Micro Final - Mcconnell Brue Quizzes

Front 1

Suppose that as the price of a good rises from $3.90 to $4.10, the quantity demanded falls from 210 to 190. Then the price elasticity of demand is:

Back 1

2

Front 2

While it is relatively easy to shift land from production from one type of grain to another, the process takes a considerable amount of time. This implies that:

Back 2

the supply of barley is more elastic in the long run than the short run

Front 3

If the short run supply of good X is perfectly inelastic

Back 3

the short-run supply curve graphs as a vertical line

Front 4

Refer to the diagram. If total revenue at price P3 is the same at price P2, the in the P2P3 price range, demand is:

Back 4

of unit elasticity

Front 5

An increase in demand for a product whose supply is perfectly elastic will

Back 5

increase quantity but leave price unchanged

Front 6

Suppose there is an inverse relationship between the price of one good and the quantity demanded of another. We could conclude that

Back 6

the cross elasticity of demand is negative and the two goods are complements

Front 7

Suppose that a 2% increase in income in the economy decreases the quantity of gadgets demanded by 1% at every possible price. This implies that:

Back 7

income elasticity is negative and gadgets are an inferior good

Front 8

Assume that the price of product Y decreases by 5% and the quantity supplied decreases by 2%. The coefficient of price elasticity of supply for good Y is:

Back 8

less than one and therefore supply is inelastic

Front 9

Refer to the diagram. Over the range of P1 to P2 we know that demand is:

Back 9

elastic because area D exceeds area A

Front 10

The maker of a particular breakfast cereal found that increasing the price from $3.00 to $3.25 per box had no impact on total revenue, but increasing the price further to $3.50 reduced total revenue by 2%. Thus, the demand for the cereal is:

Back 10

unit elastic over the range $3.00 to $3.25 and elastic over the range $3.25 to $3.50

Front 11

The cross price elasticity of demand between two goods is reported to be +0.2. This implies that:

Back 11

the two goods are substitutes

Front 12

Which of the following is likely to have the most elastic demand?

Food
Fruit
Bananas
Dole Brand Bananas

Back 12

Dole brand bananas

Front 13

If a decrease in price increases total revenue:

Back 13

demand is elastic

Front 14

Use the following table to answer the next question. The data represent the demand schedule for a concert to be held in an arena that holds 5000 people.



Price per ticket -Quality demanded
$13 1,000
11 2,000
9 3,000
7 4,000
5 5,000
3 6,000

Back 14

$7 per ticket

Front 15

The price elasticity of demand for gadgets is 1.20. All else equal, a 2% reduction in the price of gadgets will increase quantity demanded by:

Back 15

2.4%

Front 16

A firm finds that its price elasticity of demand is 4.0. Currently, the firm is selling 2000 units per month at $5 per unit. If it wishes to increases its sales by 10%, it must lower its price by:

Back 16

2.5%

Front 17

A perfectly elastic supply curve

Back 17

graphs as a horizontal line

Front 18

The greater the elasticity of supply:

Back 18

the more an increase in demand will increase quantity

Front 19

If demand is inelastic:

Back 19

an increase in price will increase total revenue

Front 20

If a 12% price reduction causes quantity demand to rise by 12%:

Back 20

total revenue will remain constant

Front 21

A manufacturing firm lowers its price by 3% and finds its revenue has decreased. Which of the following best explains this outcome?

Back 21

Demand elasticity is less than one

Front 22

Suppose price rises from $15 to $17 and quantity demanded decreases by 20%. We can conclude:

Back 22

total revenue will decrease

Front 23

If demand is a downward-sloping straight line with slope of -2:

Back 23

demand is elastic on the upper half of the diagram; inelastic on the lower half

Front 24

Suppose legalization--and subsequent taxation--of heroin and cocaine reduces their prices by 50%. Estimates suggest the total quantity of heroin and cocaine demanded would rise by 83% and 42%, respectively. Consequently, legalization would:

Back 24

increase total expenditures on heroine and decrease total expenditures on cocaine

Front 25

Each of two firms willingly supply 25,000 gadgets a month at a price of $13. If the price were to fall to $11, one of the firms would decrease its monthly production by 1,500 and the other would decrease its monthly production by 2,500. If these are the only two producers, the elasticity of supply in this market is

Back 25

0.5

Front 26

The cross elasticity of demand between root beer and cola is likely to be:

Back 26

a positive number