Mini Quizzes Pt. 2

Question 1

What is the price elasticity of demand between 2.50 and 2.25? (2.50:0 - 2.25:25)

Answer 1

-19

Question 2

The price elasticity of demand is:

Answer 2

Always negative

Question 3

The price elasticity of demand between points B and C is: B(6:2) C(4:4)

Answer 3

-1.67

Question 4

If an increase in the price of a good leads to an increase in total revenue, then:

Answer 4

None of the above is true: there is no info given regarding the price elasticity of supply

Question 5

If demand is price elastic, it is certain that:

Answer 5

An increase in price will lower total revenue

Question 6

If the quantity demanded of agricultural output is very unresponsive to a fall in price, the demand for agricultural output is:

Answer 6

Price inelastic

Question 7

The price elasticity of a good will tend to be greater:

Answer 7

The longer the relevant time period

Question 8

Utility is the:

Answer 8

Satisfaction consumers derive from their consumption of goods and services

Question 9

Economists assume that firms seek to maximize:

Answer 9

Profits

Question 10

Assume that 4 dozen golf balls are purchased for $12 per dozen. Consumer surplus is: (graph) 20:0 18:1 16:2 14:3 12:4 10:5

Answer 10

16$ (unsure???)

Question 11

Regardless of whether they pay for them, people cannot be excluded from receiving the benefits of:

Answer 11

Public goods

Question 12

A characteristic of a competitive free market is that, if external costs exist, they:

Answer 12

Are not reflected by the total market supply curve

Question 13

All for the following are examples of external costs EXCEPT: smoke nuisance of a factory - zoning restrictions on your property - land defilement from strip mining - weeds on your next-door neighbor’s lawn

Answer 13

Zoning restrictions on your property

Question 14

The change in total output resulting from a 1-unit increase in the quantity of a factor production used, holding the quantities of all other factors of production consultant is:

Answer 14

Marginal product

Question 15

The short run is a period that is:

Answer 15

Long enough in which to vary output but not plant capacity

Question 16

The costs associated with variable factors of production are _ costs and the costs associated with _ factors of production are _ costs.

Answer 16

Variable; fixed; fixed

Question 17

Which of the following statements is a “true” statement?

Answer 17

The world’s food supply could be grown in a flower pot, if the law of diminishing returns did not hold!

Question 18

In the first of the three ranges of production:

Answer 18

The marginal product curve has a positive slope

Question 19

Bev’s Bakery, a donut maker, has discovered that the ratio of the marginal product of labor to the price of labor is 6.5, while the ratio of the marginal product of capital to the price of capital is 6.1. The firm has determined that it does not want to change its total costs. Bev’s Bakery should:

Answer 19

Use more labor and less capital

Question 20

A firm increases its purchases of a factor of production in a perfectly competitive market from 10 units to 11 units. If the market price of the factor is 20$ per unit, the marginal factor cost for the eleventh unit is:

Answer 20

20$ (?)

Question 21

A factor demand curve will shift because of:

Answer 21

A change in the price of a substitute factor

Question 22

Which of the following statements is true?: Liesure is a normal good, Liesure is an inferior good, AOTU an increase in income will decrease the demand for leisure, the demand for leisure is perfectly inelastic

Answer 22

Leisure is a normal good

Question 23

If the equilibrium wage in the market for bricklayers is 100$ a day, but a minimum wage for bricklayers of 130$ a day is set by the government: (graph)

Answer 23

3 workers who otherwise would have been employed are now unemployed