20.) The coefficient of the price elasticity of demand for ELECTRICITY is Less t
ID: 1213259 • Letter: 2
Question
20.) The coefficient of the price elasticity of demand for ELECTRICITY is
Less than or below one (<1)
Equal to one (=1)
Greater than or above one (>1)
21.) If you were a manager of a business selling ELECTRICITY, what would happen to your GROSS REVENUES if you RAISED the price of this product per kilowatt-hour?
Gross revenues would DECREASE if the price of electricity were increased
Gross revenues would REMAIN THE SAME if the price of electricity were increased
Gross revenues would INCREASE if the price of electricity were increased
22.) Which situation is consistent with the law of diminishing marginal utility?
Henry's marginal utility from eating pizza reaches a maximum when total utility is zero
Henry's marginal utility from eating pizza becomes positive after eating three slices
The more pizza Henry eats, the more he enjoys another slice
The more pizza Henry eats, the less he enjoys another slice
23.) ECONOMIES of scale have occurred when
Costs per unit INCREASE when quantity produced is INCREASING
Costs per unit DECREASE when quantity produced is INCREASING
Total fixed costs INCREASE when quantity produced is INCREASING
Marginal costs INCREASE when quantity produced is INCREASING
26.)
Your local water department (probably the City of Cleveland Division of Water) provides "running" water service to your residence. The water department is best described as
Pure competition
Monopolistic competition
Oligopoly
Pure monopoly
27.) The breakfast cereal business is dominated by a few large producers (including Kellogg's, General Mills, and Post). The cereal industry is best described as
Pure competition
Monopolistic competition
Oligopoly
Pure monopoly
28.)
If an industry has a tremendous (that's very large) number of sellers selling a standardized product, that industry is best described as
Pure competition
Monopolistic competition
Oligopoly
Pure monopoly
A.Less than or below one (<1)
B.Equal to one (=1)
C.Greater than or above one (>1)
Explanation / Answer
20) Price elsticity of demand for electricity is perfectly inelastic because it is a necessary good.There is no change in consumption if price of electricity increase or decrease.So the answer will be a) Less than or below one (<1).
21) As electricity is a necessary good so consumer always consumes his/her optimum level of that good irrespective of its price.So it the price of electricity raises then c) Gross revenues would INCREASE if the price of electricity were increased.
22) Law of diminishing utility suggests that at first marginal utility from a good iscreased with its consumption but after a certain point consumption of one extra unit of a good has negative marginal utility.So the right answer of this question will be the more pizza Henry eats, the less he enjoys another slice.But there is no as such answers in this question and others which are there are not answe of this question.
23) ECONOMIES of scale have occurred when cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output. So the answer will be b) Costs per unit DECREASE when quantity produced is INCREASING.
26) Your local water department (probably the City of Cleveland Division of Water) provides "running" water service to your residence. The water department is best described as Pure monopoly market because they are the only provider of "running" water in the city.
27) The breakfast cereal business is dominated by a few large producers (including Kellogg's, General Mills, and Post). The cereal industry is best described as monopolistic competitive market. Because every company has produced differentiated cereals using there unique technology.So products are highly differentiated.
28) If an industry has a tremendous (that's very large) number of sellers selling a standardized product, that industry is best described as Pure competitive market. This is because in Pure competition market has a broad range of competitors who are selling the same products.
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