7. Supply curves tend to be 2 A. perfectly elastic in the long run because consumer demand will have sufficient time to adjust fully to changes in supply. industry. B. more elastic in the long run because there is time for firms to enter or leave the on production. C. perfectly in elastic in the long run because the law of scarcity imposes absolute limits D. less elastic in the long run because there is time for firms to enter or leave an industry. With reference to cross elasticity of demand, which of the following statement is correct? A. cross elasticity zero or near zero suggests that two goods are unrelated B. if X and Y are substitutes cross elasticity of demand is negative C. the larger the negative cross elasticity coefficient the less complementarity there is between the products D. for inferior goods demand increases as income increases 9. With reference to the law of diminished marginal utility, which of the following statement is correct? A. marginal additions decline to provide the same satisfaction. B. when marginal utility becomes negative the producer of the product will sale more products. F C. price should be reduced to increase demand. D. price should remain unchanged to maintain the same demand. 10. Marginal utility is the: A. sensitivity of consumer purchases of a good to changes in the price of that good. B. change in total utility obtained by consuming another unit of a good divided by the change in the price of that good. C. total utility associated with the consumption of a certain number of units of a good divided by the number of units consumed. D. change in total utility obtained by consuming one more unit of a good. 11. With reference to "indifference curve", which of the following statement is correct? A. provides the purchaser with reasons to choose a certain combination of goods. B. shows all the combination of the two products (a and b) that will yield the same total satisfaction (total utility) to the consumer. C. indifference curve reflects objective information about consumer preferences for one product (a) rather than another (b). D. indifference map is a set of indifference curves where the curves closest to the origin indicate higher level of total utility. 12. Behavioral economists focus on the mental process behind decision making because: A. people for the most part are rational. B. the market governs economic behavior. C. the government has too many regulations and laws. D. it should allow economists to make better predictions about behavior
