Economics Exam, Econ 414 Final Chapter 14, Fin 321 Midterm 2, Macro Final Exam, Econ chapter 14 & 16, ManEcon - Chapter 14 quiz, quiz 4, ECON TEST 3, Managerial Economics Chapter 12 Test Bank

Economics Exam, Econ 414 Final Chapter 14, Fin 321 Midterm 2, Macro Final Exam, Econ chapter 14 & 16, ManEcon - Chapter 14 quiz, quiz 4, ECON TEST 3, Managerial Economics Chapter 12 Test Bank Unlike an accountant, an economist measures costs on a (n) ________ basis. replacement There is no change in total revenue when the demand curve for a good is: Unitary elastic. When the price of a good in a market is above equilibrium: The quantity supplied exceeds the quantity demanded. A surplus is observed. The price will fall in the near future. ALL OF THE ABOVE When a firm raises the price of its product, what happens to total revenue? If demand is elastic, total revenue decreases Which of the following would NOT describe an aspect of long-run adjustment to rising gasoline prices? Consumers make no changes in their current driving habits. Gasoline and sports utility vehicles (SUVs) are complementary goods. One would expect, therefore, that the recent increase in the price of gasoline would cause The demand for SUVs to fall and the equilibrium quantity to fall Which of the following best describes 'Market Value Added'? The difference between the market value of the firm and the amount of contributed capital. If sellers try to charge a price which is above the equilibrium level, then it can be predicted that: Surplus conditions will result and forces will be set in motion to cause prices to fall. Several firms spent millions of dollars advertising their goods and services at the recent Super Bowl. One of the reasons they did so was that they were attempting to: shift the demand for the product to the right. Which of the following statements is true? An increase in demand causes equilibrium price and quantity to rise. A decrease in demand causes equilibrium price and quantity to fall. An increase in supply causes equilibrium price to fall and quantity to rise. A decrease in supply causes equilibrium price to rise and quantity to fall. ALL OF THE ABOVE Which of the following statements highlight the distinction between microeconomics and macroeconomics? microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy. If the cross price elasticity between a Subway Veggie Delite and Jimmy John's Veggie sandwich is 4.0, a 10% increase in the price of Subway sandwich will lead to a: 40% increase in the demand of Jimmy John's sandwiches Assume Coca-Cola and Pepsi-Cola are substitutes. A rise in the price of Coca-Cola will have which of the following effects on the market for Pepsi? A rightward shift in the Pepsi demand curve. Which of the following examples best illustrates the concept of derived demand? The higher the demand for automobiles, the greater the demand for steel. Speed in communications and the growth of internet has caused transaction costs to: decrease significantly Which of the following would represent a microeconomics decision or process? Using forecasted interest rates to determine the appropriate time to finance a new plant. Weather conditions have been exceptionally good for growing strawberries this year and a bumper crop is anticipated. As a result, one would expect The supply to be higher than normal, and the market price to be lower Suppose there is a shortage of food in the market. In the long-run,the guiding (allocation) function of price can be expected to cause an increasing shift in the supply of food. If the coefficient of price elasticity for a given product is -2.5, then it can be said that Demand will increase if price rises A lower price will be accompanied by lower total expenditures on the product A one percent change in the products price will tend to be accompanied by a 2.5 percent change in quantity demanded in the same direction of the price change Demand is inelastic NONE OF THESE Which of the following best describes the difference between a change in quantity demanded and change in demand? A change in quantity demanded occurs when the price of the good has changed; a change in demand occurs when a non-price determinant of demand for the good has changed. A firm earns a normal profit when its total revenues just offset both the ________ cost and ________ cost. accounting; opportunity As you move down along a demand curve, demand becomes less elastic If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls from 10,000 slices to 7,400 slices, using the formula for arc price elasticity what is the price elasticity of demand ? - 1.64 If the demand curve for a good always has unitary price elasticity, what does this imply about consumer behavior? Consumers will spend a constant total amount on the good. A price-ceiling can be defined as: a legal maximum price established by the government for a specific market. Which of the following best describes entrepreneurial ability? The ability to manage scarce resources, find new methods to achieve objectives, and be willing and able to assume the risk associated with achievement. Suppose that the Vice President for Marketing of Aetna Pharmacueticals argues that a 10 percent increase in the price of insulin (used by diabetic patients) will raise total revenues. It can be inferred that the Vice Prseident of Marketing thinks that demand for insulin is: Inelastic. When we are making choices, we do because of: unlimited wants and limited resources. An inferior good has a ________ income elasticity of demand and demand for the good ________ as income rises. negative; decreases