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Question;ECO 561 Week 1 Knowledge Check;1. Revenue increases when;A. producer;surplus increases;B. producer;surplus decreases;C. consumer;surplus increases;D. consumer;surplus decreases;2. An increase in the price of an;inelastic good;A. decreases;revenues;B. decreases the;percentage change in quantity less than the percentage change in price;C. increases;revenues;D. increases the;percentage change in quantity more than the percentage change in price;3. Price elasticity of Demand;increases when;A. the number of;complementary goods decreases;B. the number of;substitute goods decreases;C. people become;more price sensitive over time;D. people become;less price sensitive over time;4. The purpose of a market in a market;system is to;A. allow;government to control what is sold;B. set;constraints between buyers and sellers;C. bring buyers;and sellers into contact;D. allow an;organization to set prices in relation to their products;5. By specializing in the production;of one good, a company is able to benefit from economies of scale which;increases its revenue. Which of the following is an attribute of;specialization?;A. Reducing;costs by creating a surplus;B. Saving time;by allowing a worker to focus on one task;C. Encouraging;workers to learn new skills;D. Encouraging;workers to learn a number of different skills;6. The market system promotes progress;by;A. creating;incentive to continue to do things in the same way;B. restricting;the amount of capital directed to specific goods;C. slowly;adjusting to changes in the prices of resources;D. providing;incentive for technological advances;7. Productive efficiency is achieved;when;A. the most;valued combination of resources is used;B. the best;technology is used;C. when;production occurs at a fair cost per unit;D. fewer resources;are left for production of other goods;8. The market is said to be in;equilibrium when;A. there is;potential for a shortage but not a surplus;B. there is;potential for a surplus but not a shortage;C. neither a;shortage nor a surplus exists;D. the quantity;sold equals the quantity purchased;9. The market will move to a higher;equilibrium price if;A. the decrease;in supply is equal to the decrease in demand;B. the increase;in supply is greater than the increase in demand;C. the decrease;in demand is greater than the decrease in supply;D. the increase;in demand is greater than the increase in supply;10. The intersection of supply and;demand will be at a lower equilibrium price but a higher equilibrium quantity;if;A. supply is;constant and demand increases;B. supply is;constant and demand decreases;C. demand is;constant and supply decreases;D. demand is;constant and supply increases;11. When a price ceiling occurs;A. the market;price will be lower than the equilibrium price;B. the market;price will be higher than the equilibrium price;C. the supply;will exceed the demand;D. buyers will;not be willing to pay more than the ceiling price;12. Because the goals of firms;entrepreneurs, and workers have different incentives, which of the following principles;applies?;A. Self-interest;B. Invisible;hand;C. Moral hazard;D. Free;enterprise


Paper#55318 | Written in 18-Jul-2015

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