ECO/365T PRINCIPLES OF MICROECONOMICS The Latest Version A+ Study Guide **********************************************
ECO 365T Entire Course Link http://www.onlinehelp123.com/ECO-365 ********************************************** ECO 365T Wk 3 - Apply Summative Assessment Quiz (2021 New) Suppose that as the price of Y falls from $12 to $10, the quantity of Y demanded increases from 500 to 600. Then the absolute value of the price elasticity (using the midpoint formula) is approximately Multiple Choice • 50. • 1.2. • 1. • 0.83.
Answer the question based on the following data. Price Per Unit Quantity Demanded Per Unit of Time $ 20 12 18 17 16 20 14 24 12 30 10 36 8 40 6 44 4 48 What is the price elasticity of demand over the range of $4 to $6?
Multiple Choice • 4.6 • 0.22 • 0.47 • 0.33
Alex, Kara, and Susie are the only three people in a community. Alex is willing to pay $20 for the fifth unit of a public good; Kara, $15; and Susie, $25. Government should produce the fifth unit of the public good if the marginal cost is less than or equal to Multiple Choice • $60. • $20. • $15. • $45. • $25.
Answer the question based on the following information for a public good. Pa and Pb are the prices that individuals A and B are willing to pay for the last unit of a public good, rather than do without it. These people are the only two members of society.
Q 1 2 3 4 5
Pa $3 2 1 0 0
Pb $5 4 3 2 1
The collective willingness of this society to pay for the second unit of this public good is Multiple Choice • $6. • $2. • $1. • $8. • $4.
If a firm finds that it can sell $32,000 worth of a product when its price is $8 per unit and $35,000
worth of it when its price is $10, then Multiple Choice • the demand for the product is inelastic in the $10-$8 price range. • the demand for the product must have increased. • elasticity of demand is 1.67. • the demand for the product is elastic in the $10-$8 price range.
Suppose the price elasticity of supply for crude oil is 1.5. How much would price have to rise to increase production by 9 percent? Multiple Choice • 6 percent • 13.5 percent • 9 percent • 15 percent
The price of season tickets to a performing arts theater decreases by 4 percent. As a result, the quantity demanded increases by 10 percent. The price elasticity of demand for season tickets is Multiple Choice • 0.4. • 4. • 2.5. • 0.25.
If the price elasticity of demand for a product is equal to 2.0, then a decrease in price of 4 percent will increase quantity demanded by Multiple Choice • 2 percent. •
0.8 percent. • 8 percent. • 0.5 percent.
Suppose that the price of peanuts falls from $4 to $3 per bushel and that, as a result, the total revenue received by peanut farmers changes from $20 to $17 billion. Thus, Multiple Choice • the demand for peanuts is elastic. • the demand for peanuts is inelastic. • the demand curve for peanuts has shifted to the left. • no inference can be made as to the elasticity of demand for peanuts.
Refer to the diagram and assume a single good. If the price of the good decreased from $6.30 to $5.70 along D1, the price elasticity of demand along this portion of the demand curve would be Multiple Choice 0.83. 1.25. • 1.2. • 0.8. Suppose that Mick and Cher are the only two members of society and are willing to pay $10 and $15, respectively, for the fifth unit of a public good. Also, assume that the marginal cost of the fifth unit is $23. We can conclude that Multiple Choice • the fifth unit should be produced. • zero units should be produced. • just 4 units should be produced. • the fifth unit should not be produced.
You are the only seller of eggs in town, and the price-elasticity coefficient for eggs is known to be 1.25. If you want to increase your sales quantity by 4 percent through a price change, what should you do to the price? Multiple Choice • reduce price by 3.2 percent • increase price by 3.2 percent • reduce price by 5 percent • increase price by 5 percent
The price elasticity of demand for widgets is 0.5. Assuming no change in the demand curve for widgets, an increase in sales of 8 percent implies a(n) Multiple Choice • 8 percent reduction in price. • 4 percent reduction in price. • 16 percent reduction in price. • 12 percent reduction in price.
Suppose we find that the price elasticity of demand for a product is 0.8 when its price is increased by 10 percent. We can conclude that quantity demanded Multiple Choice • increased by 0.08 percent. • decreased by 8 percent. • decreased by 1.2 percent. • decreased by 0.08 percent.
Suppose that Katie and Kelly each expect to receive $500 worth of marginal benefits from a proposed new recreation center, whereas Kerry expects to receive only $100 worth. If the proposed tax levied on each for the center would be $300, a majority vote will
Multiple Choice • pass this project and resources will be underallocated to it. • pass this project and resources will be efficiently allocated to it. • defeat this project and resources will be underallocated to it. • pass this project and resources will be overallocated to it.
Answer the question based on the following table, which shows a demand schedule. Price Quantity Demanded $ 5 10 4 13 3 15 2 19 1 25 Total revenues will increase if price Multiple Choice • rises from $4 to $5. • falls from $3 to $2. • falls from $4 to $3. •
A 12 percent increase in the price of tea causes 3 percent increase in the demand for coffee. The cross elasticity of demand for coffee with respect to the price of tea is Multiple Choice • -4. • 4. • -0.25. • 0.25.
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 $8 to $6 is Price
Quantity Demanded
$ 10 30 9 40 8 50 7 60 6 70 Multiple Choice • 0.86. • 0.33. • 1.14. • 1.33.
The coefficient of price-elasticity of supply for a product is 0.65 if Multiple Choice • a 4 percent decrease in the price causes a 0.16 percent decrease in quantity supplied. • a 4 percent decrease in price causes a 0.65 percent decrease in quantity supplied. • a 4 percent decrease in price causes a 2.6 percent decrease in quantity supplied. • a 0.65 percent decrease in price causes a 0.65 percent decrease in quantity supplied.
Suppose the price elasticity of demand for beef is about 0.6. Other things equal, this means that a 20 percent increase in the price of beef will cause the quantity of beef demanded to Multiple Choice • increase by approximately 12 percent. • decrease by approximately 12 percent. • decrease by approximately 32 percent. • decrease by approximately 26 percent. The supply of product X is perfectly inelastic if the price of X rises by Multiple Choice •
3 percent and quantity supplied rises by 4 percent. • 9 percent and quantity supplied rises by 9 percent. • 2 percent and quantity supplied stays the same. • 2 percent and quantity supplied rises by 1 percent.
Alex, Kara, and Susie are the only three people in a community. Alex is willing to pay $20 for the fifth unit of a public good; Kara, $15; and Susie, $25. Government should produce the fifth unit of the public good if the marginal cost is less than or equal to Multiple Choice • $15. • $45. • $60. • $20. • $25.
The income elasticity of demand for food is roughly 1. Suppose a consumer's monthly income is $2,000, of which 20 percent is spent on food. If the income of this consumer doubles, the amount she'll spend on food will be Multiple Choice • $400 per month. • $500 per month. • $800 per month. • $1,000 per month.
Suppose that an 8 percent increase in the price of normal good Y causes an 8 percent increase in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is Multiple Choice • negative, and therefore these goods are substitutes. • negative, and therefore these goods are complements. •
positive, and therefore these goods are substitutes. • positive, and therefore these goods are complements.
Suppose the price elasticity of demand for bread is 2. If the price of bread falls by 8 percent, the quantity demanded will increase by Multiple Choice • 16 percent and total expenditures on bread will fall. In • 16 percent and total expenditures on bread will rise. • 4 percent and total expenditures on bread will fall. • 4 percent and total expenditures on bread will rise.
If the price elasticity of demand for a product is equal to 2.0, then a decrease in price of 4 percent will increase quantity demanded by Multiple Choice • 2 percent. • 0.8 percent. In • 8 percent. • 0.5 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.
Answer the question based on the following information for four highway programs of increasing scope. All figures are in millions of dollars. Program A $2 B 6 C 12 D 20
Total Cost $9 16 21 23
Total Benefit
Based on the data, we can say that the marginal costs of Program A are Multiple Choice • $6. • $8. • $2. • $4.
Refer to the diagram and assume a single good. If the price of the good increased from $5.70 to $6.30 along D1, the price elasticity of demand along this portion of the demand curve would be Multiple Choice • 0.8. • 1. In • 1.2. • 2.
The supply of product X is inelastic (but not perfectly inelastic) if the price of X rises by Multiple Choice • 5 percent and quantity supplied rises by 7 percent. • 8 percent and quantity supplied rises by 8 percent. • 10 percent and quantity supplied remains the same.
• 7 percent and quantity supplied rises by 5 percent.
When the price of a product is increased 5 percent, the quantity demanded decreases 10 percent. The price-elasticity of demand coefficient for this product is Multiple Choice • 2. • 0.2. • 0.5. • 5.
A consumer's weekly income is $550, and the consumer buys 9 bars of chocolate per week. When weekly income increases to $600, the consumer buys 10 bars per week. The income elasticity of demand for chocolate by this consumer is about Multiple Choice • 1.82. • 0.83. • 1. • 1.21.
Suppose the price of local cable TV service increased from $15.00 to $20.00 and as a result the number of cable subscribers decreased from 248,000 to 200,000. Along this portion of the demand curve, using the midpoint method, price elasticity of demand is approximately Multiple Choice • 1.33. • 0.72. • 4. • 0.6.
Assume that Abby, Ben, Clara, Joe, and Matt are the only citizens in a community. A proposed public good has a total cost of $1,200. All five citizens will share an equal portion of this cost in taxes. The benefit of the public good is $220 to Abby, $210 to Ben, $210 to Clara, $180 to Joe, and $120 to Matt. In a majority vote, this proposal will most likely be Multiple Choice • accepted, all 5 in favor. • accepted, 3 in favor, 2 against.In • defeated, 1 in favor, 4 against. • defeated, all 5 against
The following data are for a series of increasingly extensive flood-control projects. Total Cost Per Year Total Benefit Per Year Plan A = Levees $ 10,000 $ 16,000 Plan B = Small Reservoir 24,000 36,000 Plan C = Medium Reservoir 44,000 52,000 Plan D = Large Reservoir 72,000 64,000 For Plan A marginal costs and marginal benefits are Multiple Choice • $20,000 and $16,000, respectively. • $16,000 and $26,000, respectively. • $20,000 and $32,000, respectively. • $10,000 and $16,000, respectively.
Answer the question based on the following table, which shows a demand schedule. Price Quantity Demanded $ 5 10 4 13 3 15 2 19 1 25 Total revenues will decrease if price Multiple Choice • rises from $1 to $2. • falls from $5 to $4.
• rises from $3 to $4. In • falls from $4 to $3.
Suppose that Katie and Kelly each expect to receive $500 worth of marginal benefits from a proposed new recreation center, whereas Kerry expects to receive only $100 worth. If the proposed tax levied on each for the center would be $450, a majority vote will Multiple Choice • defeat this project. • pass this project. • pass this project and resources will be efficiently allocated to it. • defeat this project and resources will be underallocated to it.
The price elasticity of demand for widgets is 1. Assuming no change in the demand curve for widgets, a 10 percent decrease in sales implies a(n) Multiple Choice • 13.8 percent increase in price. • 18 percent increase in price. • 10 percent increase in price. • 8 percent increase in price.
If the price elasticity of demand for a product is 2.5, then a price cut from $2.00 to $1.80 will Multiple Choice • increase the quantity demanded by about 2.5 percent. • decrease the quantity demanded by about 2.5 percent. • increase the quantity demanded by about 25 percent. • increase the quantity demanded by about 250 percent.
Answer the question based on the following information for a public good. Pa and Pb are the prices that individuals A and B are willing to pay for the last unit of a public good, rather than do without it. These people are the only two members of society.
Q 1 2 3 4 5
Pa $3 2 1 0 0
Pb $5 4 3 2 1
The collective willingness of this society to pay for the third unit of this public good is Multiple Choice • $8. • $1. • $2. • $6.In • $4.