The price elasticity of demand is useful because it measures the responsiveness of _____ to changes in _____.

Group of answer choices

taxpayers; demand

consumers; price

consumers; demand

producers; supply

producers; income

Flag this Question

Question 2

2pts

What is the effect of a 10 percent price increase ontotal revenueifelasticity is equal to 1?

Group of answer choices

Revenue drops to 0.

Revenue decreases.

Revenue does not change.

Revenue increases by 10 percent.

Revenue increases by less than 10 percent.

Flag this Question

Question 3

2pts

The cross-price elasticity of demand is used to determine whether _____

Group of answer choices

a product is a necessity or a luxury.

two products are substitutes or complements.

a product is an inferior or a normal good.

the product's demand curve is linear.

price and total revenue are directly or inversely related.

Flag this Question

Question 4

2pts

The supply curve for dorm rooms on a university campus is likely to be _____

Group of answer choices

horizontal.

vertical.

downward sloping.

relatively flat.

upward sloping.

Flag this Question

Question 5

2pts

If anincrease in the price of gasoline decreases the demand for tires, it indicates that _____

Group of answer choices

the two goods are complements.

Pepsi is a substitute and Coke is a complement.

the two goods are substitutes.

the two goods are income elastic.

Coke is a substitute and Pepsi is a complement.

Flag this Question

Question 6

2pts

What is the effect of a 10 percent price increase onquantity demandedif 1 is less thanelasticity and elasticity is less than infinity?

Group of answer choices

Quantity demandeddrops by 10 percent.

Quantity demanded does not change.

Quantity demandeddrops by more than 10 percent.

Quantity demanded drops to 0.

Quantity demanded drops by less than 10 percent.

Flag this Question

Question 7

2pts

A perfectly elastic demand curve is _____

Group of answer choices

a vertical straight line.

a horizontal straight line.

u-shaped.

an upward-sloping straight line.

a downward-sloping straight line.

Flag this Question

Question 8

2pts

What is the effect of a 10 percent price increase onquantity demandedifelasticity is zero?

Group of answer choices

Quantity demanded does not change.

Quantity demanded drops by less than 10 percent.

Quantity demanded drops to 0.

Quantity demandeddrops by 10 percent.

Quantity demandeddrops by more than 10 percent.

Flag this Question

Question 9

2pts

If an increase in price from $1 to $2 per unit leads to an increase in quantity supplied from 20 to 100 units, then the value of the price elasticity of supply is _____

Group of answer choices

4.

2.67.

2.

0.38.

8.

Flag this Question

Question 10

2pts

When agricultural production increases, the total amount paid for agricultural products tends to _____

Group of answer choices

remain constant because demand is price inelastic.

decrease because demand is price inelastic.

increase because demand is price inelastic.

decrease because demand is price elastic.

increase because demand is perfectly elastic.

Flag this Question

Question 11

5pts

Pure capitalism and a pure command system are _____

Group of answer choices

the most efficient ways of answering the basic economic questions.

two different ways of answering the basic economic questions.

two terms describing the same method of answering the basic economic questions.

two economic systems where the problem of scarcity does not exist.

the only two ways of answering the basic economic questions.

Flag this Question

Question 12

5pts

Which of the following is not a gain from the division of labor?

Group of answer choices

Workers save time by not moving to different tasks.

Workers gain experience from the repetition of the tasks.

Workers' morale increases as tasks become more specialized.

The introduction of labor-saving machinery is possible.

Workers' abilities are matched to tasks.

Flag this Question

Question 13

5pts

Comparative advantage refers to _____

Group of answer choices

the ability of an individual to produce a good using fewer labor hours than other individuals.

the ability of an individual to produce a good at a lower opportunity cost than another individual.

the ability of an individual to produce a greater amount of a good than another individual.

the ability of an individual to produce a lesser amount of a good than another individual.

the ability of an individual to produce a good at a lower dollar cost than another individual.

Flag this Question

Question 14

5pts

Which of the following would cause an outward shift of the production possibilities frontier?

Group of answer choices

a change in the combination of goods produced

a reduction in the size of the labor force

a reduction in inefficiency

an improvement in technology

an increase in opportunity costs

Flag this Question

Question 15

5pts

Of the various types of economic systems, pure market capitalism involves the greatest government interference and control over the economy.

Group of answer choices

False

True

Flag this Question

Question 16

4pts

Table 9.4

Price ($)Quantity

901

802

703

604

505

Refer to Table 9.4, which shows the demand schedule for a monopolist. Marginal revenue associated with the sale of the fourth unit of output is _____

Group of answer choices

$10.

$240.

$30.

$210.

$60.

Flag this Question

Question 17

4pts

The demand curve facing a non-discriminating monopolist _____

Group of answer choices

lies above its average revenue curve.

is the same as its average revenue curve.

is perfectly price inelastic.

is perfectly price elastic.

lies below its marginal revenue curve.

Flag this Question

Question 18

4pts

Under monopoly, the marginal benefit is always _____

Group of answer choices

more than the marginal cost.

less than the total cost.

the same as the marginal cost.

less than the marginal cost.

less than the average cost.

Flag this Question

Question 19

4pts

Which of the following prevents potential competitors from entering a monopolized market?

Group of answer choices

stable market demand

legal restrictions

diseconomies of scale

an abundant supply of resources

product differentiation

Flag this Question

Question 20

4pts

Exhibit 9.16

Refer to Exhibit 9.16, which shows the cost and revenue curves faced by a monopolist. If this monopolist practices perfect price discrimination,the maximum amount consumers are willing to pay for that unit is _____

Group of answer choices

e.

zero.

a.

area aec.

c.

Flag this Question

Question 21

5pts

A decline in market demand in a competitive industry will result in a(n) _____

Group of answer choices

increase in the equilibrium price.

rightward shift of the market supply curve in the short run.

economic profit for all firms in the industry.

decrease in the number of firms in the industry in the short run.

decrease in the equilibrium quantity.

Flag this Question

Question 22

5pts

Exhibit 8.10

Refer to Exhibit 8.10, which shows a competitive firm on the left panel and a competitive market on the right panel. Assuming all the firms in the market are identical, there are _____ firms in this industry.

Group of answer choices

2,000

50

60

40

2,500

Flag this Question

Question 23

5pts

In an increasing-cost industry, the entry of new firms _____

Group of answer choices

decreases the equilibrium price.

shifts the long-run industry supply curve to the right.

shifts the industry demand curve to the left.

increases the average cost at each level of output.

increases economic profits in the industry.

Flag this Question

Question 24

5pts

When marginal revenue equals marginal cost, the firm just breaks even.

Group of answer choices

True

False

Flag this Question

Question 25

5pts

A constant-cost industry is one _____

Group of answer choices

that experiences economies of scale throughout its scale of operation.

that experiences a stable demand in the long run.

whose cost curves do not change as new firms enter the market.

that faces increasing resource prices as new firms enter the market.

whose average costs are constant in the short run.

Flag this Question

Question 26

1pts

Table 4.3

The table given below shows the quantity supplied and the quantity demanded of a good at different prices. If the price of the good described in the table given below is $1.60, then there is a_____

Table 4.3

Group of answer choices

surplus of 10 units.

shortage of 20 units.

surplus of 30 units.

shortage of 30 units.

surplus of 20 units.

Flag this Question

Question 27

1pts

Which of the following will not shift the supply curve?

Group of answer choices

a change in price

the prices of other goods

producer expectations

the state of technology and know-how

the prices of resources

Flag this Question

Question 28

1pts

Exhibit 4.1

Refer to Exhibit 4.1 for the demand curves of baby formula. Which of the following changes will be caused by the discovery that breast milk provides more protection against a life-threatening disease than baby formula?

Group of answer choices

a movement along the demand curve D₁from point a to point b

a shift of the demand curve from D₁to D₂

a movement along the demand curve D₂from point d to point c

a movement from point b on the demand curve D₁to point c on the demand curve D₂

a shift of the demand curve from D₂to D₁

Flag this Question

Question 29

1pts

Which of the following will cause the demand curve for gasoline to shift leftward?

Group of answer choices

a rightward shift of the supply curve of cars

a leftward shift of the supply curve of gasoline

a decrease in the price of gasoline

an increase in the price of cars

an increase in the price of gasoline

Flag this Question

Question 30

1pts

Exhibit 4.6

The Exhibit given below shows the market for a good. D and S are the demand curve and the supply curve, respectively. Which of the following is least likely to shift the demand curve from D to D'?

Group of answer choices

a decrease in the price of a complement

a decrease in income if the good in question is an inferior good

a decrease in the price of the good in question

an increase in the number of consumers

an increase in the price of a substitute

Flag this Question

Question 31

1pts

Identify a distinguishing feature of a monopoly.

Group of answer choices

A monopolist is a price taker.

There are many firms in a monopolized industry.

A monopolist faces a horizontal demand curve.

There are no close substitutes for a monopolist's product.

There are no barriers to entry in a monopolized market.

Flag this Question

Question 32

1pts

Exhibit 9.4

Refer to Exhibit 9.4, which shows the total cost and total revenue curves for a monopolist. The profit-maximizing price charged by the monopolist is _____

Group of answer choices

$20.00.

$80.00.

$23.33.

$70.00.

$40.00.

Flag this Question

Question 33

1pts

A monopolist is likely to overcome a short-run economic loss in the long run by _____

Group of answer choices

advertising its product.

employing a smaller number of inputs.

increasing the price of its output.

allowing other firms to enter the market.

reducing its total output.

Flag this Question

Question 34

1pts

Which of the following is true for a monopolist that engages in perfect price discrimination?

Group of answer choices

Perfect price discrimination allows the monopolist to just break even and transfers the gain to consumers.

Perfect price discrimination creates a deadweight loss.

Perfect price discrimination results in the maximization of consumer surplus.

Perfect price discrimination restricts the total output produced by the monopolist.

Perfect price discrimination allows the monopolist to reap the entire gains from production.

Flag this Question

Question 35

1pts

Exhibit 9.12

Refer to Exhibit 9.12, which shows the cost and revenue curves faced by a profit-maximizing monopolist.The monopolist earns economic profit equal to the area _____

Group of answer choices

dbc.

pbdp'.

adp'.

below D.

acp.