35. Which of the following has the highest price elasticity coefficient?

a. Rice c. Bread

b. Infant milk d. Ski boat

36. Demand for a product tends to be price INELASTIC if

a. The product is considered a luxury item

b. The population in the market areas is large

c. Few good complements for the product are available

d. People spend a large share of their income on the product

37. In the pharmaceutical industry where a diabetic must have insulin no matter the cost and where there is no other

substitute, the diabetic's demand curve is best described as

a. Perfectly elastic c. Elastic

b. Perfectly inelastic d. Inelastic

38. In which of the following situations would there be ELASTIC demand?

a. A 5% price increase results in a 4% increase in the quantity demanded

b. A 5% price increase results in a 4% decrease in the quantity demanded

c. A 4% price increase results in a 5% increase in the quantity demanded

d. A 4% price increase results in a 5% decrease in the quantity demanded

39. If the demand for a product is INELASTIC, then increasing the price of the product will

a. Increase total revenue c. Increase competition

b. Decrease total revenue d. Have no effect on total revenue

40. If the demand for a product is ELASTIC, what is the effect of a decrease in the price of the product?

a. No change in total revenue

b. An increase in total revenue

c. A decrease in total revenue

d. A decrease in total revenue and the demand curve shifts to the left

41. As a business owner, you have determined that the demand for your product is INELASTIC. Based upon this assessment,

you understand that

a. Increasing the price of the product will increase competition

b. Increasing the price of the product will increase total revenue

c. Decreasing the price of the product will increase total revenue

d. Increasing the price of the product will have no effect on total revenue

42. As the price for a product changes, the quantity of the product demanded changes based on the following schedule:

Total quantity demanded Price per unit

100 P 50

150 P 45

200 P 40

225 P 35

Using arc method, the price elasticity of demand for this product when the price decreases from P 50 to P 45 is:

a. 0.20 c. 0.10

b. 10.00 d. 3.80

43. In economics, personal income minus personal taxes equals

a. Net income c. Take home pay

b. Income after tax d. Disposable income

44. The marginal propensity to consume is calculated by

a. Dividing consumption by disposable income

b. Dividing disposable income by consumption

c. Dividing the change in disposable income by the change in consumption

d. Dividing the change in consumption by the change in disposable income

45. An individual receives an income of P 3,000 per month and spends P 2,500. An increase in income of P 500 per month

occurs, an individual spends P 2,800. What is the marginal propensity to save (MPS)?

a. 20% c. 60%

b. 40% d. 80%

COSTS of PRODUCTION

46. Marginal revenue is

a. Greater than price in pure competition

b. Equal to piece in monopolistic competition

c. The change in total revenue associated with increasing prices

d. The change in total revenue associated with producing and selling one more unit

47. Marginal cost is

a. The income foregone when the next best alternative is chosen

b. The additional cost of producing one additional item

c. The difference between relevant and sunk costs

d. A sunk cost

48. If the marginal profit is positive, as output increases

a. Total profit must increase c. Average profit must increase

b. Total profit must decrease d. Average and total profit must increase

49. If profit is to rise as output expands, then marginal profit must be

a. Falling c. Positive

b. Constant d. Rising

ANSWER NEEDED ASAP!!!!