MicroEconomics Test 2 example #9062

Other things equal, when does the demand for a good tend to be more inelastic?

The number of CDs purchased increased by 5 percent when consumer income increased by 10 percent. Assuming other factors are held constant, how would CDs be classified?

An increase in the price of computer diskettes leads to an increase in total expenditures on the diskettes. Which of the following is true for this price change?

Which of the following is true along the inelastic portion of a demand curve?

What happens to a total revenue if the demand for a good is elastic?

If demand price elasticity measures 2, this implies that consumers would

If the income elasticity of demand for a good is negative, this implies

If a large percentage increase in the price of a good results in a small percentage reduction in the quantity demanded of the good, demand is said to be

What happens to elasticity of demand when a good is more broadly defined?

When the price elasticity of demand is large, then

If a Pizza Hut restaurant near campus increases its prices by 10 percent, and as a result, its sales revenue increases by 3 percent, the price elasticity of demand for the services offered by the restaurant must be

If the price of apples increase, total expenditures on apples will decline if

What do economists mean when they say the price elasticity of supply is elastic?

Tele-Com, Inc., the nation's largest cable TV company, tested the effect of a price reduction for the Disney Channel. It lowered prices from $10.75 to $7.95 and found that the number of customers more than doubled. What caused the change?

Goods that consumers regard as luxuries generally have

The price elasticity of demand for a commodity is determined primarily by which of the following?

If bus travel is an inferior good, then its income elasticity of demand will be

The principle of diminishing marginal utility says that

What is marginal utility?

What does the price elasticity of demand for gasoline measure?

Which of the following is the best definition of a normal good?

If the demand for a product increases as the result of a decline in income, it can be concluded that the

A good is classified as inferior if

Which of the following is true about the marginal value of a commodity to a consumer?

If the income elasticity of a good is positive, we can conclude that the good is

A good with a high income elasticity is generally considered to be

Which of the following is the opportunity cost associated with the use of resources owned by a firm?

Marginal cost is defined as the increase in total cost resulting from an increase in

The short run is the time period which

Marginal cost is best defined as

The long run is a period of

Costs that a firm remaining in business will still incur even if it halts current production are called

The short run is a time period such that

What is the marginal cost of a good?

When total revenue minus total economic cost is greater than zero, the firm is

Economic profit is

If fixed cost is $130 when the firm produces 100 units, which of the following statements about fixed cost is true?

Which of the following is most likely to be true of economic and accounting profits?

If most businesses in an industry are earning a 13 percent rate of return on their assets, but your firm is earning 23 percent, your rate of economic profit is

If a firm produces nothing, which of the following costs will be zero?

What does an economist imply when he says a firm is earning zero economic profit?

For a firm that wants to remain in business, which of the following costs could be avoided if it halted current production?

The law of diminishing marginal returns explains the general shape of the firm's

Why will a firm eventually experience rising per-unto costs in the short run?

For most firms, what is the major difference between accounting profit and economic profit?

When do long-run diseconomies of scale exist over a range of output?

Why does a price ceiling set below an equilibrium price tend to cause persistent imbalances in the market?

A price floor that sets the price of a good above market equilibrium will cause

A price ceiling that sets the price of a good below market equilibrium will cause which of the following?

Why does a price floor set above an equilibrium price tend to cause persistent imbalances in the market?

A subsidy is defined as

What happens when a price floor is imposed above the equilibrium price of a good?

The term "deadweight loss" or "excess burden" is used to describe which of the following?

The deadweight loss (or excess burden) resulting from levying a tax on an economic activity is the

The marginal tax rate is defined as

The Laffer curve illustrates the relationship between

How would an increase in the price of paper influence the market for college textbooks?

Why does the imposition of a tax on a good create a deadweight?

Which of the following statements about resource markets is correct?

Which of the following characterizations about rent control is correct?

Under rent contra, tenants can expect

Suppose that the federal government levies a 50 cent excise tax on gasoline and that the demand for gasoline is highly inelastic while the supply is highly elastic. Under these circumstances, the burden of the tax

A tax on the buyers of coffee will result in which of the following?

A tax imposed on a market tends to lead to which of the following?

What happens when tax is imposed on a good?

Which of the following will most likely occur when government price controls fix the price of a good above market equilibrium?

Externalities are fundamentally the result of which of the following?

Students in a class are assigned to groups to work on a project. A grade will be given for each project, and everyone in the group will receive that grade. For the members of a particular group, the grade is a

In economics, a free rider is a term used for a person who

The idea that an action should be undertaken if and only if the benefits exceed the costs is known as the concept of

Which of the following is true when a good is non excludable

When is a good considered non excludable?

When economist say that an activity meets the criterion for economic efficiency, what do they mean?

The spillover effects of action that affect the well-being of non consenting third parties are called

A free-rider problem exists when a good that has the following characteristic?

When is a good considered non rival-in-consumptioin?

When production of a good provides external benefits, there will be

suppose a firm generates external benefits. How could more efficient outcome be achieved?

Which of the following about public goods is true?

Which of the following is true when externalities are present?

Which of the following is true because of the free-rider problem?

"Government failure" exists when political decision-makers choose actions that

As a general rule, if pollution costs are external, firms will produce

Consider two goods--one that generates external benefits and another that generates external costs. A competitive market economy would tend to produce

When do markets fail to allocate resources efficiently?

Suppose external costs are present in a market which results in the actual market price of $50 and market output of 800 units. How does this outcome compare to the efficient, ideal equilibrium?