ECON312 Week 2 Quiz Latest 2022

ECON312 Week 2: Connect Quiz

If products A and B are complements and the price of B decreases, the

Multiple Choice

•             demand curves for both A and B will shift to the left.

 •            amount of B purchased will increase, but the demand curve for A will not shift.

 •            demand for A will increase and the quantity of B demanded will increase.

 •            demand for A will decline and the demand for B will increase.

If the price elasticity of demand for a product is equal to 0.5, then a decrease in price of 10 percent will increase quantity demanded by   

Multiple Choice

•             20 percent.

 •            0.5 percent.

 •            5 percent.

 •            0.05 percent.

The price elasticity of demand coefficient measures       

 Multiple Choice

•             buyer responsiveness to price changes.

 •            the extent to which a demand curve shifts as incomes change.

 •            the slope of the demand curve.

 •            how far business executives can stretch their fixed costs.

If the price elasticity of demand for a product is 2, then a price cut from $4.00 to $3.00 will            Multiple Choice

•             increase the quantity demanded by about 5 percent.

 •            decrease the quantity demanded by about 20 percent.

 •            increase the quantity demanded by about 50 percent.

 •            increase the quantity demanded by about 500 percent.

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?             

Multiple Choice

•             an increase in supply

 •            an increase in demand

 •            a decrease in supply

 •            a decrease in demand

Suppose product Y is an input in the production of product Z. Product Z in turn is a substitute for product X. An increase in the price of Y can be expected to            

Multiple Choice

•             increase the demand for X.

 •            decrease the demand for X.

 •            have no effect on the demand for product X.

 •            decrease the supply of X.

 •            increase the supply of X.

The total revenue received by sellers of a good is computed by Multiple Choice

•             multiplying the price times the quantity sold.

 •            adding the price and the quantity sold.

 •            multiplying the percentage change in price times the percentage change in quantity.

 •            dividing the percentage change in quantity by the percentage change in price.

Answer the question based on the given supply and demand data for wheat.

Bushels Demanded Per Month  Price Per Bushel               Bushels Supplied Per Month

45           $5           77

50           4              73

56           3              68

61           2              61

67           1              57

Equilibrium price in this market is             

Multiple Choice

 •            $2.

•             $4.

 •            $3.

 •            $1.

Surpluses drive market prices up; shortages drive them down.  True or False

If the demand for product X is inelastic, a 20 percent decrease in the price of X will          

Multiple Choice

•             decrease the quantity of X demanded by more than 20 percent.

 •            decrease the quantity of X demanded by less than 20 percent.

 •            increase the quantity of X demanded by more than 20 percent.

 •            increase the quantity of X demanded by less than 20 percent.

Suppose the income elasticity of demand for toys is +2.4. This means that           

Multiple Choice

•             a 4 percent increase in income will increase the purchase of toys by 9.6 percent.

 •            a 4 percent increase in income will increase the purchase of toys by 1.67 percent.

 •            a 4 percent increase in income will decrease the purchase of toys by 9.6 percent.

 •            toys are an inferior good.

Suppose you are given the following data on demand for a product. The price elasticity of demand (based on the midpoint formula) when price decreases from $9 to $8 is

Price      Quantity Demanded

$10         30

9              40

8              50

7              60

6              70

Multiple Choice

•             0.53.

 •            0.11.

 •            1.83.

 •            1.11

An increase in the price of a product will reduce the amount of it purchased because     

 Multiple Choice

•             the higher price will signal to consumers that the good is of low quality.

 •            the higher price means that real incomes have risen.

 •            consumers will substitute other products for the one whose price has risen. Correct

 •            consumers substitute relatively high-priced for relatively low-priced products.

The law of demand states that, other things equal,         

 Multiple Choice

•             price and quantity demanded are inversely related.

 •            the larger the number of buyers in a market, the lower will be product price.

 •            price and quantity demanded are directly related.

 •            consumers will buy more of a product at high prices than at low prices.

Refer to the above diagram for the milk market. If the price were more than $1.50 per gallon, then there would be Multiple Choice

•             equilibrium in the market.

 •            a shortage in the market.

 •            a surplus in the market.

 •            no buyers in the market.

Refer to the diagram. The equilibrium price and quantity in this market will be   

Multiple Choice

•             $1.00 and 200.

 •            $1.60 and 130.

 •            $0.50 and 130.

One can say with certainty that equilibrium price will decline when supply           

 Multiple Choice

•             and demand both decrease.

 •            increases and demand decreases.

 •            decreases and demand increases.

 •            and demand both increase.

The price of product X is reduced from $50 to $45 and, as a result, the quantity demanded increases from 120 to 140 units. Therefore, demand for X in this price range        

Multiple Choice

•             has declined.

 •            is of unit elasticity.

 •            is inelastic.

 •            is elastic.

Which of the diagrams illustrates the effect of an increase in automobile worker wages on the market for automobiles?               

Multiple Choice

 •            A only

 •            B only

 •            C only

 •            D only

College students living off-campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start careers, their consumption of both goods frequently declines. This suggests that ramen noodles and boxed macaroni and cheese are 

Multiple Choice

•             inferior goods.

 •            normal goods.

 •            complementary goods.

 •            substitute goods.