Question 1

-The above figure shows the demand curve for crude oil.The demand curve has unitary price elasticity when price equals

Accepted Answer

A)  $0. 
B)  $1. 
C)  $10. 
D)  $20. 
A)  $0. 
B)  $1. 
C)  $10. 
D)  $20.

Question 2

For the following, please answer "True" or "False" and explain why.
-The short-run price elasticity of demand for refrigerators is relatively inelastic.

Accepted Answer

A) True 
 B)False

Question 3

If a good has an income elasticity of demand greater than one,one might classify that good as

Accepted Answer

A)  a necessity. 
B)  a luxury. 
C)  unusual. 
D)  inelastic. 
A)  a necessity. 
B)  a luxury. 
C)  unusual. 
D)  inelastic.

Question 4

-The above figure shows the demand curve for crude oil.If the market price is $10 a barrel,what is the price elasticity of demand?

Accepted Answer

A)  -.02 
B)  -1 
C)  -10 
D)  -500 
A)  -.02 
B)  -1 
C)  -10 
D)  -500

Question 5

Suppose there are 100 identical firms in the rag industry,and each firm is willing to supply 10 rags at any price.The market supply curve will be a(n)

Accepted Answer

A)  vertical line where Q = 10. 
B)  vertical line where Q = 100. 
C)  vertical line where Q = 1000. 
D)  horizontal line where Q = 1000. 
A)  vertical line where Q = 10. 
B)  vertical line where Q = 100. 
C)  vertical line where Q = 1000. 
D)  horizontal line where Q = 1000.

Question 6

Consider the demand function Qd = 150 - 2P.The effects of other determinants of Qd is reflected in

Accepted Answer

A)  the intercept of the function. 
B)  the slope of the function. 
C)  neither the slope nor the intercept of the function. 
D)  in both the slope and the intercept of the function. 
A)  the intercept of the function. 
B)  the slope of the function. 
C)  neither the slope nor the intercept of the function. 
D)  in both the slope and the intercept of the function.

Question 7

If the demand curve for orange juice is expressed as Q = 2000 - 500p,where Q is measured in gallons and p is measured in dollars,then at the price of $3,elasticity equals

Accepted Answer

A)  -0.33. 
B)  -3. 
C)  -9. 
D)  -17. 
A)  -0.33. 
B)  -3. 
C)  -9. 
D)  -17.

Question 8

For the following, please answer "True" or "False" and explain why.
-When the price of beef rises,consumers switch consumption to substitutes such as chicken and fish,thereby decreasing the demand for beef.

Accepted Answer

A) True 
 B)False

Question 9

For the following, please answer "True" or "False" and explain why.
-In the case of a linear demand curve,demand becomes more price elastic as price increases.

Accepted Answer

A) True 
 B)False

Question 10

If the price of orange juice rises 10%,and as a result the quantity demanded falls by 8%,the price elasticity of demand for orange juice is

Accepted Answer

A)  -1.25. 
B)  inelastic. 
C)  Both A and B above. 
D)  Neither A nor B above. 
A)  -1.25. 
B)  inelastic. 
C)  Both A and B above. 
D)  Neither A nor B above.

Question 11

Explain why the equilibrium price is called the market clearing price.

Accepted Answer

At the equilibrium price,selle

Question 12

If the demand function for orange juice is expressed as Q = 2000 - 500p,where Q is quantity in gallons and p is price per gallon measured in dollars,then the demand for orange juice has a unitary elasticity when price equals

Accepted Answer

A)  $0. 
B)  $1. 
C)  $2. 
D)  $4. 
A)  $0. 
B)  $1. 
C)  $2. 
D)  $4.

Question 13

Suppose the market for grass seed can be expressed as:
Demand: Qᴰ = 100 - 2p
Supply: Qˢ = 3p
If government imposes a $5 specific tax to be collected from sellers,what is the price consumers will pay? How much tax revenue is collected? What fraction is paid by sellers?

Accepted Answer

At equilibrium without the tax,p = 20 an

Question 14

Explain why the shape of the demand curve will determine the how a shock to the market equilibrium affect price and quantity.

Accepted Answer

A flatter demand curve has a smaller slo

Question 15

To determine the total demand for all consumers,sum the quantity each consumer demands

Accepted Answer

A)  at a given price. 
B)  at all prices and then sum this amount across all consumers. 
C)  Both A and B will generate the same total demand. 
D)  None of the above 
A)  at a given price. 
B)  at all prices and then sum this amount across all consumers. 
C)  Both A and B will generate the same total demand. 
D)  None of the above

Question 16

Suppose the demand for a particular product can be expressed as Q = 100/p.Calculate the total amount spent on this good when p = 10,20,and 50.Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

Accepted Answer

In all cases,total expenditure equals 10

Question 17

-The above figure shows the market for crude oil.If a consumer group convinces the government to set a maximum price of $2 per barrel,then

Accepted Answer

A)  300 barrels of crude oil will be sold at $2. 
B)  zero barrels of crude oil will be sold. 
C)  zero barrels of crude oil will be demanded. 
D)  None of the above. 
A)  300 barrels of crude oil will be sold at $2. 
B)  zero barrels of crude oil will be sold. 
C)  zero barrels of crude oil will be demanded. 
D)  None of the above.

Question 18

Consider the demand functions:
A. Qd = 250 - 2P
B. Qd = 300 - 3P Which of the demand functions reflects a higher level of consumer incomes?

Accepted Answer

A)  A 
B)  B 
C)  A and B reflect the same consumer incomes. 
D)  More information is needed. 
A)  A 
B)  B 
C)  A and B reflect the same consumer incomes. 
D)  More information is needed.

Question 19

If the demand curve for comic books is expressed as Q = 10,000/p,then demand has a unitary elasticity

Accepted Answer

A)  only when p = 10,000. 
B)  only when p = 100. 
C)  always. 
D)  never. 
A)  only when p = 10,000. 
B)  only when p = 100. 
C)  always. 
D)  never.

Question 20

Suppose the demand for widgets is given by QD = 100 - 5p - pd + 2I,where I is average consumer income,p is the price of lemons,and pd is the price of doodads.According to this equation,doodads are a(n)________ for widgets.

Accepted Answer

A)  substitute 
B)  complement 
C)  input 
D)  None of the above. 
A)  substitute 
B)  complement 
C)  input 
D)  None of the above.

-The above figure shows the demand curve for crude oil.The demand curve has unitary price elasticity when price equals

For the following, please answer "True" or "False" and explain why. -The short-run price elasticity of demand for refrigerators is relatively inelastic.

If a good has an income elasticity of demand greater than one,one might classify that good as

-The above figure shows the demand curve for crude oil.If the market price is $10 a barrel,what is the price elasticity of demand?

Suppose there are 100 identical firms in the rag industry,and each firm is willing to supply 10 rags at any price.The market supply curve will be a(n)

Consider the demand function Qd = 150 - 2P.The effects of other determinants of Qd is reflected in

If the demand curve for orange juice is expressed as Q = 2000 - 500p,where Q is measured in gallons and p is measured in dollars,then at the price of $3,elasticity equals

For the following, please answer "True" or "False" and explain why. -When the price of beef rises,consumers switch consumption to substitutes such as chicken and fish,thereby decreasing the demand for beef.

For the following, please answer "True" or "False" and explain why. -In the case of a linear demand curve,demand becomes more price elastic as price increases.

If the price of orange juice rises 10%,and as a result the quantity demanded falls by 8%,the price elasticity of demand for orange juice is

Explain why the equilibrium price is called the market clearing price.

If the demand function for orange juice is expressed as Q = 2000 - 500p,where Q is quantity in gallons and p is price per gallon measured in dollars,then the demand for orange juice has a unitary elasticity when price equals

Suppose the market for grass seed can be expressed as: Demand: Qᴰ = 100 - 2p Supply: Qˢ = 3p If government imposes a $5 specific tax to be collected from sellers,what is the price consumers will pay? How much tax revenue is collected? What fraction is paid by sellers?

Explain why the shape of the demand curve will determine the how a shock to the market equilibrium affect price and quantity.

To determine the total demand for all consumers,sum the quantity each consumer demands

Suppose the demand for a particular product can be expressed as Q = 100/p.Calculate the total amount spent on this good when p = 10,20,and 50.Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

-The above figure shows the market for crude oil.If a consumer group convinces the government to set a maximum price of $2 per barrel,then

Consider the demand functions: A. Qd = 250 - 2P B. Qd = 300 - 3P Which of the demand functions reflects a higher level of consumer incomes?

If the demand curve for comic books is expressed as Q = 10,000/p,then demand has a unitary elasticity

Suppose the demand for widgets is given by QD = 100 - 5p - pd + 2I,where I is average consumer income,p is the price of lemons,and pd is the price of doodads.According to this equation,doodads are a(n)________ for widgets.

Introduction

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, externalities, rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 2: Supply and Demand

-The above figure shows the demand curve for crude oil.The demand curve has unitary price elasticity when price equals

For the following, please answer "True" or "False" and explain why. -The short-run price elasticity of demand for refrigerators is relatively inelastic.

If a good has an income elasticity of demand greater than one,one might classify that good as

-The above figure shows the demand curve for crude oil.If the market price is $10 a barrel,what is the price elasticity of demand?

Suppose there are 100 identical firms in the rag industry,and each firm is willing to supply 10 rags at any price.The market supply curve will be a(n)

Consider the demand function Qd = 150 - 2P.The effects of other determinants of Qd is reflected in

If the demand curve for orange juice is expressed as Q = 2000 - 500p,where Q is measured in gallons and p is measured in dollars,then at the price of $3,elasticity equals

For the following, please answer "True" or "False" and explain why. -When the price of beef rises,consumers switch consumption to substitutes such as chicken and fish,thereby decreasing the demand for beef.

For the following, please answer "True" or "False" and explain why. -In the case of a linear demand curve,demand becomes more price elastic as price increases.

If the price of orange juice rises 10%,and as a result the quantity demanded falls by 8%,the price elasticity of demand for orange juice is

Explain why the equilibrium price is called the market clearing price.

If the demand function for orange juice is expressed as Q = 2000 - 500p,where Q is quantity in gallons and p is price per gallon measured in dollars,then the demand for orange juice has a unitary elasticity when price equals

Suppose the market for grass seed can be expressed as: Demand: Qᴰ = 100 - 2p Supply: Qˢ = 3p If government imposes a $5 specific tax to be collected from sellers,what is the price consumers will pay? How much tax revenue is collected? What fraction is paid by sellers?

Explain why the shape of the demand curve will determine the how a shock to the market equilibrium affect price and quantity.

To determine the total demand for all consumers,sum the quantity each consumer demands

Suppose the demand for a particular product can be expressed as Q = 100/p.Calculate the total amount spent on this good when p = 10,20,and 50.Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

-The above figure shows the market for crude oil.If a consumer group convinces the government to set a maximum price of $2 per barrel,then

Consider the demand functions: A. Qd = 250 - 2P B. Qd = 300 - 3P Which of the demand functions reflects a higher level of consumer incomes?

If the demand curve for comic books is expressed as Q = 10,000/p,then demand has a unitary elasticity

Suppose the demand for widgets is given by QD = 100 - 5p - pd + 2I,where I is average consumer income,p is the price of lemons,and pd is the price of doodads.According to this equation,doodads are a(n)________ for widgets.

Introduction

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, externalities, rivalry, and Exclusion

Asymmetric Information

Contracts and Moral Hazards

Filters