ECO 231 test

Kyna Finley
Quiz by Kyna Finley, updated more than 1 year ago
Kyna Finley
Created by Kyna Finley about 6 years ago
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Resource summary

Question 1

Question
If the price of a good increases by 15%and the quantity demanded changes by 20%, then the price elasticity of demand is
Answer
  • .75
  • .33
  • 1.33
  • 1

Question 2

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

Question 3

Question
For an inferior good, elasticity of demand will be
Answer
  • negative
  • positive
  • 0

Question 4

Question
a demand curve that is perfectly inelastic is
Answer
  • vertical
  • horizontal
  • downward sloping
  • upward sloping

Question 5

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

Question 6

Question
at whatever quantity_________, the decision maker should do________ of the activity
Answer
  • MB<MC, that amount
  • MB<MC, less
  • MB>MC, less
  • MB>MC, none

Question 7

Question
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.
Answer
  • 9
  • 19
  • 119
  • .5

Question 8

Question
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________.
Answer
  • toys, wheat, toys
  • toys, toys, toys
  • wheat and toys, wheat, toys
  • neither, toys, wheat

Question 9

Question
Which of the following is true about price elasticity of demand
Answer
  • inelastic demand < 1
  • elastic demand < 1
  • unit elastic demand < 1

Question 10

Question
Increase price will increase revenue if demand is
Answer
  • elastic
  • inelastic
  • unit elastic

Question 11

Question
If a company sold 1,100 units at $0.90 each, what is total revenue?
Answer
  • $900
  • $0.90
  • $1,100
  • $990

Question 12

Question
A luxury tends to be more___________, while necessity is more__________.
Answer
  • elastic, inelastic
  • inelastic, elastic
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