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Hell on Earth Economics [Teacher: Abdinova Makpal ; Final Exam + Quizzes] ▼ (Quizzes #2 & #3 [Chapters 1-3, 4-6, 13-17-18, 23-24]) Quiz am Quiz #2/3 [MCQ | Chapter 4-6], erstellt von Good Guy Beket am 02/12/2018.

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Quiz #2/3 [MCQ | Chapter 4-6]

Frage 1 von 60

1

A perfectly competitive market has

Wähle eine der folgenden:

  • firms that set their own prices.

  • only one seller.

  • at least a few sellers.

  • many buyers and sellers.

  • none of these answers.

Erklärung

Frage 2 von 60

1

If an increase in the price of blue jeans leads to an increase in the demand for
tennis shoes, then blue jeans and tennis shoes are:

Wähle eine der folgenden:

  • complements.

  • inferior goods.

  • normal goods.

  • none of these answers.

  • substitutes.

Erklärung

Frage 3 von 60

1

The law of demand states that an increase in the price of a good

Wähle eine der folgenden:

  • increases the supply of that good.

  • decreases the quantity demanded for that good.

  • decreases the demand for that good.

  • increases the quantity supplied of that good.

  • none of these answers.

Erklärung

Frage 4 von 60

1

The law of supply states that an increase in the price of a good

Wähle eine der folgenden:

  • none of these answers.

  • increases the quantity supplied of that good.

  • increases the supply of that good.

  • decreases the demand for that good.

  • decreases the quantity demanded for that good.

Erklärung

Frage 5 von 60

1

If an increase in consumer incomes leads to a decrease in the demand for camping equipment, then camping equipment is

Wähle eine der folgenden:

  • a normal good.

  • none of these answers.

  • an inferior good.

  • a substitute good.

  • a complementary good.

Erklärung

Frage 6 von 60

1

A monopolistic market has

Wähle eine der folgenden:

  • many buyers and sellers.

  • none of these answers.

  • firms that are price takers.

  • only one seller.

  • at least a few sellers.

Erklärung

Frage 7 von 60

1

Which of the following shifts the demand for watches to the right?

Wähle eine der folgenden:

  • an increase in the price of watches

  • none of these answers

  • a decrease in the price of watch batteries if watch batteries and watches are complements

  • a decrease in consumer incomes if watches are a normal good

  • a decrease in the price of watches

Erklärung

Frage 8 von 60

1

All of the following shift the supply of watches to the right except

Wähle eine der folgenden:

  • an advance in the technology used to manufacture watches.

  • an increase in the price of watches.

  • All of these answers cause an increase in the supply of watches.

  • a decrease in the wage of workers employed to manufacture watches.

  • manufacturers' expectation of lower watch prices in the future.

Erklärung

Frage 9 von 60

1

If the price of a good is above the equilibrium price,

Wähle eine der folgenden:

  • there is a surplus and the price will rise.

  • there is a shortage and the price will fall.

  • there is a shortage and the price will rise.

  • the quantity demanded is equal to the quantity supplied and the price remains unchanged.

  • there is a surplus and the price will fall.

Erklärung

Frage 10 von 60

1

If the price of a good is below the equilibrium price,

Wähle eine der folgenden:

  • there is a shortage and the price will rise.

  • the quantity demanded is equal to the quantity supplied and the price remains unchanged.

  • there is a shortage and the price will fall.

  • there is a surplus and the price will rise.

  • there is a surplus and the price will fall.

Erklärung

Frage 11 von 60

1

If the price of a good is equal to the equilibrium price,

Wähle eine der folgenden:

  • there is a shortage and the price will fall.

  • the quantity demanded is equal to the quantity supplied and the price remains unchanged.

  • there is a surplus and the price will rise.

  • there is a shortage and the price will rise.

  • there is a surplus and the price will fall.

Erklärung

Frage 12 von 60

1

An increase (rightward shift) in the demand for a good will tend to cause

Wähle eine der folgenden:

  • an increase in the equilibrium price and quantity.

  • none of these answers.

  • an increase in the equilibrium price and a decrease in the equilibrium quantity.

  • a decrease in the equilibrium price and an increase in the equilibrium quantity.

  • a decrease in the equilibrium price and quantity.

Erklärung

Frage 13 von 60

1

A decrease (leftward shift) in the supply for a good will tend to cause

Wähle eine der folgenden:

  • an increase in the equilibrium price and quantity.

  • a decrease in the equilibrium price and an increase in the equilibrium quantity.

  • none of these answers.

  • a decrease in the equilibrium price and quantity.

  • an increase in the equilibrium price and a decrease in the equilibrium quantity.

Erklärung

Frage 14 von 60

1

Suppose there is an increase in both the supply and demand for personal computers. In the market for personal computers, we would expect

Wähle eine der folgenden:

  • the equilibrium quantity to rise and the equilibrium price to rise.

  • the equilibrium quantity to rise and the equilibrium price to fall.

  • the equilibrium quantity to rise and the equilibrium price to remain constant.

  • the change in the equilibrium quantity to be ambiguous and the equilibrium price to rise.

  • the equilibrium quantity to rise and the change in the equilibrium price to be ambiguous.

Erklärung

Frage 15 von 60

1

Suppose there is an increase in both the supply and demand for personal computers. Further, suppose the supply of personal computers increases more than demand for personal computers. In the market for personal computers, we would expect

Wähle eine der folgenden:

  • the change in the equilibrium quantity to be ambiguous and the equilibrium price to fall.

  • the equilibrium quantity to rise and the equilibrium price to rise.

  • the equilibrium quantity to rise and the change in the equilibrium price to be ambiguous.

  • the equilibrium quantity to rise and the equilibrium price to fall.

  • the equilibrium quantity to rise and the equilibrium price to remain constant.

Erklärung

Frage 16 von 60

1

Which of the following statements is true about the impact of an increase in the price of lettuce?

Wähle eine der folgenden:

  • Both the demand for lettuce will decrease and the equilibrium price and quantity of salad dressing will fall.

  • The supply of lettuce will decrease.

  • The demand for lettuce will decrease.

  • The equilibrium price and quantity of salad dressing will fall.

  • The equilibrium price and quantity of salad dressing will rise.

Erklärung

Frage 17 von 60

1

Suppose a frost destroys much of the Florida orange crop. At the same time, suppose consumer tastes shift toward orange juice. What would we expect to happen to the equilibrium price and quantity in the market for orange juice?

Wähle eine der folgenden:

  • Price will decrease; quantity is ambiguous.

  • The impact on both price and quantity is ambiguous.

  • Price will increase; quantity will increase.

  • Price will increase; quantity will decrease.

  • Price will increase; quantity is ambiguous.

Erklärung

Frage 18 von 60

1

Suppose consumer tastes shift toward the consumption of apples. Which of the following statements is an accurate description of the impact of this event on the market for apples?

Wähle eine der folgenden:

  • There is an increase in the quantity demanded of apples and in the supply for apples.

  • There is an increase in the demand and supply of apples.

  • There is an increase in the demand for apples and a decrease in the supply of apples.

  • There is a decrease in the quantity demanded of apples and an increase in the supply for apples.

  • There is an increase in the demand for apples and an increase in the quantity supplied of apples.

Erklärung

Frage 19 von 60

1

Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today?

Wähle eine der folgenden:

  • The impact on both price and quantity is ambiguous.

  • Price will decrease; quantity is ambiguous.

  • Price will increase; quantity will decrease.

  • Price will increase; quantity is ambiguous.

  • Price will increase; quantity will increase.

Erklärung

Frage 20 von 60

1

An inferior good is one for which an increase in income causes a(n)

Wähle eine der folgenden:

  • decrease in supply.

  • increase in demand.

  • increase in supply.

  • decrease in demand.

Erklärung

Frage 21 von 60

1

If a small percentage increase in the price of a good greatly reduces the quantity demanded for that good, the demand for that good is

Wähle eine der folgenden:

  • income inelastic.

  • price inelastic.

  • price elastic.

  • unit price elastic.

  • income elastic.

Erklärung

Frage 22 von 60

1

The price elasticity of demand is defined as

Wähle eine der folgenden:

  • the percentage change in the quantity demanded divided by the percentage change in income.

  • the percentage change in income divided by the percentage change in the quantity demanded.

  • the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good.

  • none of these answers.

  • the percentage change in price of a good divided by the percentage change in the quantity demanded of that good.

Erklärung

Frage 23 von 60

1

In general, a flatter demand curve is more likely to be

Wähle eine der folgenden:

  • price elastic.

  • unit price elastic.

  • none of these answers.

  • price inelastic.

Erklärung

Frage 24 von 60

1

In general, a steeper supply curve is more likely to be

Wähle eine der folgenden:

  • price elastic.

  • none of these answers.

  • unit price elastic.

  • price inelastic.

Erklärung

Frage 25 von 60

1

Which of the following would cause a demand curve for a good to be price inelastic?

Wähle eine der folgenden:

  • The good is a luxury.

  • There are a great number of substitutes for the good.

  • The good is a necessity.

  • The good is an inferior good.

Erklärung

Frage 26 von 60

1

The demand for which of the following is likely to be the most price inelastic?

Wähle eine der folgenden:

  • transportation

  • taxi rides

  • bus tickets

  • airline tickets

Erklärung

Frage 27 von 60

1

If the cross-price elasticity between two goods is negative, the two goods are likely to be

Wähle eine der folgenden:

  • substitutes.

  • complements.

  • necessities.

  • luxuries.

Erklärung

Frage 28 von 60

1

If a supply curve for a good is price elastic, then

Wähle eine der folgenden:

  • the quantity supplied is sensitive to changes in the price of that good.

  • the quantity demanded is insensitive to changes in the price of that good.

  • the quantity demanded is sensitive to changes in the price of that good.

  • the quantity supplied is insensitive to changes in the price of that good.

  • none of these answers.

Erklärung

Frage 29 von 60

1

If a fisherman must sell all of his daily catch before it spoils for whatever price he is offered, once the fish are caught the fisherman's price elasticity of supply for fresh fish is

Wähle eine der folgenden:

  • zero.

  • infinite.

  • one.

  • unable to be determined from this information.

Erklärung

Frage 30 von 60

1

A decrease in supply (shift to the left) will increase total revenue in that market if

Wähle eine der folgenden:

  • demand is price inelastic.

  • supply is price elastic.

  • supply is price inelastic.

  • demand is price elastic.

Erklärung

Frage 31 von 60

1

If an increase in the price of a good has no impact on the total revenue in that market, demand must be

Wähle eine der folgenden:

  • all of these answers.

  • price inelastic.

  • unit price elastic.

  • price elastic.

Erklärung

Frage 32 von 60

1

If consumers always spend 15 percent of their income on food, then the income elasticity of demand for food is

Wähle eine der folgenden:

  • 1.50.

  • 1.15.

  • none of these answers.

  • 0.15.

  • 1.00.

Erklärung

Frage 33 von 60

1

Technological improvements in agriculture that shift the supply of agricultural commodities to the right tend to

Wähle eine der folgenden:

  • increase total revenue to farmers as a whole because the demand for food is elastic.

  • increase total revenue to farmers as a whole because the demand for food is inelastic.

  • reduce total revenue to farmers as a whole because the demand for food is elastic.

  • reduce total revenue to farmers as a whole because the demand for food is inelastic.

Erklärung

Frage 34 von 60

1

If supply is price inelastic, the value of the price elasticity of supply must be

Wähle eine der folgenden:

  • infinite.

  • zero.

  • less than 1.

  • none of these answers.

  • greater than 1.

Erklärung

Frage 35 von 60

1

If there is excess capacity in a production facility, it is likely that the firm's supply curve is

Wähle eine der folgenden:

  • price inelastic.

  • none of these answers.

  • unit price elastic.

  • price elastic.

Erklärung

Frage 36 von 60

1

Suppose that at a price of €30 per month, there are 30,000 subscribers to cable television in Small Town. If Small Town Cablevision raises its price to €40 per month, the number of subscribers will fall to 20,000. Using the midpoint method for calculating the elasticity, what is the price elasticity of demand for cable TV in Small Town?

Wähle eine der folgenden:

  • 1.4

  • 0.66

  • 0.75

  • 2.0

  • 1.0

Erklärung

Frage 37 von 60

1

Suppose that at a price of €30 per month, there are 30,000 subscribers to cable television in Small Town. If Small Town Cablevision raises its price to €40 per month, the number of subscribers will fall to 20,000. At which of the following prices does Small Town Cablevision earn the greatest total revenue?

Wähle eine der folgenden:

  • €0 per month

  • €30 per month

  • €40 per month

  • Either €30 or €40 per month because the price elasticity of demand is 1.0.

Erklärung

Frage 38 von 60

1

If demand is linear (a straight line), then price elasticity of demand is

Wähle eine der folgenden:

  • elastic in the upper portion and inelastic in the lower portion.

  • inelastic in the upper portion and elastic in the lower portion.

  • inelastic throughout.

  • constant along the demand curve.

  • elastic throughout.

Erklärung

Frage 39 von 60

1

If the income elasticity of demand for a good is negative, it must be

Wähle eine der folgenden:

  • an elastic good.

  • an inferior good.

  • a normal good.

  • a luxury good.

Erklärung

Frage 40 von 60

1

If consumers think that there are very few substitutes for a good, then

Wähle eine der folgenden:

  • supply would tend to be price elastic.

  • none of these answers.

  • demand would tend to be price inelastic.

  • demand would tend to be price elastic.

  • supply would tend to be price inelastic.

Erklärung

Frage 41 von 60

1

For a price ceiling to be a binding constraint on the market, the government must set it

Wähle eine der folgenden:

  • above the equilibrium price.

  • below the equilibrium price.

  • precisely at the equilibrium price.

  • at any price because all price ceilings are binding constraints.

Erklärung

Frage 42 von 60

1

A binding price ceiling creates

Wähle eine der folgenden:

  • a shortage or a surplus depending on whether the price ceiling is set above or below the equilibrium price.

  • a surplus.

  • a shortage.

  • an equilibrium.

Erklärung

Frage 43 von 60

1

Suppose the equilibrium price for apartments is €500 per month and the government imposes rent controls of €250. Which of the following is unlikely to occur as a result of the rent controls?

Wähle eine der folgenden:

  • There may be long lines of buyers waiting for apartments.

  • Landlords may discriminate among apartment renters.

  • Landlords may be offered bribes to rent apartments.

  • There will be a shortage of housing.

  • The quality of apartments will improve.

Erklärung

Frage 44 von 60

1

A price floor

Wähle eine der folgenden:

  • always determines the price at which a good must be sold.

  • sets a legal maximum on the price at which a good can be sold.

  • is not a binding constraint if it is set above the equilibrium price.

  • sets a legal minimum on the price at which a good can be sold.

Erklärung

Frage 45 von 60

1

Which of the following statements about a binding price ceiling is true?

Wähle eine der folgenden:

  • The shortage created by the price ceiling is greater in the short run than in the long run.

  • The surplus created by the price ceiling is greater in the short run than in the long run.

  • The surplus created by the price ceiling is greater in the long run than in the short run.

  • The shortage created by the price ceiling is greater in the long run than in the short run.

Erklärung

Frage 46 von 60

1

Which side of the market is more likely to lobby government for a price floor?

Wähle eine der folgenden:

  • the buyers

  • Neither buyers nor sellers desire a price floor.

  • the sellers

  • Both buyers and sellers desire a price floor.

Erklärung

Frage 47 von 60

1

The surplus caused by a binding price floor will be greatest if

Wähle eine der folgenden:

  • demand is inelastic and supply is elastic.

  • supply is inelastic and demand is elastic.

  • both supply and demand are elastic.

  • both supply and demand are inelastic.

Erklärung

Frage 48 von 60

1

Which of the following is an example of a price floor?

Wähle eine der folgenden:

  • the minimum wage

  • rent controls

  • restricting petrol prices to €1.00 per litre when the equilibrium price is €1.50 per litre

  • All of these answers are price floors.

Erklärung

Frage 49 von 60

1

Which of the following statements is true if the government places a price ceiling on petrol at €1.50 per litre and the equilibrium price is €1.00 per litre?

Wähle eine der folgenden:

  • A significant increase in the demand for petrol could cause the price ceiling to become a binding constraint.

  • A significant increase in the supply of petrol could cause the price ceiling to become a binding constraint.

  • There will be a shortage of petrol.

  • There will be a surplus of petrol.

Erklärung

Frage 50 von 60

1

Which of the following workers would be most likely to find it more difficult to get a job after a rise in the minimum wage rate?

Wähle eine der folgenden:

  • A teenage worker with few qualifications.

  • A manual worker with fifteen years of work experience.

  • A professional worker with a university degree.

  • All three are equally likely to find it difficult to get a job.

Erklärung

Frage 51 von 60

1

Within the supply and demand model, a tax collected from the buyers of a good shifts the

Wähle eine der folgenden:

  • supply curve downward by the size of the tax per unit.

  • supply curve upward by the size of the tax per unit.

  • demand curve upward by the size of the tax per unit.

  • demand curve downward by the size of the tax per unit.

Erklärung

Frage 52 von 60

1

Within the supply and demand model, a tax collected from the sellers of a good shifts the

Wähle eine der folgenden:

  • demand curve downward by the size of the tax per unit.

  • supply curve downward by the size of the tax per unit.

  • demand curve upward by the size of the tax per unit.

  • supply curve upward by the size of the tax per unit.

Erklärung

Frage 53 von 60

1

Which of the following takes place when a tax is placed a good?

Wähle eine der folgenden:

  • a decrease in the price buyers pay, an increase in the price sellers receive, and a decrease in the quantity sold

  • an increase in the price buyers pay, a decrease in the price sellers receive, and an increase in the quantity sold

  • a decrease in the price buyers pay, an increase in the price sellers receive, and an increase in the quantity sold

  • an increase in the price buyers pay, a decrease in the price sellers receive, and a decrease in the quantity sold

Erklärung

Frage 54 von 60

1

When a tax is collected from the buyers in a market,

Wähle eine der folgenden:

  • the tax burden falls most heavily on the buyers.

  • the buyers bear the burden of the tax.

  • the sellers bear the burden of the tax.

  • the tax burden on the buyers and sellers is the same as an equivalent tax collected from the sellers.

Erklärung

Frage 55 von 60

1

A tax of €1.00 per litre on petrol

Wähle eine der folgenden:

  • places a tax wedge of €1.00 between the price the buyers pay and the price the sellers receive.

  • decreases the price the sellers receive by €1.00 per litre.

  • increases the price the buyers pay by €1.00 per litre.

  • increases the price the buyers pay by precisely €0.50 and reduces the price received by sellers by precisely €0.50.

Erklärung

Frage 56 von 60

1

The burden of a tax falls more heavily on the sellers in a market when

Wähle eine der folgenden:

  • both supply and demand are elastic.

  • both supply and demand are inelastic.

  • demand is inelastic and supply is elastic.

  • demand is elastic and supply is inelastic.

Erklärung

Frage 57 von 60

1

A tax placed on a good that is a necessity for consumers will likely generate a tax burden that

Wähle eine der folgenden:

  • falls more heavily on sellers.

  • falls entirely on sellers.

  • falls more heavily on buyers.

  • is evenly distributed between buyers and sellers.

Erklärung

Frage 58 von 60

1

The burden of a tax falls more heavily on the buyers in a market when

Wähle eine der folgenden:

  • both supply and demand are inelastic.

  • demand is elastic and supply is inelastic.

  • both supply and demand are elastic.

  • demand is inelastic and supply is elastic.

Erklärung

Frage 59 von 60

1

Which of the following statements about the burden of a tax is correct?

Wähle eine der folgenden:

  • The tax burden generated from a tax placed on a good consumers perceive to be a necessity will fall most heavily on the sellers of the good.

  • The burden of a tax falls on the side of the market (buyers or sellers) from which it is collected.

  • The distribution of the burden of a tax is determined by the relative elasticities of supply and demand and is not determined by legislation.

  • The tax burden falls most heavily on the side of the market (buyers or sellers) that is most willing to leave the market when price movements are unfavourable to them.

Erklärung

Frage 60 von 60

1

For which of the following products would the burden of a tax likely fall more heavily on the sellers?

Wähle eine der folgenden:

  • clothing

  • food

  • housing

  • entertainment

Erklärung

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