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6. Suppose Jimmy John's lowers the prices of their sandwiches, At the same time, because of robberies of pizza delivery personnel, insurance premiums to cover these employees rise significantly. What do you expect to happen to the equilibrium price and quantity of delivered pizzas? a. Price and quantity will increase. b. Price will increase but quantity will decrease. c. Price may increase or decrease, but quantity will decrease. d. Price and quantity will decrease. 2 7. If the absolute value of the own price elasticity of gasoline is 0.94, a decrease in price will lead to: a: a reduction in total revenue. b. an increase in total revenue. c. no change in total revenue, d. None of the preceding statements is correct. 8. We would expect the demand for Nike sneakers to be a. less clastic than the demand for sneakers. b. more elastic than the demand for sneakers. c. the same as the demand for sneakers. d. Without additional information, we can't determine anything about the clasticity of Nike sneakers. 9. Jill and Jack are in the checkout line at WalMart, Jill has 3 PiGiorno pizzas and 3 bottles Yellow Tail Chardonnay. Jack has 2 DiGioguo, pizzas and 4 bottles Yellow Tail Chardonnay, Which of the following statements is correct? a. Jack's MRS of wine for pizza is twice that of Jill's. b. Jack's marginal utility of wine is twice his marginal utility of pizza. c. Jill likes wine and pizza equally well. d. Jack's MRS of wine for pizza is the same as Jill's. e. none of the statements associated with this question are correct. 10. At the current consumption bundle Kermit is spending all his income. At this bundle the slope of the indifference curve is flatter than the slope of the budget line, and X is on the horizontal axis a. Kermit is willing to give up more of good Y to get an additional unit of good X than is necessary under the current market prices. b. For Kermit, MUx > MUy c. For Kermit MRS > Px /Pv. d. For Kermit MRS - - Px /Pv. c. Kermit is willing to give up more of good X to get an additional unit of good Y than is necessary under the current market prices. 11. Scarce resources are ultimately allocated toward the production of goods most wanted by society because: a, they are most efficiently utilized in these areas. b. consumers demand inexpensive goods and services. C. of consumer-producer rivalry. d. managers are benevolent. 12. Which of the following statements is incorrect? a. Accounting profits generally are larger than economic profits. b. Accounting profits do not take opportunity cost into account. c. Economic costs include not only the accounting costs but also the opportunity costs of the resources used in production. d. Managers should primarily be interested in accounting profits for day-to-day decision making. 13. Which of the following can explain a decrease in the demand for housing (a normal good ? a rise in housing prices. b, a decrease in the population. c. an improvement in technology d. A rise in the average rent for apartments. 14. Suppose a consumer is presently in equilibrium choosing some combination of goods X and Y. If good X costs half as much as good Y, them: a. The consumer must purchase half as much Y as X. b. The marginal utility of good Y must be twice as high as the marginal utility of good X. c. The consumer must purchase half as much Kas Y- d Commodity X must provide at least half as much utility as commodity Y. 15. The property that rules out indifference curves that cross is a completeness. b transitinity. c, diminishing marginal rate of substitution. d. independence
