bpreference of the buyer
- Cintrinsic properties of the good
- Dscarcity of the good
27a perfectly elastic demand implies that
- Abuyers will not respond to any change in price
- Bany rise in price above that represented by the demand curve will result in a quantity demanded of zero
- Cquantity demanded and price change by the same percent as we move along the demand curve
- Dprice will rise by an infinite amount when there is a change in quantity demanded
28The smaller the price elasticity of demand, the
- Amore likely the product is a luxury
- Bsmaller the responsiveness of quantity demanded to a change in price
- Cmore substitutes the product has
- Dgreater the responsiveness of quantity demanded to change in price
29A 10% increase in gas prices reduces gas consumption by about
- A6% after 1 year and 2.5% after 5 years
- B2.5% after 1 year and 6% after 5 years
- C10% after 1 year and 20% after 5 years
- D0% after 1 year and 1% after 5 years
30Suppose the government is concerned about firms in the US importing illegal caviar. As a result, the government increases border patrols to catch illegal shipments. US Customs agents perform DNA testing on the caviar to determine if it come from endangered species of fish. If so, the government destroys the caviar
What would we expect to observe in the caviar market?- Aequilibrium prices and quantities will increase
- Bequilibrium prices will increase by more if the demand for caviar is elastic than if demand is inelastic
- Ctotal revenues to caviar farms will increase if the demand for caviar is inelastic
- Dall of the above are correct
31If demand is price inelastic, then when price rises, total revenue
- Awill fall
- Bwill rise
- Cwill remain unchanged
- Dmay rise, fail, or remain unchanged, more info is needed to determine the change in total revenue with certainit
32If the quantity supplied responds only slightly to changes in price, then
- Asupply is said to be elastic
- Bsupply is said to be inelastic
- Can increase in price will not shift the supply curve very much
- Deven a large decrease in demand will change the equilibrium price only slightly
33Studies indicate that the price elasticity of demand for beer is about .9. A government policy aimed at reducing beer consumption changed the price of a case of beer to $10 to $20. According to the midpoint method, the government policy should have reduced beer consumption by
- A30%
- B40%
- C60%
- D74%
34if the quantity supplied is the same regardless of price, then supply is
- Aelastic
- Bperfectly elastic
- Cperfectly inelastic
- Dinelastic
35for a particular good, a 5% increase in a price causes a 2% decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
- Athere are many close subs for this good
- Bthe good is a luxury
- Cthe market for this good is broadly defined
- Dthe relevant time hoirzion is long
36the case of perfectly elastic demand is illustrated by a demand curve that is
- Avertical
- Bhorizontal
- Cdownward-slopping but relatively steep
- Ddownward-slopping but relatively flat
37suppose that the supply of cheese is inelastic, and the supply of bread is elastic. both goods are considered to be normal goods by a majority of consumers. supposed that a large income tax increase decreases the demand for both goods by 10%
the price elasticity of supply for cheese could be- A-1
- B0
- C.5
- D1.5
38GSU is contemplating an increase in tuition to enhance revenue. if GSU feels that raising tuition would enhance revenue, it is
- Aignoring the law of demand
- Bassuming that demand for university education is elastic
- Cassuming that demand for university education is inelastic
- Dassuming that the supply of university education is elastic
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- Beschreibung
- 101 Economics Quiz am Chapter 5, erstellt von Andie Star am 24/06/2016.
- Autor
- Andie Star
- Sprache
- English
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