Kyna Finley
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Kyna Finley
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ECO 231 test

ECO 231 test

Question 1 of 12

1

If the price of a good increases by 15%and the quantity demanded changes by 20%, then the price elasticity of demand is

Select one of the following:

  • .75

  • .33

  • 1.33

  • 1

Explanation

Question 2 of 12

1

The university hopes to increase revenue by increasing parking fees. This plan will only work if

Select one of the following:

  • The price effect is larger than the quantity effect

  • the price effect is smaller than the quantity effect

  • the price effect and quantity effect are the same

Explanation

Question 3 of 12

1

For an inferior good, elasticity of demand will be

Select one of the following:

  • negative

  • positive

  • 0

Explanation

Question 4 of 12

1

a demand curve that is perfectly inelastic is

Select one of the following:

  • vertical

  • horizontal

  • downward sloping

  • upward sloping

Explanation

Question 5 of 12

1

The burden on the tax that is imposed on a good is said to fall completely on the consumers if

Select one of the following:

  • price paid by consumers for good declines by the amount of tax

  • price paid by consumers for good increases by the amount of tax

  • price paid by consumers does no change

Explanation

Question 6 of 12

1

at whatever quantity_________, the decision maker should do________ of the activity

Select one of the following:

  • MB<MC, that amount

  • MB<MC, less

  • MB>MC, less

  • MB>MC, none

Explanation

Question 7 of 12

1

Use the midpoint method to determine price elasticity of demand if: Price decreases from $2.50 to $2.25 and quantity demand per period increases from 0 to 25.

Select one of the following:

  • 9

  • 19

  • 119

  • .5

Explanation

Question 8 of 12

1

If these countries used all of their resources, this is the amount of each product they could produce.
Spain: 50 pounds of wheat, 100 toys
America: 25 pounds of wheat, 75 toys
Spain has an absolute advantage in___________ and a comparative advantage in__________. America has the comparative advantage in________.

Select one of the following:

  • toys, wheat, toys

  • toys, toys, toys

  • wheat and toys, wheat, toys

  • neither, toys, wheat

Explanation

Question 9 of 12

1

Which of the following is true about price elasticity of demand

Select one of the following:

  • inelastic demand < 1

  • elastic demand < 1

  • unit elastic demand < 1

Explanation

Question 10 of 12

1

Increase price will increase revenue if demand is

Select one of the following:

  • elastic

  • inelastic

  • unit elastic

Explanation

Question 11 of 12

1

If a company sold 1,100 units at $0.90 each, what is total revenue?

Select one of the following:

  • $900

  • $0.90

  • $1,100

  • $990

Explanation

Question 12 of 12

1

A luxury tends to be more___________, while necessity is more__________.

Select one of the following:

  • elastic, inelastic

  • inelastic, elastic

Explanation

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