Econ-3310

1.Which of the following situations would cause an increase in demand in the market for sunglasses?

a.The price of sunglasses falls

b. There is a technological improvement in the process to produce sunglasses

2.Suppose a 5.7% decrease in the price of jalapenos leads to a 0.2% decrease in the quantity supplied of jalapenos. The quantity demanded of tomatoes increases by 3.3%. What is the Price Elasticity of Supply for jalapenos?

a. 0.035

b. 0.579

c. 28.5

d. There is not enough information to calculate the Price Elasticity of Supply

3.You're dreaming of what to do while stuck at home. You could wash the dishes which you would pay someone $15 to do for you. You could play Minecraft which you value at $29. You could also take a nap and ignore everyone and everything else which you would pay $32 to do. If you to take a nap, what is your opportunity cost?

a. $ 15

b. $ 29

c. $ 32

d. $ 44

4.If people expect the price of bottled water to decrease next week, what happens to the demand for bottled water this week?

Group of answer choices

a. Demand decreases

b. Demand increases

c. Demand does not change

d. Not enough information to determine

5.If Maryam prefers (3 books, 10 articles) to (6 books, 7 articles) and prefers (6 books, 7 articles) to (8 books, 5 articles), what does Transitivity require of her preferences?

A. Maryam prefers (3 books, 10 articles) to (8 books, 5 articles)

B. Maryam prefers (8 books, 5 articles) to (3 books, 10 articles)

C. Maryam prefers (6 books, 7 articles) to (3 books, 10 articles)

D. Maryam is indifferent between (3 books, 10 articles) and (8 books, 5 articles)

6.In the market for space heaters, the equilibrium price increases, and the equilibrium quantity increases. Which of the following situations would cause that effect?

A.The number of companies selling space heaters decreases

B.There is an advancement in the technology used to produce space heaters

C.Space heaters are a Normal good, and people's incomes increase

D.The price of blankets, a substitute for space heaters, decreases

7.Which of the following situations would cause a decrease in supply in the market for wool blankets?

A.The price of wool blankets decreases

B.The number of wool blanket producers of increases

C.Wool blankets are a substitute for space heaters and the price of space heaters decreases

D.The price of wool used to make wool blankets increases

8.The Price Elasticity of Demand for a good is 0.12. Which of the following describes the Price Elasticity of Demand?

A. Elastic

B. Inelastic

C. Unit elastic

D . Perfectly elastic

9.Which of the following would cause an increase in supply in the market for hats?

A.The price of sunglasses, a substitute good, increases

B.The price of cotton, an input used to make hats, increases

C.The price of hats increases

D.The number of hat manufacturing firms increases

10.The price of hazelnut spread, a substitute for peanut butter, increases. What happens in the market for peanut butter?

A.Demand increases

B.Demand decreases

C.Supply increases

D.Supply decreases

11.In the housing market, demand increases and supply decreases. If you know nothing else about happens in the housing market, what would you predict would happen to the equilibrium price?

A.The equilibrium price increases

B.The equilibrium price decreases

C.The equilibrium price stays the same

D.There is not enough information to determine how the equilibrium price will change

12.In the market for textbooks, the price elasticity of demand is 0.24. If the price of textbooks increases by 20%, what is the percent change in the quantity demanded?

A.83.33%

B.4.8%

C.19.76%

D.Not enough information to determine

13.In the market for jackets, the equilibrium price increases, but the equilibrium quantity decreases. Which of the following situations would cause that effect?

A. The price of wool used to make jackets decreases

B. The number of people wearing jackets increases

C. The number of sellers of jackets decreases

D. Jackets are a Normal Good, and people's incomes increase

14.Suppose the demand function is QD = 42.7 - 1.5P, and the supply function is QS = 0.5P - 7.3. What is the market clearing price?

A. $1.50

B. $2.00

C. $25.00

D. $28.47

15.Suppose when a person's income increases, his or her demand for video games increases. What does this indicate for video games?

A.Video games are a Normal good

B.Video games are an Inferior good

C.Video games are a Complement

D.Video games are a Substitute

16.The price of eggs, a necessary ingredient to make ice cream, increases. What happens in the market for ice cream?

A.Demand increases

B.Demand decreases

C.Supply increases

D. Supply decreases

17.The Price Elasticity of Demand for a good is 2.18. Which of the following describes the Price Elasticity of Demand?

A.Elastic

B.Inelastic

C.Unit elastic

D.Perfectly elastic

18.What is the impact of a Price Ceiling on Consumer Surplus?

A. A Price Ceiling decreases Consumer Surplus

B. A Price Ceiling increases Consumer Surplus

C. A Price Ceiling has no impact on Consumer Surplus

D. The impact of a Price Ceiling on Consumer Surplus is ambiguous

19.Suppose when a person's income increases, his or her demand for used cars decreases. What is the relationship between used cars and income?

A.Used cars are a Normal good

B.Used cars are an Inferior good

C.Used Cars are a Complement

D. Used Cars are unaffected by changes in income

20.Suppose a farmers' market is debating the implementation of a price floor for tomatoes because of low prices. The farmers' market proposes a price floor of $0.59. Furthermore, suppose the equilibrium price in the market is $0.23. If the farmers' market implements the proposed price floor, what will be the effect on the market?

A.The price floor will create shortage of tomatoes

B.The price floor will create surplus of tomatoes

C.The price floor will have no effect on the market for tomatoes at the farmers' market

D.The price floor will shift demand to the left

21.Suppose the demand function is QD = 30,200 - 2,000P, and the supply function is QS = 6,000P - 1,800. What is the equilibrium quantity?

A.1,800

B.22,200

C.30,200

D.36,200

22.Which of the following would cause a decrease in demand in the market for airline flights?

A.The price of airline flight tickets increases

B.The price of aviation fuel, need to fly airline flights, increases

C.The price of hotels, a complementary good, increases

D.The government levies a tax on airline flights

23.In the market for chicken, the number of chicken producers decreases. At the same time, the price of beef, a substitute for chicken, increases. What would you predict happens to the equilibrium price and quantity in the market for chicken?

A.The equilibrium price increases, and the change in equilibrium quantity is ambiguous

B.The change in equilibrium price is ambiguous, and the equilibrium quantity increases

C.The equilibrium price decreases, and the change in equilibrium quantity is ambiguous

D.The change in equilibrium price is ambiguous, and the equilibrium quantity decreases

24.If the income elasticity of a good is 1.08, what does that indicate?

A.The good is a Normal good

B.The good is an Inferior good

C.The price elasticity of demand for the good is elastic

D.The good satisfies the Law of Demand

25.Suppose government policy increases people's income by 10.1%. As a result, the quantity demanded for restaurant meals increases by 5.4%. At the same time, the quantity demanded for sourdough bread decreases by 1.1%. What is the income elasticity for restaurant meals?

A. 11.11

B. 0.53

C. 1.87

D. 4.7

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