ECP3704 CORRECT FINAL EXAMS QUESTIONS
AND ANSWERS SURE A+
✔✔Which of the following factors would not affect the own-price elasticity of a good?
-Time
-Price of an input
-Available substitutes
-Expenditure share - ✔✔Price of an input
✔✔If the absolute value of the own-price elasticity of steak is 0.4, a decrease in price
will lead to:
- A reduction in total revenue
-An increase in total revenue
-No change in total revenue
-None of the statements associated with this question are correct - ✔✔A reduction in
total revenue
✔✔The demand curve for a good is horizontal when it is:
- A perfectly inelastic good
-A unitary elastic good
-A perfectly elastic good
-An inferior good - ✔✔A perfectly elastic good
✔✔If quantity demanded for sneakers falls by 10% when price increases 25% we know
that the absolute value of the own-price elasticty of sneakers is:
- 2.5
- 0.4
- 2.0
- 0.27 - ✔✔0.4
✔✔The own-price elasticity of demand for apples is -1.2. If the price of apples falls by
5%, what will happen to the quantity of apples demanded?
, -It will increase 5%
-It will fall 4.3%
-It will increase 4.2%
-It will increase 6% - ✔✔It will increase 6%
✔✔The quantity consumed of a good is relatively unresponsive to changes in price
whenever demand is:
-Elastic
-Unitary
-Falling
-Inelastic - ✔✔Inelastic
✔✔If apples have an own-price elasticity of -1.2 we know the demand is:
-Unitary
-Indeterminate
-Elastic
-Inelastic - ✔✔Elastic
✔✔As we move down along a linear demand curve, the price of elasticity of demand
becomes more
-Elastic
-Inelastic
-Log-linear
-Variable - ✔✔Inelastic
✔✔Assume that the price elasticity of demand is -2 for a certain firm's product. If the
firm raises price, the firm's managers can expect total revenue to:
-Decrease
-increase
-Remain constant
-Either increase or remain constant depending upon the size of the price increase -
✔✔Decrease
✔✔Economies of scale exist whenever long-run average costs
-Increase as output is increases
-Decrease as output is increased
-Remain constant as output is increased
-Non of the statements associated with this question are correct - ✔✔Decrease as
output is increased
✔✔Suppose the cost function is C(Q) = 50 + Q - 10Q^2 + 2Q^3. What is the variable
cost of producing 10 units?
$401
$1,060
$560
AND ANSWERS SURE A+
✔✔Which of the following factors would not affect the own-price elasticity of a good?
-Time
-Price of an input
-Available substitutes
-Expenditure share - ✔✔Price of an input
✔✔If the absolute value of the own-price elasticity of steak is 0.4, a decrease in price
will lead to:
- A reduction in total revenue
-An increase in total revenue
-No change in total revenue
-None of the statements associated with this question are correct - ✔✔A reduction in
total revenue
✔✔The demand curve for a good is horizontal when it is:
- A perfectly inelastic good
-A unitary elastic good
-A perfectly elastic good
-An inferior good - ✔✔A perfectly elastic good
✔✔If quantity demanded for sneakers falls by 10% when price increases 25% we know
that the absolute value of the own-price elasticty of sneakers is:
- 2.5
- 0.4
- 2.0
- 0.27 - ✔✔0.4
✔✔The own-price elasticity of demand for apples is -1.2. If the price of apples falls by
5%, what will happen to the quantity of apples demanded?
, -It will increase 5%
-It will fall 4.3%
-It will increase 4.2%
-It will increase 6% - ✔✔It will increase 6%
✔✔The quantity consumed of a good is relatively unresponsive to changes in price
whenever demand is:
-Elastic
-Unitary
-Falling
-Inelastic - ✔✔Inelastic
✔✔If apples have an own-price elasticity of -1.2 we know the demand is:
-Unitary
-Indeterminate
-Elastic
-Inelastic - ✔✔Elastic
✔✔As we move down along a linear demand curve, the price of elasticity of demand
becomes more
-Elastic
-Inelastic
-Log-linear
-Variable - ✔✔Inelastic
✔✔Assume that the price elasticity of demand is -2 for a certain firm's product. If the
firm raises price, the firm's managers can expect total revenue to:
-Decrease
-increase
-Remain constant
-Either increase or remain constant depending upon the size of the price increase -
✔✔Decrease
✔✔Economies of scale exist whenever long-run average costs
-Increase as output is increases
-Decrease as output is increased
-Remain constant as output is increased
-Non of the statements associated with this question are correct - ✔✔Decrease as
output is increased
✔✔Suppose the cost function is C(Q) = 50 + Q - 10Q^2 + 2Q^3. What is the variable
cost of producing 10 units?
$401
$1,060
$560
