PLEASE I NEED HELP. Choose the correct answers.

1-The usual goal of rent control is

a.

to conduct social engineering via economic rules.

b.

to pander to real estate landlords by assuring them a low occupancy rate.

c.

to pander to the low income voters by assuring them enough living space.

d.

to assist the low income at a cost to society, in convenient, affordable housing.

e.

prices that allow rationing to the highest bidder.

2-Assume that the market for baked beans is in equilibrium. There is a sudden decrease in income throughout the economy. In this scenario, we would expect that if baked beans are a(n) ________ good, then the demand curve will shift to the ________, causing the equilibrium price and quantity to ________.

a.

inferior; left; fall

d.

normal; left; fall

b.

normal; right; rise

e.

normal; left; rise

c.

inferior; right; rise

3-When the price of orange juice decreases,

a.

the demand for orange juice decreases.

b.

the demand for orange juice increases.

c.

the demand curve for orange juice shifts.

d.

the quantity demanded for orange juice increases.

e.

the quantity demanded for orange juice decreases.

4-"Reducing the price of houses in the United States by 10 percent will raise the amount of houses sold by 20 percent" is an example of

1. positive economics.
2. normative economics.
3. the art of economics.
4. Classical economics.

5-For the Toyota Camry car market, if the price of a Toyota Camry rises from $20,000 to $22,000, quantity demanded for this car consequently drops from 7,500 to 6,000. The price elasticity of demand for the Toyota Camry is

a.

elastic.

b.

inelastic.

c.

unit elastic.

d.

None of the above.

6-The equation of a firm's marginal revenue curve is estimated to be P = 50 Q (quantity), and the equation of its marginal cost curve is estimated to be P = 10 + 3Q. The profit-maximizing price for this firm is

a.

$5.

d.

$50.

b.

$10.

e.

$40.

c.

$15.

7-You operate a monopolistically competitive firm and you notice that your company is making an economic profit. Which of the following is most likely to happen?

a.

Other firms in your industry will raise their prices.

b.

Other firms will enter your industry and your demand curve will shift left.

c.

Other firms will enter your industry and your demand curve will shift right.

d.

Your firm will be forced to exit the industry.

e.

Government regulators will investigate your firm for "excessive economic profit."

8-Anderson watches advertising that makes him want to consume Bugles, a corn snack, after he hears that, for Bugles, "more is better." Most people consider that all corn snack foods are not the same, and that Doritos and other corn snacks are not perfect substitutes for Bugles. Based on this information, we would most accurately say that this advertising probably caused

a.

Anderson's demand to be more elastic, and the corn snack industry is likely to be a monopolistically competitive industry.

b.

Anderson's demand to be less elastic, and the corn snack industry is likely to be a monopoly industry.

c.

the corn snack industry demand to be less elastic, and Anderson's demand was unaffected.

d.

the corn snack industry to become a monopoly, whereas prior to advertising, it was probably perfectly competitive.

e.

Anderson's demand to be less elastic, and the corn snack industry is likely to be a monopolistically competitive industry.

9-Many food retailers offer loyalty cards that track purchases and offer free items to customers after a certain threshold of purchases. Is this an example of price discrimination?

a.

Yes. The store is separating its customers based on how much they spend, and the free items represent a value to the customer that differs from that which is received by other types of patrons.

b.

Yes. Since the store is tracking purchases, it can offer individual customers discounted prices on items that are purchased most frequently.

c.

No. Since every customer has the option to receive a loyalty card, there is no differentiation in benefits received by customers.

d.

No. Since the rewards aren't a discount in price, it wouldn't qualify as price discrimination.

e.

No. Because the retailer might discontinue the card at any time, the customer may never receive the earned free items.

10-In the long run, the positive economic profits of Wings N Things, a monopolistic competitor, are

a.

not driven out because competition is not perfect.

b.

not driven out because the demand curve slopes downward.

c.

eliminated due to the entry of firms into the industry.

d.

eliminated due to the departure of firms from the industry.

e.

not driven out because firms cannot enter the industry.

11-Equilibrium price is $10 in a perfectly competitive market. For a perfectly competitive firm, MR = MC at 233 units of output. At 233 units, ATC is $12, and AVC is $9. The best policy for this firm is to __________ in the short run. Also, total fixed cost equals __________ for this firm.

a.

continue to produce; $3

b.

shut down; $699

c.

continue to produce; $699

d.

shut down; $2,796

e.

continue to produce; $2,796

12Kathleen owns a photography business in Mobile, Alabama. The market for photography is very competitive. At Kathleen's current production level, her marginal cost is $15 and her marginal revenue is $12. In order to maximize profits, Kathleen should:

a. decrease production.

b. keep production the same.

c. increase the price.

d. decease the price.

e. increase production.

13-Dine-in restaurants typically have their lowest business volume on Monday and Tuesday nights. Besides appealing to consumers on a budget, how might a restaurant benefit from charging discounted prices on these nights?

a.

Demand on these nights will increase to the point where the restaurant can remove the price discounts.

b.

Profits on these nights will surge, allowing the restaurant to close during other nights of the week.

c.

By creating an incentive for consumers, a restaurant is able to capture revenue that it wouldn't otherwise.

d.

Price discrimination is always successful, so a restaurant can turn an unprofitable situation into a profitable one.

e.

Customers on a budget tend to tip their servers better, increasing the supply of staff willing to work on these nights.

14Willow Park is a small community in Texas with only one gas station. The price of gasoline in Willow Park most likely

a.

never changes.

b.

is lower than in the big cities in Texas.

c.

is determined by competitive market forces.

d.

is higher than in the big cities in Texas.

e.

produces a surplus of gasoline.

15-Gasoline and ethanol are substitute fuels. If the government increases taxes on gasoline, this will cause a(n) ________ in deadweight loss in the market for gasoline and a(n) ________.

a.

decrease; increase in the price of ethanol

b.

increase; decrease in demand for ethanol

c.

increase; increase in the price of ethanol

d.

decrease; increase in demand for ethanol

e.

increase; decrease in the price of ethanol

16-Firms will always make a positive economic profit if the price they charge is:

a. less than their average total cost (ATC).

b. less than their average variable cost (AVC).

c. greater than their average variable cost (AVC).

d. greater than their average total cost (ATC).

e. equal to their average total cost (ATC).

17-steel will cost less than trying to modernize its facility to compete with foreign steel prices. Sandra's Steel Mill will

a.

decide that lobbying is wrong and modernize its facility.

b.

participate in rent seeking and lobby Congress for the tariff.

c.

lobby Congress for the tariff and modernize its facility.

d.

produce more steel to attract more customers.

e.

lower its price to compete with the imported foreign steel.

19-

If ABC Corporation decides to raise its inputs for making calculators by 20 percent, then its output level for making calculators has doubled and rises by 40 percent because they used better technology and more specialized and experienced workers to make the calculators. Thus, average total cost has fallen from $20 to $10 while the output of calculators has risen from 300 units to 600 units. Based on this information, what scale of production is ABC Corporation experiencing?

a. economies of scale

b. diseconomies of scale

c. constant returns to scale

d. none of the above

20-Consider the following data: equilibrium price = $9, quantity of output produced = 100 units, average total cost = $8, and average variable cost $6. Given this information, total revenue is __________, total cost is __________, and fixed cost is __________.

a. $600; $800; $100

b. $900; $700; $800

c. $900; $800; $200

d. $900; $800; $600

e. none of the above