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Kaplan University AC430 - Unit 3 Quiz

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Question;Unit 3 Quiz 1. Question: Suppose the absolute value of the price elasticity of demand for meals at Fortune Buffet House is. What happens to sales revenue if the restaurant increases its price by 5 percent? Student Answer: Sales revenue falls by less than 5 percent. Sales revenue remains unchanged. Sales revenue falls by 100 percent. It cannot be determined without information on prices Points Received: 1 of 1 Comments: 2. Question: A demand curve that is horizontal indicates that the commodity Student Answer: has few substitutes. must be very cheap. is a necessity. has a large number of substitutes. Points Received: 1 of 1 Comments: 3. Question: Which of the following statements about the price elasticity of demand is correct? Student Answer: The elasticity of demand for a good in general is equal to the elasticity of demand for a specific brand of the good. The absolute value of the elasticity of demand ranges from zero to one. Demand is more elastic in the long run than it is in the short run. Demand is more elastic the smaller percentage of the consumer's budget the item takes up. Points Received: 1 of 1 Comments: 4. Question: If demand is price elastic, the absolute value of the price elasticity of demand is Student Answer: one. less than one. greater than one. greater than the absolute value of the slope of the demand curve. Points Received: 1 of 1 Comments: 5. Question: Figure 6-3 Refer to Figure 6-3. Using the midpoint formula, calculate the absolute value of the price elasticity of demand betweene and f. Student Answer: 0.32 2.5 3.125 0.4 Points Received: 1 of 1 Comments: 6. Question: The explicit cost of production is also called Student Answer: variable cost. accounting cost. direct cost. overhead cost. Points Received: 1 of 1 Comments: 7. Question: The marginal rate of technical substitution is measured by Student Answer: the slope of the isoquant. the relative input prices. the slope of the isocost line. the ratio of the product's price to the product's cost of production. Points Received: 1 of 1 Comments: 8. Question: Higher isocost lines correspond to higher Student Answer: profits. total costs of production. input prices. sales revenue. Points Received: 1 of 1 Comments: 9. Question: The long run average cost curve shows Student Answer: the lowest average cost of producing every level of output in the long run. where the most profitable level of output occurs. the average cost of producing where diminishing returns are not present. the plant size or scale that the firm should build. Points Received: 1 of 1 Comments: 10. Question: The difference between technology and technological change is that Student Answer: technology refers to the processes used by a firm to transform inputs into output while technological change is a change in a firm's ability to produce a given level of output with a given quantity of inputs. technology is carried out by firms producing physical goods but technological change is an intellectual exercise into seeking ways to improve production. technology is product-centered, that is, developing new products with our limited resources while technological change is process-centered in that it focuses on developing new production techniques. technology involves the use of capital equipment while technological change requires the use of brain power. Points Received: 1 of 1 Comments

 

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