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##### devry eco312 quiz 2 spring 2014

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Question;Question 1.1.(TCO 2) In presenting the idea of a demand curve, economists presume that the most important variable in determining the quantity demanded is(Points: 1) the price of the product itself.consumer income.the prices of related goods.consumer tastes.Question 2.2.(TCO 2) In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by(Points: 1) an increase in the cost of making donuts.an increase in the price of coffee.consumers expecting donut prices to fall.a change in buyer tastes.Question 3.3.(TCO 2) College students living off campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start their careers, their consumption of both goods frequently declines. This suggests that ramen noodles and boxed macaroni and cheese are(Points: 1) inferior goods.normal goods.complementary goods.substitute goods.Question 4.4.(TCO 2) Suppose that tacos and pizza are substitutes and that soda and pizza are complements. We would expect an increase in the price of pizza to(Points: 1) reduce the demand for tacos and increase the demand for sodas.reduce the demand for soda and increase the demand for tacos.increase the demand for both soda and tacos.reduce the demand for both soda and tacos.Question 5.5.(TCO 2) Increasing marginal cost of production explains(Points: 1) the law of demand.the income effect.why the supply curve is upsloping.why the demand curve is downsloping.Question 6.6.(TCO 2) If the demand for bacon is relatively elastic, a 10% decline in the price of bacon will(Points: 1) decrease the amount demanded by more than 10%.increase the amount demanded by more than 10%.decrease the amount demanded by less than 10%.increase the amount demanded by less than 10%.Question 7.7.(TCO 2) The price of product X is reduced from \$100 to \$90 and, as a result, the quantity demanded increases from 50 to 60 units. Therefore, demand for X in this price range(Points: 1) has declined.is of unit elasticity.is inelastic.is elastic.Question 8.8.(TCO 2) A firm can sell as much as it wants at a constant price. Demand is thus(Points: 1) perfectly inelastic.perfectly elastic.relatively inelastic.relatively elastic.Question 9.9.(TCO 2) The demand schedules for such products as eggs, bread, and electricity tend to be(Points: 1) perfectly price elastic.of unit price elasticity.relatively price inelastic.relatively price elastic.Question 10.10.(TCO 2) The demand for a necessity whose cost is a small portion of one's total income is(Points: 1) perfectly price inelastic.perfectly price elastic.relatively price inelastic.relatively price elastic.Question 11.11.(TCO 2) What is the Law of;Supply? Why does the supply curve slope upwards? (Points: 5)Question 12.12.(TCO 2) Suppose the price of;widgets falls from \$7 to \$5 and consumption of widgets rises from 15 widgets a;month to 25 widgets. Calculate your price elasticity of demand of widgets. What;can you say about your price elasticity of demand of widgets? Is it Elastic;Inelastic, or Unitary Elastic? Why? Use the Midpoint formula and please show;your work. (Points;5)

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