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Question;25.During the;last few decades in the United States, health officials have argued that eating;too much beef might be harmful to human health. As a result there has been a;significant decrease in the amount of beef produced. Which of the following;best explains the decrease in production?;a.Beef;producers, concerned about the health of their consumers, decide;to produce relatively less beef.;b.Government;officials, concerned about consumers health, ordered beef;producers to produce relatively less beef.;c.Individual;consumers, concerned about their own health, decreased their;demand for beef, which lower the price of beef, making it less;attractive to;produce.;d.Anti?beef;protesters have made it difficult for both buyers and sellers of beef to;meet in the marketplace;26.A consumer;has preferences over two goods: pizza and beer. The four bundles shown in the table;below lie on the same indifference curve for the consumer.;Bundle Pizza Beer;A 2 8;B 2 2;C 9 2;D 6 2;Which of the following statements regarding these bundles is correct?;a.The goods;are perfect substitutes for this consumer.;b.The goods;are perfect complements for this consumer.;c.These;bundles violate the property that indifference curves are bowed inward.;d.These;bundles violate the property that indifference curves do not cross.;27.Demand;curve for normal goods slope downward because;a.the;substitution effect of a price change is greater than the income effect.;b.substitution;and income effects work in the same direction.;c.the income;effect is greater than the substitution effect.;d.None of the;above, demand curve for normal goods slope upward.;28.You are in;charge of the local city?owned golf course. You need to increase the revenue;generated by the golf course in order to meet the expenses. The mayor;advises you to increase the price of around of golf. The city manager;recommends;reducing the price of a round of golf. You realize thata.the mayor thinks demand is elastic and the city manager thinks demand;Is inelastic;b.both the;mayor and city manager think that demand is elastic;c.both the;mayor and city manager think that demand is inelastic;d.the mayor;thinks demand is inelastic and the city manager thinks demand is;elastic;29.For;perfectly competitive firms, what is the relationship between market price (P);average revenue (AR), and marginal revenue (MR)?;a.P = AR = MR;b.P > AR =;MR;c.P = AR >;MR;d.P = AR ATC.;d.Firms keep;some surplus output on hand in case there is a shift in the demand;for their product.;33.A;free?rider problem exists for any good that is NOT;a.rival.;b.a private;good.;;d.excludable.;34.A reduction;in a monopolist's fixed costs would;a.decrease;the profit?maximizing price and increase the profit?maximizing quantity;produced.;b.increase;the profit?maximizing price and decrease the profit?maximizing quantity;produced.;c.not effect;the profit?maximizing price or quantity.;d.possibly;increase, decrease or not effect profit?maximizing price and quantity;depending on the elasticity of demand.;35.A consumer;is currently spending all of her available income on two goods: music CDs and DVDs.;At her current consumption bundle she is spending twice as much on CDs as she;is on DVDs. If the consumer has $120 of income and is consuming 10 CDs and 2;DVDs, what is the price of a CD?;a.$4;b.$8;c.$12;d.$20;36.The accountants hired by Davis Golf;Course have determined total fixed cost to be $75,000, total variable cost to;be $130,000, and total revenue to be $145,000. Because of this information, in the;short run, Davis Golf Course should;a.shut?down.;b.exit the;industry.;c.stay open;because shutting down would be more expensive.;d.stay open;because the firm is making an economic profit.


Paper#57947 | Written in 18-Jul-2015

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