Question 11

Use the following to answer questions 11.

Exhibit: Demand and Price Elasticity

PriceQuantity demanded per period

$2.500

2.2525

2.0050

1.7575

1.50100

1.25125

1.00150

0.75175

0.50200

(Exhibit: Demand and Price Elasticity 1) What is the price elasticity of demand between $2.50 and $2.25?

Group of answer choices

-19

-9

none of the above

indeterminate

Question 12

A product that has good substitutes is likely to have a higher price elasticity of demand than one that does not.

Group of answer choices

True

False

Question 13

Economists assume that consumers seek to maximize:

Group of answer choices

) utility.

profit.

time.

usefulness.

Question 14

The amount by which an additional unit of an activity increases total cost is:

Group of answer choices

marginal cost

marginal benefit

) net benefit

negative benefit

Question 15

If the price of popcorn is $0.50 per box and the price of peanuts is $0.25 per bag, and you have $10 to spend and decide to purchase 20 bags of peanuts, the maximum quantity of popcorn that you can purchase is _______ boxes.

Group of answer choices

10

12

16

8

Question 16

Which of the following is (are) correct?

Group of answer choices

Firms seek to maximize profits

All of the above are correct

Firms are organizations that produce goods and services

Firms seek to utilize factors of production in the most efficient way in order to maximize profits

Question 17

A factor of production whose quantity can be changed during a particular period is a:

Group of answer choices

variable factor of production

marginal factor of production

fixed factor of production

incremental factor of production

Question 18

Suppose that the first four units of a variable input generate corresponding total outputs per period of 200, 350, 450, and 500, respectively. The marginal product of the second unit of input is:

Group of answer choices

100

200

150

50

Question 19

"Diminishing marginal returns" means that:

Group of answer choices

each additional unit of an input used will increase output by larger and larger amounts.

each additional unit of an input used will increase output, but by smaller and smaller amounts.

each additional unit of an input used will decrease output.

the firm is maximizing profit.

Question 20

When an additional unit of a variable factor of production adds less to total product than the previous unit, the firm must be experiencing:

Group of answer choices

increasing returns

diminishing marginal returns

diminishing average returns

both B and C

Question 21

Perfect competition is a model of the market that assumes all of the following EXCEPT:

Group of answer choices

firms face downward-sloping demand curves

a large number of firms

firms produce identical goods

many buyers

Question 22

A perfectly competitive firm is a:

Group of answer choices

quantity taker

cost maximizer

price searcher

price taker

Question 23

Perfect competition is characterized by:

Group of answer choices

widely recognized brands

rivalry in advertising

fierce quality competition

the inability of any one firm to influence price

Question 24

A monopoly is likely to _______ and _______ than otherwise equivalent competitive firms.

Group of answer choices

produce less; charge more

produce less; charge less

produce more; charge more

produce more; charge less

Question 25

Conditions that prevent the entry of new firms in a monopoly market are:

Group of answer choices

barriers to entry

labor market stipulations

production controls

terms of sale