The demand for good x is very inelastic (0.06). To increase total revenue in the

Question

The demand for good x is very inelastic (0.06). To increase total revenue in the short run, the company should probably:

Increase price.

Decrease price.

Impossible to tell.

1 points   

QUESTION 11

Given the PPF below, what is the opportunity cost for 1 car?

.4 computers

2 computer

2.5 computers

5 computers

1 points   

QUESTION 12

Economists would describe the U.S. automobile industry as:

purely competitive

an oligopoly

monopolistically competitive

a pure monopoly

1 points   

QUESTION 13

If the price of good y drops relative to good x, the _________ effect suggests that the consumer will buy less of good x.

Substitution effect

Income effect

Scale effect

Wealth effect

1 points   

QUESTION 14

Countries will specialize in those goods which they

Can produce with lower inputs.

can produce at lower opportunity cost.

can produce at higher quality.

1 points   

QUESTION 15

If a tariff is imposed on an imported good, the new equilibrium price will be:

Equal to the tariff.

Equal to the equilibrium price before trade.

Equal to the world price.

Equal to the world price plus the tariff.

1 points   

QUESTION 16

Total revenue

always increases as price increases

increases as price increases, as long as demand is elastic

decreases as price increases, as long as demand is inelastic

remains unchanged as price increases when demand is unit elastic

1 points   

QUESTION 17

As consumers consume more of a good, we expect marginal utility to _________

Increase

Decrease

Remain constant.

Impossible to tell.

1 points   

QUESTION 18

Along a linear downward-sloping demand curve, the price elasticity of demand will be:

Greater than one across each price range

Less than one across each price range

Equal to zero across each price range

Different across each price range

1 points   

QUESTION 19

Monopolies tend to produce less than the market equilibrium because

their marginal revenue decreases faster than demand.

it maximizes their profit.

because they can influence the market equilibrium.

all of the above

1 points   

QUESTION 20

Good x is a new product. There are no close substitutes. Good x requires 2 extremely scarce materials as inputs. What can we say about good x?

Good x has a highly elastic demand.

Good x has a very inelastic supply.

Good x is a perfectly competitive industry.

Good x is an inferior good.

1 points   

QUESTION 21

In a competitive market, if the existing price is below the equilibrium price, market forces will drive the price:

Up and quantity supplied up

Up and quantity supplied down

Up and supply up

Down and demand down

1 points   

QUESTION 22

Two months ago, the Marbury Shirt company sold 200 shirts at $30 per shirt. Last month the company raised its price to $35 per shirt and sold 300 shirts. Evidently the company experienced a(n):

Decrease in demand

Increase in demand

Decrease in supply

Increase in supply

1 points   

QUESTION 23

Which of the following is a fixed cost in the long run?

Wages

Rent

Advertising

None of the above

1 points   

QUESTION 24

Good x has an income elasticity of -1.2 and a cross price elasticity of good y -0.9. What can we say about good x?

good x is normal and a complement of good y.

good x is normal and a substitute of good y.

good x is inferior and a complement of good y.

Good x is inferior and a substitute of good y.

1 points   

QUESTION 25

According to economic theory, consumption is really only limited by

utility

substitution effect.

budget constraint

income effect.

1 points   

QUESTION 26

A demand curve which is parallel to the vertical axis is:

perfectly inelastic

perfectly elastic

relatively inelastic

relatively elastic

A.

Increase price.

B.

Decrease price.

C.

Impossible to tell.

Explanation / Answer

10. (A) Increase price.

11. . i was not able to view the image, so i could'nt answer.

12.(B) oligopoly

13. (A) Substituion effect

14. (B)can produce at lower opportunity cost

15. (D)Equal to the world price plus the tariff.

16. (D)remains unchanged as price increases when demand is unit elastic

17.(B)Decrease

18. (A)Greater than one across each price range

19.(D)all of the above

20.(A)Good x has a highly elastic demand.

21.(A)Up and quantity supplied up

22.(D)Increase in supply

23.(B)Rent

24.(C)good x is inferior and a complement of good y.

25(C)budget constraint

26. (A)perfectly inelastic

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