QUESTION 1 A good is inelastic if: Atotal revenue decreases as a result of a price increase Bthe qua 1 answer below »

QUESTION 1

A good is inelastic if: Atotal revenue decreases as a result of a price increase Bthe quantity effect outweighs the price effect of a price increase Cthe measured elasticity is greater than 1 DNone of these is true

QUESTION 2 If demand for a product is unit-elastic, then increasing the price of the product will leave total revenue unchanged ATrue BFalse

QUESTION 3 A good is inelastic if: Atotal revenue increases as a result of a price increase Bthe quantity effect outweighs the price effect of a price increase Cthe measured elasticity is greater than 1 DNone of these is true

QUESTION 4 For a market with a straight-line, downward-sloping demand curve, the total revenue curve is Ahorizontal Bvertical Cupward sloping Dshaped like an upside-down “U“ EU-shaped

QUESTION 5 The demand for a product is said to be inelastic if total consumer expenditures Aremain constant as price changes Brise more than price rises as a percentage Cfall when price falls Dfall when price rises Erise less than price as a percentage

QUESTION 6 When will an increase in price lead to an increase in total revenue? AWhen demand is elastic BWhen demand is unitary elastic CWhen the cross-price elasticity is negative DWhen demand is inelastic EWhen income elasticity is positive

QUESTION 7 An increase in price: Acauses a decrease in revenue due to the price effect Bcauses an increase in revenue due to the price effect Ccauses an increase in revenue due to the quantity effect DNone of these is true

QUESTION 8 If demand is inelastic, then an increase in the price of a good will lead to a decrease in total revenue for producers of the good ATrue BFalse

QUESTION 9 If the quantity effect outweighs the price effect of a price increase, then: Athe good is price elastic Bthe good is price inelastic Cthe good is price unit elastic DAny of these could be true

QUESTION 10 When the quantity effect outweighs the price effect: Aa price increase will cause a drop in revenue Ba price increase will cause an increase in revenue Ca price decrease will cause a decrease in revenue DNone of these is true

QUESTION 11

Alternatives Good X Good Y

A 0 72

B 30 70

C 50 65

D 60 40

E 64 0

Using the table above, the production of 25 units of good X and 60 units of good Y is:

Anot feasible given current resources and technology

Bfeasible, but would occur only if there were either unemployed or underemployed resources

Cpossible only if economic growth occurs

DNone of the above is correct

QUESTION 12

Alternatives        Good X        Good Y

    A                       0                72

    B                        30             70

    C                        50             65

    D                        60             40

    E                         64              0

Using the table above, it can be seen that the production of 40 units of good X and 80 units of good Y is:

Anot feasible given current resources and technology

Bfeasible, but would only occur if there were unemployed or underemployed resources

Cpossible with existing resources if efficient production takes place

DNone of the above is correct

QUESTION 13 Suppose sales of a product depend directly on economic growth If producers of that product expect an economic recession in the near future, there is likely to be Aa rightward shift of the supply curve Ba movement to the left along the supply curve Ca leftward shift of the supply curve Da movement to the right along the supply curve ENone of these

QUESTION 14 An increase in a product supply curve might be caused by Asome firms entering an industry Ban increase in the price of an input (resource) Can increase in the price of the product Da decrease in consumer incomes Esome firms leaving an industry

QUESTION 15 Assume the supply curve of sirloin steak is upward sloping If the price increases from $425 to $860 per pound, Athe supply of sirloin steak will rise Ba greater quantity of sirloin steak will be supplied Ca small quantity of sirloin steak will be supplied Dthe demand for sirloin steak will decrease Ethe supply of sirloin steak will decrease

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