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economics mcq homework with A+ answers




Question;1) If the government places a price ceiling at $10, the price and quantity sold will beA) $10, 50B) $6, 100C) $2, 150D) $10, 150(The answer is B why?)2) A subsidy is sometimes used by the government to correct the problems associated withA) Negative externalitiesB) Positive externalitiesC) Public goodsD) Monopolies(The answer is B why?)3) The producer of pork bellies is dumping waste in the river next to the plant. This is an example ofA) A positive externalityB) A negative externalityC) A free riderD) Good business practice(The answer is B why?)4) The Problem associated with this situation isA) Over-allocation of resources to the production of pork belliesB) Under-allocation of resources to the production of pork belliesC) The proper allocation of resources to the production of pork belliesD) Resource allocation is not involved with this situation(The answer is A why?)5) If the government takes action to correct this situation, the correct action leads toA) An increase in supply, Pe decreases and Qe increasesB) A decrease in supply, Pe increases and Qe decreasesC) An increase in demand, Pe and Qe increaseD) A decrease in demand, Pe and Qe decrease(The answer is B why?)6) The distinguishing characteristic of a public good isA) Noncompetitive productionB) DurabilityC) ExclusivityD) Nonrivalrous consumption(The answer is D why?)7) A free-rider is someone whoA) Sneaks into a movie theatre without paying for the ticketB) Enjoys the flowers I have planted and does not compensate me for themC) Creates a negative externalityD) Someone who buys a ticket for a movie(The answer is B why?)8) In comparing import quotas with import tariffs, which of the following statements is true?A) Quotas benefit exporters in the same way that tariffs doB) A quota generates government tax revenueC) A tariff raises the worldwide price of the goodD) With a quota, both domestic and foreign producers receive the higher price for goods sold in thedomestic marketE) With either quotas or tariffs, domestic consumers pay a higher price but enjoy greater quantitiesof the good(The answer is D why?)9) Given the statement, If the price of new textbooks increases, more used textbooks will bepurchased, which elasticity would you use to validate the statement?A) Price elasticity of new textbooksB) Price elasticity of used textbooksC) Income elasticityD) Cross-price elasticity(The answer is D why?)10) If the price elasticity of demand is -2, that meansA) If price increases by 20%, sales will fall by 10%B) If price increases by 20%, sales will fall by 40%C) If price decreases by 20%, sales will increase 10%D) Both a and c are correct(The answer is B why?)11) I have discovered that when Circuit City increased the price of their laptops by 10 percent, thequantity demanded of laptops fell by 20 percent. Which of the following statements is accurateconcerning Circuit Citys price elasticity of laptops?A) Every 1 percent increase in the price of laptops causes the demand for laptops to decrease by 2percentB) Every 1 percent increase in the price of laptops causes the supply of laptops to increase by 2percentC) Every 2 percent change in the price of laptops causes a 1 percent change in the quantitydemanded for laptopsD) The demand for laptops is elastic(The answer is D why?)12) Which of the following goods is likely to have demand that is price-elastic?A) CigarettesB) InsulinC) CocaineD) Kraft macaroni and cheese dinner(The answer is D why?)13) A perfectly inelastic demand would imply what kind of demand curve?A) HorizontalB) VerticalC) Upward slopingD) Downward sloping(The answer is B why?)14) Which of the following would be true if the demand for a good was inelastic?A) The good is a large share of the consumers budgetB) The shorter the time periodC) The good has many substitutesD) The good is a luxury(The answer is B why?)15) If the slope of a downward sloping linear demand curve is constant, then we know thatA) Elasticity of demand is also elastic everywhereB) Elasticity of demand is constant and elasticC) Elasticity of demand is inelastic everywhereD) Elasticity of demand varies along the demand curve(The answer is D why?)16) The price of lawn care service just increased by 10% and suppliers have decided to double thequantity supplied. Then the elasticity of supply would beA) 50B) 100C) 10D) It is impossible to tell(The answer is C why?)17) The price elasticity of demand for cell phones is -1.45, if the government put an excise tax on cellphones, who would bear the majority of the tax burden?A) ConsumersB) ProducersC) Neither consumers or producersD) It is wrong for the government to place a tax on cell phones(The answer is B why?)18) The price elasticity of demand for eggs has been estimated to be -0.57. If price increases from$1.00 to $1.50 in a period, how will that affect quantity demanded for eggs in that period, all otherthings unchanged?A) Quantity demanded will increase by about 0.23 percentB) Quantity demanded will increase by about 2.3 percentC) Quantity demanded will decrease by about 0.23 percentD) Quantity demanded will decrease by about 2.3 percent(The answer is C why?)19) Stay with the above question. Total revenue for the egg producer will ------ after the price changesA) IncreaseB) DecreaseC) Stay the sameD) It is impossible to tell(The answer is A why?)20) John just drank another Snapple and his total utility decreased. This means that Johns marginalutility for this additional bottle of Snapple isA) PositiveB) NegativeC) ZeroD) Not determinable without more information(The answer is B why?)21) Which of the following is not consistent with the law of diminishing marginal utility?A) Newspaper vending machines are not as secure as soft drink machinesB) A student selects to eat at an all-you-can-eat restaurant rather than at a restaurant that charges forrefillsC) A students enjoyment of opera increases the more she listens to itD) A symphony has free throat lozenges in their lobby(The answer is C why?)22) When the Clippers runs its dime-a-dog night, ceteris paribus, my purchasing power increasesgiving me the ability to purchase more hotdogs, this is an example ofA) The substitution effectB) The law of diminishing marginal utilityC) The income effectD) The law of total utility(The answer is C why?)23) John gets 20 utils for the last unit of Good A and for the last unit of Good B consumed he gets 10utils. The price of Good A is $1. The price of Good B is $10. If john wants to maximize his utility heshouldA) Continue to purchase the same amount of Good A and Good BB) Increase the consumption of Good A and decrease the consumption of Good BC) Decrease the consumption of Good A and increase the consumption of Good BD) Decrease the consumption of Good A and decrease the consumption of Good B(The answer is B why?)24) If a consumer buys more of good X and less of good Y, the ----- of good X will -----, and the ----of good Y will -----.A) Marginal utility, fall, marginal utility, riseB) Marginal utility, rise, marginal utility, fallC) Total utility, fall, marginal utility, riseD) Marginal utility, rise, total utility, rise(The answer is A why?)25) Implicit costs (opportunity costs) are not excluded from which type of profit?A) Economic profitB) Each firms profitC) Accounting profitD) All types of profit(The answer is C why?)26) Suppose that Eminem decides to perform is Chicagos Grand Park. The concert promoters rightlybelieve that the only way the concert can be given in the park is if the concert is free. This conclusionis based on the assumption that the concert would beA) Excludable in consumptionB) Nonexcludable in consumptionC) Both excludable and nonexcludableD) A private good(The answer is B why?)27) Market failuresA) Are usually caused by government interference in the economyB) Prevent the price system from attaining economic efficiencyC) Encourage people to purchase more of a good than they really wantD) Encourage businesses to produce more of a good than they really want(The answer is B why?)28) One way to reduce exports is toA) Base trade on comparative advantageB) Base trade on opportunity costsC) Trade with poor countriesD) Restrict imports(The answer is D why?)


Paper#55521 | Written in 18-Jul-2015

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