Price elasticity of demand measures the A) slope of the demand curve. B) sensitivity of quantity demanded to changes in the price of substitute goods. C) sensitivity of price to changes in the quantity demanded of substitute goods. D) sensitivity of quantity demanded to changes in price. ANSWER D
Date: September 9th, 2020
Some high-end retail stores that distribute mail-order catalogs will prominently offer some very high priced goods for sale (for example, a luxury sports car with gold-plated interior trim) in addition to their regular line of merchandise. Behavioral economists argue that the stores do not really plan to sell these goods, but they use these items […]
Date: September 9th, 2020
The production function in Scenario 7.3 exhibits: A) decreasing returns to scale. B) constant returns to scale. C) increasing returns to scale. D) all of the above at various levels of output. ANSWER B
Date: September 9th, 2020
Refer to Figure 9.8. With no government interference, the country pictured will A) import 500 tons of sugar. B) import 300 tons of sugar. C) import 200 tons of sugar. D) import no sugar. E) export sugar. ANSWER B
Date: September 9th, 2020
Melon Computer Company manufacturers its computer components in Singapore and assembles the computers intended for sale in North America in its plant in Arizona. If the U.S. reduces the corporate income tax rate next year, what is the likely outcome for Melon Computer Company? A) Reduce the transfer price for computer components and increase downstream […]
Date: September 9th, 2020
Refer to Scenario 12.2. What is the profit maximizing level of output? A) 171.43 B) 120 C) 150 D) all of the above E) none of the above ANSWER C
Date: September 9th, 2020
Which of the following is TRUE concerning equilibrium in a monopsonistic factor market? A) The firm uses the efficient level of the input but does not maximize profit. B) The firm maximizes profit but does not use the efficient level of the input. C) The firm maximizes profit and uses the efficient level of the […]
Date: September 9th, 2020
The egalitarian view of equity would lead to: A) equal allocations of goods across all persons. B) maximizing the utility of the least-well-off person. C) maximizing the total utility of all society members. D) none of the above ANSWER A
Date: September 9th, 2020
As a group, U.S. consumers have no income response for their consumption of ice cream so that the income elasticity of demand for ice cream equals zero. Does this mean that the change in ice cream consumption that results from a price increase is entirely composed of the substitution effect? A) Yes, the income effect […]
Date: September 9th, 2020
Refer to Scenario 7.2. What is the marginal cost of the 60th earthquake detector? A) 0 B) 5 1/2 C) 3 D) 5 E) none of the above ANSWER C
Date: September 9th, 2020
