ECN 104 EXAM QUESTIONS AND
CORRECT ANSWERS ALREADY
PASSED
A firm's supply curve is upward sloping because:
A) beyond some point the production costs of additional units of output will rise.
B) consumers envision a positive relationship between price and quality.
C) mass production economies are associated with larger levels of output.
D) the expansion of production necessitates the use of qualitatively inferior inputs. -
Answer- A) beyond some point the production costs of additional units of output will rise.
If the demand for farm products is price inelastic, a good harvest will cause farm
revenues to:
A) decrease
B) be unchanged
C) increase
D) either increase or decrease, depending on what happens to supply - Answer- A)
decrease
if the demand for a product is elastic, then:
A) TR will remains constant as price remains constant
B) TR will decrease as price decreases
C) a higher tax will generate more tax revenue
D) a higher tax will generate less tax revenue - Answer- D) a higher tax will generate
less tax revenue
Suppose that as the price of Y falls from $2.00 to $1.90 the quantity of Y demanded
increases from 110 to 118, then the price elasticity of demand (using the midpoint
formula):
A) 4.00
B) 1.37
C) 2.09
D) 1.73 - Answer-
Which of the following statements is correct?
A) public goods are bought voluntarily out of private incomes and yield widespread
external benefits
, B) public goods yield widespread external benefits and are provided by government with
tax revenues
C) private goods yield direct benefits to the purchaser and are financed by government
D) public goods are bought voluntarily out of private incomes and yield no significant
external benefits - Answer- B) public goods yield widespread external benefits and are
provided by government with tax revenues
If the demand for a product is elastic, then total revenue will:
A) be constant in response to a price change
B) increase whether price increases of decreases
C) fall as price falls
D) rises as price falls - Answer- D) rises as price falls
Suppose the price elasticity coefficients of demand are 1.43, 0.67, 1.11, and 0.29 for
products W, X, Y, and Z respectively. A 1 percent decrease in price will increase total
revenue in the case(s) of:
A) W and Y
B) Z and W
C) X and Z
D) Y and Z - Answer- A) W and Y
An "increase in efficiency" suggests that an economy:
A) has moved from a point outside of, to a point on, its PPC
B) has decided to produce more consumer goods and fewer capital goods
C) is able to get more output from a given amount of inputs
D) has moved from a point on, to a point inside, its PPC - Answer- C) is able to get
more output from a given amount of inputs
In a competitive market, if the existing price is below the eqb. price, market forces will
drive the price:
A) up and quantity supplied down
B) up and quantity supplied up
C) up and supply up
D) down and demand down - Answer- B) up and quantity supplied up
When an economy achieves both allocative and productive efficiency, it implies that
there is:
A) price stability
B) income equality
C) fixed technology
D) full production - Answer- D) full production
A and B are substitute goods, but A and C are complementary goods (in consumption).
If the costs of production of A increase, then the demand for:
A) B will decrease and the demand for C will increase
B) both B and C will increase
CORRECT ANSWERS ALREADY
PASSED
A firm's supply curve is upward sloping because:
A) beyond some point the production costs of additional units of output will rise.
B) consumers envision a positive relationship between price and quality.
C) mass production economies are associated with larger levels of output.
D) the expansion of production necessitates the use of qualitatively inferior inputs. -
Answer- A) beyond some point the production costs of additional units of output will rise.
If the demand for farm products is price inelastic, a good harvest will cause farm
revenues to:
A) decrease
B) be unchanged
C) increase
D) either increase or decrease, depending on what happens to supply - Answer- A)
decrease
if the demand for a product is elastic, then:
A) TR will remains constant as price remains constant
B) TR will decrease as price decreases
C) a higher tax will generate more tax revenue
D) a higher tax will generate less tax revenue - Answer- D) a higher tax will generate
less tax revenue
Suppose that as the price of Y falls from $2.00 to $1.90 the quantity of Y demanded
increases from 110 to 118, then the price elasticity of demand (using the midpoint
formula):
A) 4.00
B) 1.37
C) 2.09
D) 1.73 - Answer-
Which of the following statements is correct?
A) public goods are bought voluntarily out of private incomes and yield widespread
external benefits
, B) public goods yield widespread external benefits and are provided by government with
tax revenues
C) private goods yield direct benefits to the purchaser and are financed by government
D) public goods are bought voluntarily out of private incomes and yield no significant
external benefits - Answer- B) public goods yield widespread external benefits and are
provided by government with tax revenues
If the demand for a product is elastic, then total revenue will:
A) be constant in response to a price change
B) increase whether price increases of decreases
C) fall as price falls
D) rises as price falls - Answer- D) rises as price falls
Suppose the price elasticity coefficients of demand are 1.43, 0.67, 1.11, and 0.29 for
products W, X, Y, and Z respectively. A 1 percent decrease in price will increase total
revenue in the case(s) of:
A) W and Y
B) Z and W
C) X and Z
D) Y and Z - Answer- A) W and Y
An "increase in efficiency" suggests that an economy:
A) has moved from a point outside of, to a point on, its PPC
B) has decided to produce more consumer goods and fewer capital goods
C) is able to get more output from a given amount of inputs
D) has moved from a point on, to a point inside, its PPC - Answer- C) is able to get
more output from a given amount of inputs
In a competitive market, if the existing price is below the eqb. price, market forces will
drive the price:
A) up and quantity supplied down
B) up and quantity supplied up
C) up and supply up
D) down and demand down - Answer- B) up and quantity supplied up
When an economy achieves both allocative and productive efficiency, it implies that
there is:
A) price stability
B) income equality
C) fixed technology
D) full production - Answer- D) full production
A and B are substitute goods, but A and C are complementary goods (in consumption).
If the costs of production of A increase, then the demand for:
A) B will decrease and the demand for C will increase
B) both B and C will increase
