An Increase In the price of a product will reduce the amount of it purchased because Multiple Choice 02:29:39 O the higher price will signal to consumers that the good is of low quality. O the higher price means that real Incomes have risen. O consumers will substitute other products for the one whose price has risen. O consumers substitute relatively high-priced for relatively low-priced products.2 The total revenue received by sellers of a good is computed by Multiple Choice 02.28:57 O multiplying the price times the quantity sold. O adding the price and the quantity sold. O multiplying the percentage change In price times the percentage change In quantity. O dividing the percentage change in quantity by the percentage change In price.3 Suppose you are given the following data on demand for a product. The price elasticity of demand (based on the midpoint formula) when price decreases from $8 to $7 Is Quantity Price Demanded $ 10 30 02.28:35 9 40 8 50 60 6 70 Multiple Choice O 0.73 O 0.14 O 1.38 O 1.43If the demand for product X Is Inelastic, an 8 percent decrease In the price of X will Multiple Choice 02:28:12 O decrease the quantity of X demanded by more than 8 percent. O decrease the quantity of X demanded by less than 8 percent. O Increase the quantity of X demanded by more than 8 percent. O Increase the quantity of X demanded by less than 8 percent.5 If the price elasticity of demand for a product Is 1.5, then a price cut from $3.00 to $2.70 will Multiple Choice 02:27:51 O Increase the quantity demanded by about 1.5 percent. O decrease the quantity demanded by about 1.5 percent. O Increase the quantity demanded by about 15 percent. O Increase the quantity demanded by about 30 percent.6 Answer the question based on the given supply and demand data for wheat. Bushels Demanded Price Per Bushels Supplied Per Month Bushel Per Month 45 $ 5 45 02:27:23 50 4 42 56 3 39 61 2 36 67 1 33 Equilibrium price In this market Is Multiple Choice O $5. O $4 O $3. O $27 Suppose product Y is an Input in the production of product Z. Product Z In turn is a substitute for product X. A decrease In the price of Y can be expected to Multiple Choice X 02:26:51 O decrease the demand for X. O Increase the demand for X. O have no effect on the demand of product X. O decrease the supply of X. O Increase the supply of X.8 The price of product X Is reduced from $90 to $80 and, as a result, the quantity demanded Increases from 100 to 120 units. Therefore, demand for X In this price range Multiple Choice 02:26:31 O has declined. O Is of unit elasticity. O Is Inelastic. O Is elastic.9 If the price elasticity of demand for a product is equal to 2.0, then a decrease In price of 4 percent will Increase quantity demanded by Multiple Choice 02:26:06 O 2 percent. O 0.8 percent. O 8 percent. O 0.5 percent.10 The law of demand states that, other things equal, Multiple Choice 02.25:42 O price and quantity demanded are Inversely related. O the larger the number of buyers In a market, the lower will be product price. O price and quantity demanded are directly related. O consumers will buy more of a product at high prices than at low prices.11 D2 X 02-25:18 0 (A) (B) 52 (C) Which of the diagrams illustrates the effect of an Increase in automobile worker wages on the market for automobiles? Multiple Choice O A only O B only O C only O D only12 Suppose the Income elasticity of demand for toys Is +2.0. This means that Multiple Choice 02:24:56 O a 10 percent Increase In Income will increase the purchase of toys by 20 percent. O a 10 percent Increase In Income will increase the purchase of toys by 2 percent. O a 10 percent Increase In income will decrease the purchase of toys by 2 percent. O toys are an Inferior good.13 Which of the following will cause a decrease In market equilibrium price and an Increase In equilibrium quantity? Multiple Choice X 02:24:36 O an Increase In supply O an Increase In demand O a decrease In supply O a decrease In demand14 The price elasticity of demand coefficient measures Multiple Choice 02.24:19 O buyer responsiveness to price changes. O the extent to which a demand curve shifts as Incomes change. O the slope of the demand curve. O how far business executives can stretch their fixed costs.15 If products A and B are complements and the price of B decreases, the Multiple Choice 02:24:01 O demand curves for both A and B will shift to the left. O amount of B purchased will Increase. but the demand curve for A will not shift. O demand for A will increase and the quantity of B demanded will Increase. O demand for A will decline and the demand for B will Increase.College students living off-campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start careers, their consumption of both goods frequently declines. This suggests that ramen noodles and boxed macaroni and 16 cheese are 8 02:23:41 Multiple Choice O Inferior goods. O normal goods. O complementary goods. O substitute goods.17 Supply $1.60- X 02-23:20 Price 1.00 .50- Demand 130 200 290 Quantity Refer to the diagram. The equilibrium price and quantity In this market will be Multiple Choice O $100 and 200. O $1.60 and 130. O $0.50 and 130. O $1.60 and 290.18 $2.00 D 02:22:59 $1.50 Price (per gallon) $1.00 0 20 27 28 30 35 Millions of Gallons of Milk Per Week Refer to the above diagram for the milk market. If the price were more than $1.50 per gallon, then there would be Multiple Choice O equilibrium In the market. O a shortage In the market. O a surplus In the market. O no buyers In the market.19 One can say with certainty that equilibrium price will decline when supply 02.22:43 Multiple Choice O and demand both decrease. O Increases and demand decreases. O decreases and demand Increases. O and demand both Increase.Surpluses drive market prices up; shortages drive them down. 20 True or False 02.22:25 True False