The price system

Descrição

Quiz sobre The price system, criado por amy.lee1989 em 16-10-2014.
amy.lee1989
Quiz por amy.lee1989, atualizado more than 1 year ago
amy.lee1989
Criado por amy.lee1989 aproximadamente 10 anos atrás
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Resumo de Recurso

Questão 1

Questão
What is the defining characteristic of a normal good?
Responda
  • An increase in income leads to an increase in quantity demanded
  • The price elasticity of demand is greater than unity
  • The income effect of a fall in price is negative
  • The substitution effect of a fall in price is positive

Questão 2

Questão
Given that potatoes are an inferior good, what will cause an increase in the price of potatoes?
Responda
  • a decrease in advertising expediture
  • a failure of the potato harvest
  • an increase in subsidies to potato growers
  • an increase in the income of consumers

Questão 3

Questão
What will make it more difficult for an industry to react quickly to an increase in market demand?
Responda
  • There is a high level of unemployment
  • The industry employs highly skilled workers
  • There is a high degree of substitutability between capital and labour
  • There are no close substitutes for the industry's product

Questão 4

Questão
In which of the following situation is the demand for a product said to be price elastic?
Responda
  • The quantity demanded responds to a change in price
  • An increase in price brings about a decrease in the quantity demanded
  • An in crease in price induces consumers to spend more on the product
  • A decrease in price brings about an increase in revenue

Questão 5

Questão
A silversmith sells 100 sets of earrings per week at a price of $5. As a direct result of a price increase to $6, the total revenue from sales rises by 8%. Within which range does price elasticity of demand lie?
Responda
  • under 0.4
  • greater than 0.4 and less than 0.8
  • greater than 0.8 and less than 1.2
  • over 1.2

Questão 6

Questão
The demand for a commodity is perfectly elastic. A firm producing this commodity currently sells 100 units at $5 each. What will be the revenue obtained by the firm, if it increases its price to $6?
Responda
  • 0
  • $400
  • $500
  • $600

Questão 7

Questão
If pizza and soda are complements, we can conclude that
Responda
  • the cross-elasticity of demand is positive
  • the cross-elasticity of demand is negative
  • the income elasticity of demand is negative
  • the income elasticity of demand is positive

Questão 8

Questão
The price of a product in creases from $12 to $20 and the quantity demanded falls from 55 to 45. What is the PED?
Responda
  • 0.4
  • 2.5
  • -0.4
  • -2.5

Questão 9

Questão
Which of the following is not a factors affecting the elasticity of supply?
Responda
  • ability to stock pile
  • ability to increase output
  • Number of close substitutes
  • spare capacity

Questão 10

Questão
If total revenue remains constant after price is increased, demand is _______
Responda
  • perfectly inelastic
  • perfectly elastic
  • inelastic
  • unitary elastic

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