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Economics multiple choice questions

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Question;1. When a product is a necessity,a. it has few or no substitutes, and its demand will probably be elastic.b. it has many substitutes, and its demand will probably be elastic.c. it has many substitutes, and its demand will probably be inelastic.d. it has few or no substitutes, and its demand will probably be inelastic.2. When demand is more elastic, a decrease in supply will causea. equilibrium price to rise less, and equilibrium quantity to fall more.b. equilibrium price to rise less, and equilibrium quantity to fall less.c. equilibrium price to rise more, and equilibrium quantity to fall less.d. equilibrium price to rise more, and equilibrium quantity to fall more.3. The article, "Scientifically Priced Retail Goods" (NY Times, 9/2/02),uses a cold weather example to illustrate factors that influenceprices. If cold weather is approaching,a. a retailer might reduce the price of children's snow suits, to match thechange in the weather.b. a retailer might not reduce the price of soup, since people's preferencefor hot soup might increase when the weather is cold.c. a retailer might not increase the price of snow shovels, because thedemand for snow shovels is likely to increase when the weather is cold.d. a retailer might increase the price of swim suits, to make a higher profiton fewer sales.4. The article, "Isaac brings unwelcome spike in gas prices as LaborDay weekend approaches" (Washington Post, August 29, 2012)offers several reasons why gasoline prices increased at the end ofAugust. Among those reasons area. Gulf Coast refineries avoided a sudden shutdown of operations due toHurricane Isaac, inventories of gasoline were high, and people decided tostay at home during the Labor Day weekend.b. crude oil prices are falling, refineries are switching to their winter blendsof gasoline, and the demand for jet fuel has increased as a result of theLabor Day travel season.c. Gulf Coast refineries managed to remain open in spite of HurricaneIsaac, the midwest drought has raised the price of ethanol-based fuel, andmany people canceled their vacations to watch the political conventions ontelevision.d. Gulf Coast refineries shut down because of Hurricane Isaac, a crude oilpipeline to the midwest was also shut down, and there is a surge of drivingthat takes place over the holiday weekend.

 

Paper#56131 | Written in 18-Jul-2015

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