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EC600DC ECONOMICS FOR BUSINESS DECISION MAKING ( EC600DC) > CONTROL PANEL > TEST MANAGER > TEST CANVAS
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Exam 1 Chaps 1,2, 3 and 4 Name Description Exam 1 covers Chapters 1 - 4, but the emphasis is on Chaps 3 and 4. I think there is, maybe 1 question from Chap 1 and from Chap 2. All the rest (35 questions total) come from Chapters 3 & 4 pretty equally. Instructions Modify Add Question Here
Question 1
Multiple Choice
10 points
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Question The economic concept of "opportunity cost" is most closely associated with which of the following management considerations? Answer technology
market structure resource scarcity product demand Add Question Here
Question 2
Multiple Choice
10 points
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Question A firm's "normal profit" is best characterized by the Answer the average amount of profit earned in the firm's industry.
amount of profit a firm could earn in its next best alternative activity. average of a firm's profits over the past five years. amount of profit necessary to keep the price of a firm's stock from changing. Add Question Here
Question 3
Multiple Choice
10 points
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Question Which of the following best applies to the distinction between the "long run" and the "short run"? Answer The rationing function of price is a short-run phenomenon whereas the guiding function is a long-run phenomenon. In the short run, only new firms may enter, while in the long-run firms may either enter or exit the market.
The short run is a period of approximately 1-6 months while the long run is any time frame which is longer. All of the above statements are correct. Add Question Here
Question 4
Multiple Choice
10 points
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Question In the long run if there is a shortage in the market for a product, the guiding (allocation) function of price can be expected to cause Answer a decreasing shift in the demand for the product.
an increasing shift in the supply of the product. a decreasing shift in the supply of the product. an increasing shift in the demand for the product. Add Question Here
Question 5
Multiple Choice
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Question The "law" of demand can be best described by Answer if incomes rise, people will buy more.
a rise in price will cause shortages. a fall in price will increase quantity demanded. people will buy things that they enjoy. Add Question Here
Question 6
Multiple Choice
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Question All of the following are non-price determinants of demand except Answer tastes and preferences.
income. future expectations. technology. Add Question Here
Question 7
Multiple Choice
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Question Which of the following would cause a decrease in the demand for fish? Answer The price of chicken decreases.
The price of fish increases. The price of red meat increases. The number of fishing boats decreases. Add Question Here
Question 8
Multiple Choice
10 points
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Question Which of the following can result in a decrease in the demand for I-Pods in the short run? Answer a decrease in the price of MP4s
a decrease in the population a decrease in real household incomes All of the above Add Question Here
Question 9
Multiple Choice
10 points
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Question Two goods are ________ if the quantity consumed of one increases when the price of the other decreases. Answer
normal
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substitute complementary superior Add Question Here
Question 10
Multiple Choice
10 points
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Question Which of the following will not cause the demand curve for good X to shift? Answer a change in the price of Y, a complement
an increase in average disposable real income a change in the price of X a change in the price of Z, a substitute Add Question Here
Question 11
Multiple Choice
10 points
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Question Coke and Pepsi are substitutes if Answer
the supply of Coke increases when the price of Pepsi falls the demand for Coke increases when the price of Pepsi rises the demand for Coke increases when the price of Pepsi falls the demand for Coke and Pepsi rise and fall together Add Question Here
Question 12
Multiple Choice
10 points
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Question Which of the following applies most generally to supply in the long run? Answer
Producers are able to make change in all their factors of production. Average total cost must decline. Producers are only able to make change in their variable factors of production. All original producers will leave the market. Add Question Here
Question 13
Multiple Choice
10 points
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Question A fall in the price of pesticide use in the production of Cotton will Answer cause a downward movement along the supply curve of Cotton.
have no effect on the supply of Cotton. decrease the supply of Cotton, causing the supply curve of Cotton to shift to the left. increase the supply of Cotton, causing the supply curve of Cotton to shift to the left. None of the above Add Question Here
Question 14
Multiple Choice
10 points
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Question Which of the following would cause a leftward shift in the demand curve for a good? Answer the expectation that there will be a shortage in the availability of the good
an increase in income an increase in the price of a complementary good
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an increase in the price of a substitute Add Question Here
Question 15
Multiple Choice
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Question A market is in equilibrium when Answer the quantity supplied is equal to the quantity demanded.
tastes and preference remain constant. the price is adjusting upward. supply is equal to demand. Add Question Here
Question 16
Multiple Choice
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Question The switch to the use of ethanol in gasoline is driven primarily by its relatively lower price. Assuming a competitive market, what effect would this change have on the equilibrium price and output for gasoline? Answer
Price rises, output rises. Price falls, output falls. Price rises, output falls. Price falls, output rises. Add Question Here
Question 17
Multiple Choice
10 points
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Question Holding supply constant, an increase in demand will Answer decrease both the quantity and price.
increase both the quantity and price. decrease the equilibrium price and increase the equilibrium quantity. increase the equilibrium price and decrease the equilibrium quantity. Add Question Here
Question 18
Multiple Choice
10 points
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Question The elasticity of demand for a product is likely to be greater Answer if the product is a luxury rather than an absolute necessity.
if the product is an imported good rather than a domestically produced good. the smaller the proportion of one's income spent on the product. the smaller the number of substitute products available. Add Question Here
Question 19
Multiple Choice
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Question If the consumption of sugar does not change at all following a price increase from 50 cents per pound to 65 cents per pound, the demand for sugar is considered to be Answer unitary elastic.
perfectly inelastic. relatively inelastic. perfectly elastic. Add Question Here
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Question 20
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Multiple Choice
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Question If an item has several good substitutes, the demand curve for that item is likely to be Answer unit elastic.
relatively inelastic. perfectly inelastic. relatively elastic. Add Question Here
Question 21
Multiple Choice
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Question Suppose the price of beans rises from $1.00 a pound to $2.00 a pound, quantity demanded falls from 10 units to 6 units, the coefficient of elasticity of demand for beans using the arc elasticity approach is Answer -0.75.
-0.25. -0.4. -1.33. Add Question Here
Question 22
Multiple Choice
10 points
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Question A perfectly elastic demand curve Answer is a 45-degree line.
cannot be represented on a two-dimensional graph. can be represented by a line parallel to the vertical axis. can be represented by a line parallel to the horizontal axis. Add Question Here
Question 23
Multiple Choice
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Question The cross-price elasticity of demand for coffee and tea is likely to be Answer
greater than zero. infinity. zero. less than zero. Add Question Here
Question 24
Multiple Choice
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Question The cross-price elasticity of demand for coffee and caskets is likely to be Answer greater than zero.
less than zero. zero. infinity. Add Question Here
Question 25
Multiple Choice
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Question The owner of a produce store found that when the price of a head of lettuce was raised from 50 cents to $1, the quantity sold per hour fell from 18 to 8. The arc elasticity of
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demand for lettuce is Answer
-0.8. -1.15. -0.56. -1.57. Add Question Here
Question 26
Multiple Choice
10 points
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Question If a firm decreases the price of a good and total revenue decreases, then Answer the cross elasticity is negative.
the demand for this good is price elastic. the demand for this good is price inelastic. the income elasticity is less than 1. Add Question Here
Question 27
Multiple Choice
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Question If the income elasticity of a particular good is negative 0.2, it would be considered Answer a superior good.
an elastic good. an inferior good. a normal good. Add Question Here
Question 28
Multiple Choice
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Question Table 1 The following information is provided for Tony Romo's income and expenditures. Monthly Income $2,000 $3,000
Quantity Purchased per Month Steaks Pizzas 2 8 4 6
In Table 1, pizzas are classified as a(n) Answer marginal good. normal good. inferior goods. positive good. Add Question Here
Question 29
Multiple Choice
10 points
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Question Table 1 The following information is provided for Tony Romo's income and expenditures. Monthly Income $2,000 $3,000
Quantity Purchased per Month Steaks Pizzas 2 8 4 6
In Table 1, Tony's income elasticity of demand for pizzas is
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Answer
greater than 1.0. 1.0. 0. less than zero. Add Question Here
Question 30
Multiple Choice
10 points
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Question Which of the following instances will total revenue or receipts decline? Answer Price falls and demand is unit elastic.
Price rises and demand is elastic. Price falls and demand is elastic. Price rises and demand is inelastic. Add Question Here
Question 31
Multiple Choice
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Question If the price of a good is decreased and total revenue received from the sale of this good does not change, then the price elasticity of demand for the good is Answer inelastic.
unitary. elastic. None of the above Add Question Here
Question 32
Multiple Choice
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Question If the price elasticity of supply of a good is elastic and the good price increases, then the increase in the quantity of the good supplied should be Answer greater than the increase in price.
the same as the increase in price. less than the increase in price. Cannot be determined from this information Add Question Here
Question 33
Multiple Choice
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Question The derived demand curve for a good component will be more inelastic Answer the less essential is the component in question.
the more inelastic is the demand curve for the final good. the larger is the fraction of total cost going to this component. the more elastic are the supply curves of cooperating factors. Add Question Here
Question 34
Multiple Choice
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Question If government imposes a price ceiling on a good that is below the market equilibrium price Answer a shortage will develop.
a surplus will develop.
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consumers will reduce their demand for the good. producers will reduce their sales price. Add Question Here
Question 35
Multiple Choice
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Question If government imposes an excise tax on a good and the tax burden is borne equally by buyers and sellers, then Answer the absolute values of price elasticities of demand and supply are equal.
price elasticity of supply is unitary. price elasticity of demand is unitary. None of the above Add Question Here
