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

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Hell on Earth (Quizzes #2 & #3 [Chapters 1-3, 4-6, 13-17-18, 23-24]) Economics [Teacher: Abdinova Makpal ; Final Exam + Quizzes] ▼ Test sobre Quiz #2/3 [MCQ | Chapter 4-6], creado por Good Guy Beket el 02/12/2018.
Good Guy Beket
Test por Good Guy Beket, actualizado hace más de 1 año
Good Guy Beket
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Pregunta 1

Pregunta
A perfectly competitive market has
Respuesta
  • firms that set their own prices.
  • only one seller.
  • at least a few sellers.
  • many buyers and sellers.
  • none of these answers.

Pregunta 2

Pregunta
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:
Respuesta
  • complements.
  • inferior goods.
  • normal goods.
  • none of these answers.
  • substitutes.

Pregunta 3

Pregunta
The law of demand states that an increase in the price of a good
Respuesta
  • 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.

Pregunta 4

Pregunta
The law of supply states that an increase in the price of a good
Respuesta
  • 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.

Pregunta 5

Pregunta
If an increase in consumer incomes leads to a decrease in the demand for camping equipment, then camping equipment is
Respuesta
  • a normal good.
  • none of these answers.
  • an inferior good.
  • a substitute good.
  • a complementary good.

Pregunta 6

Pregunta
A monopolistic market has
Respuesta
  • many buyers and sellers.
  • none of these answers.
  • firms that are price takers.
  • only one seller.
  • at least a few sellers.

Pregunta 7

Pregunta
Which of the following shifts the demand for watches to the right?
Respuesta
  • 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

Pregunta 8

Pregunta
All of the following shift the supply of watches to the right except
Respuesta
  • 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.

Pregunta 9

Pregunta
If the price of a good is above the equilibrium price,
Respuesta
  • 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.

Pregunta 10

Pregunta
If the price of a good is below the equilibrium price,
Respuesta
  • 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.

Pregunta 11

Pregunta
If the price of a good is equal to the equilibrium price,
Respuesta
  • 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.

Pregunta 12

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

Pregunta 13

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

Pregunta 14

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

Pregunta 15

Pregunta
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
Respuesta
  • 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.

Pregunta 16

Pregunta
Which of the following statements is true about the impact of an increase in the price of lettuce?
Respuesta
  • 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.

Pregunta 17

Pregunta
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?
Respuesta
  • 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.

Pregunta 18

Pregunta
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?
Respuesta
  • 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.

Pregunta 19

Pregunta
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?
Respuesta
  • 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.

Pregunta 20

Pregunta
An inferior good is one for which an increase in income causes a(n)
Respuesta
  • decrease in supply.
  • increase in demand.
  • increase in supply.
  • decrease in demand.

Pregunta 21

Pregunta
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
Respuesta
  • income inelastic.
  • price inelastic.
  • price elastic.
  • unit price elastic.
  • income elastic.

Pregunta 22

Pregunta
The price elasticity of demand is defined as
Respuesta
  • 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.

Pregunta 23

Pregunta
In general, a flatter demand curve is more likely to be
Respuesta
  • price elastic.
  • unit price elastic.
  • none of these answers.
  • price inelastic.

Pregunta 24

Pregunta
In general, a steeper supply curve is more likely to be
Respuesta
  • price elastic.
  • none of these answers.
  • unit price elastic.
  • price inelastic.

Pregunta 25

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

Pregunta 26

Pregunta
The demand for which of the following is likely to be the most price inelastic?
Respuesta
  • transportation
  • taxi rides
  • bus tickets
  • airline tickets

Pregunta 27

Pregunta
If the cross-price elasticity between two goods is negative, the two goods are likely to be
Respuesta
  • substitutes.
  • complements.
  • necessities.
  • luxuries.

Pregunta 28

Pregunta
If a supply curve for a good is price elastic, then
Respuesta
  • 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.

Pregunta 29

Pregunta
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
Respuesta
  • zero.
  • infinite.
  • one.
  • unable to be determined from this information.

Pregunta 30

Pregunta
A decrease in supply (shift to the left) will increase total revenue in that market if
Respuesta
  • demand is price inelastic.
  • supply is price elastic.
  • supply is price inelastic.
  • demand is price elastic.

Pregunta 31

Pregunta
If an increase in the price of a good has no impact on the total revenue in that market, demand must be
Respuesta
  • all of these answers.
  • price inelastic.
  • unit price elastic.
  • price elastic.

Pregunta 32

Pregunta
If consumers always spend 15 percent of their income on food, then the income elasticity of demand for food is
Respuesta
  • 1.50.
  • 1.15.
  • none of these answers.
  • 0.15.
  • 1.00.

Pregunta 33

Pregunta
Technological improvements in agriculture that shift the supply of agricultural commodities to the right tend to
Respuesta
  • 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.

Pregunta 34

Pregunta
If supply is price inelastic, the value of the price elasticity of supply must be
Respuesta
  • infinite.
  • zero.
  • less than 1.
  • none of these answers.
  • greater than 1.

Pregunta 35

Pregunta
If there is excess capacity in a production facility, it is likely that the firm's supply curve is
Respuesta
  • price inelastic.
  • none of these answers.
  • unit price elastic.
  • price elastic.

Pregunta 36

Pregunta
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?
Respuesta
  • 1.4
  • 0.66
  • 0.75
  • 2.0
  • 1.0

Pregunta 37

Pregunta
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?
Respuesta
  • €0 per month
  • €30 per month
  • €40 per month
  • Either €30 or €40 per month because the price elasticity of demand is 1.0.

Pregunta 38

Pregunta
If demand is linear (a straight line), then price elasticity of demand is
Respuesta
  • 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.

Pregunta 39

Pregunta
If the income elasticity of demand for a good is negative, it must be
Respuesta
  • an elastic good.
  • an inferior good.
  • a normal good.
  • a luxury good.

Pregunta 40

Pregunta
If consumers think that there are very few substitutes for a good, then
Respuesta
  • 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.

Pregunta 41

Pregunta
For a price ceiling to be a binding constraint on the market, the government must set it
Respuesta
  • above the equilibrium price.
  • below the equilibrium price.
  • precisely at the equilibrium price.
  • at any price because all price ceilings are binding constraints.

Pregunta 42

Pregunta
A binding price ceiling creates
Respuesta
  • 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.

Pregunta 43

Pregunta
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?
Respuesta
  • 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.

Pregunta 44

Pregunta
A price floor
Respuesta
  • 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.

Pregunta 45

Pregunta
Which of the following statements about a binding price ceiling is true?
Respuesta
  • 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.

Pregunta 46

Pregunta
Which side of the market is more likely to lobby government for a price floor?
Respuesta
  • the buyers
  • Neither buyers nor sellers desire a price floor.
  • the sellers
  • Both buyers and sellers desire a price floor.

Pregunta 47

Pregunta
The surplus caused by a binding price floor will be greatest if
Respuesta
  • 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.

Pregunta 48

Pregunta
Which of the following is an example of a price floor?
Respuesta
  • 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.

Pregunta 49

Pregunta
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?
Respuesta
  • 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.

Pregunta 50

Pregunta
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?
Respuesta
  • 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.

Pregunta 51

Pregunta
Within the supply and demand model, a tax collected from the buyers of a good shifts the
Respuesta
  • 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.

Pregunta 52

Pregunta
Within the supply and demand model, a tax collected from the sellers of a good shifts the
Respuesta
  • 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.

Pregunta 53

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

Pregunta 54

Pregunta
When a tax is collected from the buyers in a market,
Respuesta
  • 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.

Pregunta 55

Pregunta
A tax of €1.00 per litre on petrol
Respuesta
  • 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.

Pregunta 56

Pregunta
The burden of a tax falls more heavily on the sellers in a market when
Respuesta
  • 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.

Pregunta 57

Pregunta
A tax placed on a good that is a necessity for consumers will likely generate a tax burden that
Respuesta
  • falls more heavily on sellers.
  • falls entirely on sellers.
  • falls more heavily on buyers.
  • is evenly distributed between buyers and sellers.

Pregunta 58

Pregunta
The burden of a tax falls more heavily on the buyers in a market when
Respuesta
  • 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.

Pregunta 59

Pregunta
Which of the following statements about the burden of a tax is correct?
Respuesta
  • 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.

Pregunta 60

Pregunta
For which of the following products would the burden of a tax likely fall more heavily on the sellers?
Respuesta
  • clothing
  • food
  • housing
  • entertainment
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