# ECO 231 test

Quiz by Kyna Finley, updated more than 1 year ago
 Created by Kyna Finley about 6 years ago
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exam review

## 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
• .75
• .33
• 1.33
• 1

### Question 2

Question
The university hopes to increase revenue by increasing parking fees. This plan will only work if
• 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
• negative
• positive
• 0

### Question 4

Question
a demand curve that is perfectly inelastic is
• 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
• 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
• 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.
• 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________.
• 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
• inelastic demand < 1
• elastic demand < 1
• unit elastic demand < 1

### Question 10

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

### Question 11

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

### Question 12

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

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