Quiz

Question 1 (1 point)

If consumer purchases of a good are not very sensitive to the price of the good, then the

Question 1 options:

a)

supply curve is relatively flat.

b)

demand curve is relatively flat.

c)

demand curve is relatively steep.

d)

supply curve is relatively steep.

Question 2 (1 point)

The price elasticity of demand tends to be large (more elastic)

Question 2 options:

a)

if few substitutes for the product are available.

b)

if the good is a necessity.

c)

when people spend a small share of their income on the product.

d)

in the long run rather than the short run.

Question 3 (1 point)

Which demand is most inelastic?

Question 3 options:

a)

gasoline

b)

provolone cheese

c)

Chevrolet automobiles

d)

fresh tomatoes

Question 4 (1 point)

Rebel Records announces it is increasing the prices of its recordings by 2%. If Rebel is seeking to increase revenues, it must believe that the elasticity of demand for recordings is

Question 4 options:

a)

unit elastic.

b)

perfectly inelastic.

c)

inelastic.

d)

elastic.

Question 5 (1 point)

If the price of Good A increases by 7% and the quantity of Good B demanded increases by 3%, then the goods are

Question 5 options:

a)

substitutes.

b)

complements.

c)

inferior goods.

d)

normal goods.

Question 6 (1 point)

If the income elasticity of a good is positive and greater than 1, we can conclude that the good is a(n)

Question 6 options:

a)

complement.

b)

substitute.

c)

necessity.

d)

luxury.

Question 7 (1 point)

Which is true?

Question 7 options:

a)

The price elasticity of supply will be greater in the short run.

b)

The price elasticity of supply is always negative.

c)

The price elasticity of supply will be greater when inputs can be easily used to produce other goods.

d)

All of these are true.

Question 8 (1 point)

Which would have a greater price elasticity of supply?

Question 8 options:

a)

veterinary services

b)

commercial aircraft piloting

c)

teaching university-level economics

d)

janitorial services

Question 9 (1 point)

A 5% decrease in the quantity of good X demanded is caused by a 25% decrease in income. Which form of elasticity can be calculated with this data?

Question 9 options:

a)

Price elasticity of demand

b)

Cross-price elasticity of demand

c)

Income elasticity of demand

d)

Price elasticity of supply

Question 10 (1 point)

An effective price ceiling will

a)

increase the quantity exchanged.

b)

decrease search activity.

c)

all of these.

d)

a shortage.

Question 10 options:

Question 19 (1 point)

A tax on a good _________________ the quantity exchanged, _________________ the price that buyers effectively pay, and _________________ the price that sellers effectively receive.

Question 19 options:

a)

raises; raises; lowers

b)

raises; lowers; raises

c)

lowers; lowers; raises

d)

lowers; raises; lowers

Question 20 (1 point)

The greater the elasticity of demand, the ______ is the decrease in the equilibrium quantity, the ______ is the deadweight loss, and the ______ is the tax revenue.

Question 20 options:

a)

greater; smaller; greater

b)

smaller; greater; smaller

c)

greater; greater; smaller

d)

smaller; smaller; greater

Question 21 (1 point)

A subsidy on a good _________________ the price that buyers effectively pay, _________________ the price that sellers effectively receive, and _________________ the quantity exchanged.

a)

lowers; lowers; raises

b)

lowers; raises; raises

c)

raises; raises; lowers

d)

raises; lowers; raises

Question 21 options:

Question 13 (1 point)

The black market results in

Question 13 options:

a)

less violence & defective products than a regulated market but more violence & defective products than a free market.

b)

all of these.

c)

higher prices than in a free market.

d)

an increase in the quantity exchanged compared to a free market.

Question 14 (1 point)

What will the price be if a quota of 7 is imposed? (Enter a dollar sign before the number.)

Question 14 options:

Question 15 (1 point)

When an effective production quota is applied, the price ______ and the quantity produced ______ and the. On the last unit, the marginal benefit ______ marginal cost.

Question 15 options:

a)

decreases; rises; is less than

b)

decreases; falls; exceeds

c)

increases; falls; exceeds

d)

increases; rises; is less than

Question 16 (1 point)

If the supply curve is shifted to show the imposition of a tax, then

Question 16 options:

a)

the statutory burden is on the seller.

b)

the actual burden is on the seller.

c)

the actual burden is on the buyer.

d)

the statutory burden is on the buyer.

Question 17 (1 point)

The seller will pay more of the tax when

a)

the supply curve is less elastic than the demand curve.

b)

the supply curve is shifted to show the imposition of the tax.

c)

the demand curve is shifted to show the imposition of the tax.

d)

the demand curve is less elastic than the supply curve.

Question 17 options:

Question 19 (1 point)

A tax on a good _________________ the quantity exchanged, _________________ the price that buyers effectively pay, and _________________ the price that sellers effectively receive.

Question 19 options:

a)

raises; raises; lowers

b)

raises; lowers; raises

c)

lowers; lowers; raises

d)

lowers; raises; lowers

Question 20 (1 point)

The greater the elasticity of demand, the ______ is the decrease in the equilibrium quantity, the ______ is the deadweight loss, and the ______ is the tax revenue.

Question 20 options:

a)

greater; smaller; greater

b)

smaller; greater; smaller

c)

greater; greater; smaller

d)

smaller; smaller; greater

Question 21 (1 point)

A subsidy on a good _________________ the price that buyers effectively pay, _________________ the price that sellers effectively receive, and _________________ the quantity exchanged.

a)

lowers; lowers; raises

b)

lowers; raises; raises

c)

raises; raises; lowers

d)

raises; lowers; raises

Question 21 options: