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Question 1

Suppose the Minister of health wants to redo cigarette smoking by increasing tobacco taxes. Which one of the following describes why it will probably take a fairly large tobacco tax to make much of a difference?
A) Price is irrelevant for consumers
B) supply of tobacco is relatively inelastic
C) demand for cigarettes is totally inelastic
D) demand for cigarettes is relatively inelastic

Answer 1

D

Question 2

As income rises during economic upturn's, consumption potato declines, yet as income falls during economic downturn's, consumption potatoes rises. Which one of the following is likely explanation for the change in potato consumption?
A)) high income elasticity of demand
B) very high price elasticity of supply
C) very low price elasticity of demand
D) negative income elasticity of demand

Answer 2

D

Question 3

Suppose there is excess capacity in the production facility of Jesus bakery. The bakery supply curve is said to be

Answer 3

Price elastic

Question 4

Fisherman must sell all of his daily cash before it spoils for whatever price is offered. The Fishermans price elasticity of supply for fresh fish is

Answer 4

Zero

Question 5

Which of the following is the income elasticity of demand for housing if you bola we spent 25% of their income on housing?

Answer 5

1.00

Question 6

Which one of the following is the main reason that OPEC has not been able to keep oil prices high
A) Government regulations have prevented it
B). Supply tends to be more inelastic in the long run
C) demand tends to be more elastic in the long run
D) massive new petroleum discoveries have increase the supply

Answer 6

C

Question 7

If price elasticity of supply tends to be higher, which one of the following will be the outcome?
A) The time period Will be longer
B) it will be easier for more new firms to enter the industry
C) The firms can be more adaptable to changing market conditions
D) The demand will also be higher

Answer 7

A

Question 8

Supposed bill buys one six pack of beer in each week, regardless of price, and he drinks it on Saturday night. Which one of the following statements is correct
A) Price elasticity of demand is zero
B) Price elasticity of demand is ones) Price elasticity of demand is six
D) Price elasticity of supply is greater than one

Answer 8

A

Question 9

Which one of the following describes the elasticity of the street line or constant slope demand curve
A) elasticity remains constant along its length
B) elasticity increases as quantity demanded increases along its length
C) elasticity decreases as quantity demanded increases along its length
D) elasticity first increases and then decreases as quantity demanded increases

Answer 9

C

Question 10

which one of the following is the cross price elasticity of demand for orange golf balls with respect to any change in the price of white golf balls?
A) positive and probably high
B) negative and probably high
C) positive and probably low
D) negative and probably low

Answer 10

A

Question 11

If the demand for goods price elastic,
A) suppliers can increase the revenue by securing a price below the current level
B) suppliers can increase their revenue by restricting supply
C) suppliers can increase the revenue by securing a price above the current level
D) suppliers can increase the revenue if they can devise technology that will increase supply

Answer 11

D

Question 12

Which one of the following describes the circumstance in which an increase in demand will not have any affect on price

Answer 12

Where supply is perfectly elastic

Question 13

If the price elasticity of demand is 0.5, which of the following will pay 20% price hike the to?

Answer 13

B why ???