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Economics HomeWork mcq

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Question;21. The price;elasticity of demand coefficient measures;A) buyer;responsiveness to price changes.;B) the;extent to which a demand curve shifts as incomes change.;C) the slope;of the demand curve.;D) how far;business executives can stretch their fixed costs.;22. The basic;formula for the price elasticity of demand coefficient is;A) absolute;decline in quantity demanded/absolute increase in price.;B) percentage;change in quantity demanded/percentage change in price.;C) absolute;decline in price/absolute increase in quantity demanded.;D) percentage;change in price/percentage change in quantity demanded.;23. If the;price elasticity of demand for a product is 2.5, then a price cut from $2.00 to;$1.80 will;A) increase;the quantity demanded by about 2.5 percent.;B) decrease;the quantity demanded by about 2.5 percent.;C) increase;the quantity demanded by about 25 percent.;D) increase;the quantity demanded by about 250 percent.;24. If the;demand for bacon is relatively elastic, a 10 percent decline in the price of;bacon will;A) decrease;the amount demanded by more than 10 percent.;B) increase;the amount demanded by more than 10 percent.;C) decrease;the amount demanded by less than 10 percent.;D) increase;the amount demanded by less than 10 percent.;25. Suppose;the price elasticity coefficients of demand are 1.43, 0.67, 1.11, and 0.29 for;products W, X, Y, and Z respectively. A 1 percent decrease in price will;increase total revenue in the case(s) of;A) W and Y. B) Y and Z. C) X and Z. D) Z and W.;26. The;Illinois Central Railroad once asked the Illinois Commerce Commission for;permission to increase its commuter rates by 20 percent. The railroad argued;that declining revenues made this rate increase essential. Opponents of the;rate increase contended that the railroad's revenues would fall because of the;rate hike. It can be concluded that;A) both;groups felt that the demand was elastic but for different reasons.;B) both;groups felt that the demand was inelastic but for different reasons.;C) the;railroad felt that the demand for passenger service was inelastic and opponents;of the rate increase felt it was elastic.;D) the;railroad felt that the demand for passenger service was elastic and opponents;of the rate increase felt it was inelastic.;27. Suppose;the price elasticity of demand for bread is 0.20. If the price of bread falls;by 10 percent, the quantity demanded will increase by;A) 2 percent;and total expenditures on bread will rise.;B) 2 percent;and total expenditures on bread will fall.;C) 20;percent and total expenditures on bread will fall.;D) 20 percent;and total expenditures on bread will rise.;28. The main;determinant of elasticity of supply is the;A) number of;close substitutes for the product available to consumers.;B) amount of;time the producer has to adjust inputs in response to a price change.;C) urgency;of consumer wants for the product.;D) number of;uses for the product.;29. It takes a;considerable amount of time to increase the production of pork. This implies;that;A) a change;in the demand for pork will not affect its price in the short run.;B) the;short-run supply curve for pork is less elastic than the long-run supply curve;for pork.;C) an;increase in the demand for pork will elicit a larger supply response in the;short run than in the long run.;D) the;long-run supply curve for pork is less elastic than the short-run supply curve;for pork.;Use the following to answer questions 30-32;30. Refer to;the above information and assume the stadium capacity is 5000. If the sports;team?s management charges $9 per ticket;A) some fans;who want to see the game will find that tickets are not available.;B) there;will be 2,000 empty seats.;C) there will;be 1,000 empty seats.;D) the game;will be sold out.;31. Refer to;the above information and assume the stadium capacity is 5000. If the sports;team?s management wanted a full house for the game, it would;A) set price;so as to maximize its total revenue.;B) encourage;scalpers to sell their tickets for more than $7.;C) set;ticket prices at $5.;D) set ticket;prices at $9.;32. Refer to;the above information. If the sports team?s management wanted to maximize total;revenue from the game, it would set the ticket price at;A) $5. B) $7. C) $9. D) $13.;33. If the;income elasticity of demand for lard is -3.00, this means that;A) lard is a;substitute for butter.;B) lard is a;normal good.;C) lard is;an inferior good.;D) more lard;will be purchased when its price falls.;34. People are;charged for an additional can of soda they get from a soda machine, but are not;charged for an additional newspaper taken from a traditional dispensing box.;The marginal utility of an additional;A. Soda is close to zero, but the marginal utility of an;additional paper diminishes slowly;B. Soda diminishes slowly, but the marginal utility of an;additional paper is close to zero;C. Soda increases by more than that of the newspaper as c

 

Paper#57197 | Written in 18-Jul-2015

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