QUIZ ECON 100

Question 1 25 pts An inferior good is defined as which of the following? A good for which demand Increases and consumer Income decreases Q A good for which demand Increases and consumer Income Increases O A good for which demand Is based on quality Q A good for which demand Is based solely on price Question 2 25 pts Which of the following best ilustrates the law of demand? O a. Increased purchases of Big Macs as the price of Bly Macs decrease Q b. The price of Big Macs Increasing, causing consumers to buy more Whoppers O c. An Increase In Income, resulting In Increased purchases of Big Macs d. An Increase In Income, resulting In decreased purchases of French fries D Question 3 25 pts If, during economic prosperity, the demand for Good A decreases and the demand for good B increases, then which of the following is true? O Good A and Good B are substitutes. Good Als a normal good, and Good B Is an Inferior good O Good A and Good B are complements Good Als an Inferior good, and Good B Is a normal good Question 4 25 pts The law of demand cannot be described by which of the following? O Production A graphic representation O A demand schedule Q WordsQuestion 5 25 pts The law of demand states that, as the price of the good increases,_ O quantity demanded Increases Q demand Increases quantity demanded decreases @ demand decreases Question 6 25 pts Which of the following is true of a demand curve? O It Is the equivalent of the production possibilities curve. It reflects the Inverse relationship between price and quantity demanded. O It has a pooltive slope. It reflects the direct relationship of price and quantity demanded. Question 7 25 pts How is a normal good defined? O As a good for which price Is the only consideration Q As a good for which an Increase In consumer Income reduces demand for that good " As a good for which an Increase In price Increases Its demand As a good for which an Increase In consumer Income Increases the demand for that good Question 8 25 pts What does it mean in a market if the demand curve shifts to the left? O Demand has Increased. Q Supply has Increased. Quantity supplied has decreased. Market price has Increased.Question 9 25 pts A change in tastes will do which of the following? Shift the demand curve to the right Q Shift the demand curve Q Lead to more uniform goods being produced O Result In healthier choices Question 10 25 pts Which of the following is true of the movement along a demand curve? O d. Changes In price on quantity demanded do not take the form of a movement along the demand curve. Q c. Changes In Income do not take the form of a movement along the demand curve. @ a. The effect of a change In price on quantity demanded takes the form of a movement along the demand CURVE. ( b. The shift of any lother) variables does not constitute movement along a demand curve. Question 11 2.5 pts What is a change in demand? O The shift of the demand curve It Is caused by price. The Increase In utility The movement along a demand curve Question 12 25 pts Which of the following is true of substitute goods? O Substitute goods are goods where an Increase In the price of one good causes a decrease In the demand for both goods Demand for a good Is unaffected by the number of substitutes available. Substitute goods are goods where an Increase In the price of one good causes an Increase In the demand for the other good. () Al goods have many substitutes.D Question 13 25 pts What are complementary goods? O Complements are goods where each is the substitute for the other. Q Complements are goods for which an Increase In the price of one of the goods results In a decrease In the demand for the other. O Complements are goods for which a decrease In the price of one of the goods results In a decrease In the demand for both goods Complements are goods for which an Increase In the price of one of the goods results In an Increase In the demand for that good. D Question 14 2.5 pts If cheese, an ingredient in cheeseburgers, increases in price, what would we expect? O The demand curve for hamburgers to shift to the right O The supply curve for hamburgers to shift to the left O The demand curve for hamburgers to shift to the left The supply curve for hamburgers to shift to the right D Question 15 25 pts If there is an improvement in production technology for a good, what would we expect to see? O A decrease In quantity supplied An Increase In quantity supplied Q A decrease In supply An Increase In supply D Question 16 25 pts If the production possibilities frontier shifts outward, which of the following is not affected? O Emclency Q Output O Supply TastesD Question 17 25 pts Which of the following is true of substitute goods? O All goods have many substitutes. Substitute goods are goods where an Increase In the price of one good causes an Increase In the demand for the other good. O Substitute goods are goods where an Increase In the price of one good causes a decrease In the demand for both goods Q Demand for a good Is unaffected by the number of substitutes available. D Question 18 25 pts The production possibilities curve can help explain which of the following? O A three-good model The law of demand Opportunity costs and the supply curve O The price structure of goods D Question 19 25 pts Which of the following will occur if there is an increase in the wages of workers in the pork industry? O A decrease In the demand for pork Q A decrease In the supply of pork Q An Increase In the supply of pork An Increase In the demand for pork D Question 20 25 pts A change in technology in the widgets industry does not affect which of the following? O The position of the supply curve for widgets The production of widget O The position of the demand curve for widgets O The production possibilities curveD Question 21 25 pts The demand for gummy bears is elastic. Which of the following is true? O If the price of gummy bears decreases, then fewer gummy bears will be bought. O If the price of gummy bears decreases, then more money will be spent on gummy bears. O If the price of gummy bears Increases, then more gummy bears will be bought. If the price of gummy bears Increases, then more money will be spent on gummy bears. D Question 22 2.5 pts Which one of the following statements is not true? O Price decreases for a good whose demand is elastic, so we should conclude revenue will Increase. C) Revenue Increases for a good with an Inelastic demand, so we can conclude that the price must have risen. Q If demand Is elastic, then an Increase In price will result In a decrease In revenue. With an Inelastic demand and an observed decrease In revenue, we should conclude that price must have Increased. D Question 23 25 pts An advertising campaign for Rita's Rhubarb Pies convinces consumers that the pies of competitors are poor substitutes. For Rita's pies, we would expect price elasticity to and cross elasticity with competitors to O decrease; decrease Increase; Increase Increase; decrease @ decrease; Increase D Question 24 25 pts Price elasticity of demand is zero. This means that, in a market equilibrium, quantity is determined by which of the following? O Both demand and supply Only demand 0 Only supply Mainly demand, but partly by supplyQuestion 25 25 pts Good A and Good B have negative income elasticities, but Good A is more negative then Good B. If the economy's income increases, which of the following is true? O Good A's demand will decrease more than Good B's demand curve. Q) Good A's demand will decrease less than Good B's demand curve. O Good A's demand will Increase more than Good B's demand curve. Good A's demand will Increase less than Good B's demand curve. Good A's demand will Increase less than Good B's demand curve. Question 26 25 pts The price of car batteries increases by 10 percent and the quantity demanded decreases by 10 percent. What is the price elasticity of car batteries? O Elastic, and revenue will decrease Q Inelastic, and revenue will Increase O Elastic, and revenue will Increase Unit elastic, and revenue will not change Question 27 25 pts Which of the following is not true about income elasticity of demand? Q It Is negative for an Inferior good. It is pooltive for a normal good. The greater the positive value, the greater the change In demand when Income changes. The greater the positive value, the greater the change In demand when income changes. It is equal for two goods that are substitutes. Question 28 25 pts The capacity of the stadium for the local baseball team, the Uretown Yokels, is fixed. What does this mean about the price of tickets? O They are determined entirely by demand. O They are determined entirely by supply. They are determined by a combination of demand and supply. O They are mainly determined by supply.D Question 29 25 pts The more sensitive quantity supplied is to price changes for a given increase in price, which of the following is true? The flatter the supply curve will be O The less the curve will shift to the right The more the curve will shift to the right The steeper the supply curve will be D Question 30 25 pts The availability of substitutes - price elasticity of demand and the availability of complements. price elasticity of demand. decreases; decreases Q Increases; Increases Increases; decreases O decreases, Increases D Question 31 25 pts A good has a price elasticity of demand of 2.0. You would correctly interpret this to mean which of the following? Q A 10 percent Increase In price would lead to a 20 percent Increase In quantity demanded. O A 10 percent Increase In price would lead to a 3 percent decrease In quantity demanded. Q A 10 percent Increase In price would lead to a 3 percent Increase In quantity demanded. A 10 percent Increase In price would lead to a 20 percent decrease In quantity demanded D Question 32 25 pts if the supply of widgets is price-elastic, then a 10 percent increase in the price of widgets will cause which of the following? Increase the quantity supplied by more than 10 percent O Increase the quantity supplied by less than 10 percent Q Shift the supply curve to the right by less than 10 percent shift the supply curve to the right by more than 10 percentD Question 33 25 pts Assume that the demand for unskilled workers is inelastic. What will the imposition of an effective minimum wage do? O Decrease total Income of minimum wage earners and, as time passes, decrease unemployment O . Decrease total Income of minimum wage camers and, as time passes, Increase unemployment Increase total Income of minimum wage earners and, as time passes, decrease unemployment Increase total Income of minimum wage earners and, as time passes, Increase unemployment D Question 34 25 pts If the cross-elasticity of demand for Good Q with respect to Good Z is -1.9, then the goods are O Inderlor goods O substitutes complements normal goods D Question 35 25 pts At the farmer's market, Jan sells bags of apples. When she decreases the price, she attracts more customers. What can we conclude? Q Demand Is Inelastic O Demand Is elastic and Jan's revenue will Increase. We have Insufficient Information to make any statements about elasticity. O Demand Is elastic D Question 36 25 pts If 0.95 is the cross elasticity of demand for Good F with respect to Good X, which of the following is true? Q) Good F Is a normal good. O Good F Is an Inferior good. O Good F Is a complement to Good X. O Good F Is a substitute to Good X.D Question 37 25 pts The income elasticity of demand for pork is -0.2. If income increases by 10 percent, what will happen to the demand for pork? It will Increase by 2 percent. O It will decrease by 2 percent. It will Increase by 20 percent O It will decrease by 20 percent D Question 38 25 pts If a product has a price elasticity of demand of 0.8, then what is the product's demand? Elastic O Unit elastic Q It cannot be determined. Q Inelastic D Question 39 25 pts A demand curve is a straight line sloping downwards at an angle of 45 degrees. We can conclude that its price elasticity is Q variable 0 1.0 0 0.5 O constant D Question 40 2 5 pts The price elasticity of orange juice in Alaska is 4.0, whereas in Florida it is 1 5. Demand in Alaska is -.. whereas demand in Florida is ( Inelastic; Inelastic O elastic, Inelastic Inclastic; clastic O elastic, elastic