Assume the demand function for good X can be written as Qd = 80 – 3Px + 2Py + 10I, where Px = the price of X, Py = the price of good Y, and I = Consumer income. According to this equation: A) a rise in the price of Y would cause the demand […]
Date: September 10th, 2020
An increase in the number of buyers in the market for LED TVs would cause the market demand curve for LED TVs to: A) shift right. B) shift left. C) stay the same because market demand doesn’t depend on the number of buyers. D) shift left or right depending on whether the new buyers purchase […]
Date: September 10th, 2020
The role of the currency exchange rate is embedded in the import expenditure equation as: A) autonomous import spending. B) marginal propensity to import. C) autonomous export spending. D) none of the above. ANSWER A
Date: September 10th, 2020
Assume a firm produces 500 units of a good by using two inputs, capital and labor, whose per unit prices are $10 and $4. Assume also that the marginal physical product of the last unit of capital is 30 and the marginal physical product of the last unit of labor is 10. Is this firm […]
Date: September 10th, 2020
According to the kinked demand curve model, regardless of whether a firm increases or decreases price, its total revenues will decrease as a result of the price change. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Assuming the demand curve in question is downward sloping, the calculated price elasticity of demand will always be negative. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
All else constant, all of the following would cause the demand curve for a good to shift except: A) a change in the cost of producing the good. B) a change in the price of a related good. C) a change in consumer’s incomes. D) a change in the number of buyers. ANSWER A
Date: September 10th, 2020
When calculating the price elasticity of demand, it is assumed that all of the other determinants of demand are to be held constant. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
If the price of salmon increases relative to the price of cod, the demand for: A) cod will decrease. B) cod will increase. C) salmon will decrease. D) salmon will increase. ANSWER B
Date: September 10th, 2020
The slope of the isocost line: A) changes as the combination of labor and capital is altered by the firm. B) is equal to the ratio of the marginal productivities at all points along the isocost line. C) is equal to the negative of the ratio of the prices of the outputs. D) is equal […]
Date: September 10th, 2020
