ECON 528 Midterm Review Questions
and Answers 100% Correct
If the price of music downloads was to decrease, then
Select one:
a.
the demand for MP3 players would increase.
b.
the supply of MP3 players would increase.
c.
the demand for MP3 players would decrease.
d.
the quantity demanded of MP3 players would decrease. - ANSWER-a.
the demand for MP3 players would increase.
A change in all of the following variables will change the market demand for a product
except
Select one:
a.
the price of the product.
b.
population and demographics.
c.
tastes.
d.
income. - ANSWER-a.
the price of the product.
If the percentage increase in price is 15 percent and the value of the price elasticity of
demand is -3, then quantity demanded
Select one:
a.
will increase by 5 percent.
b.
will increase by 45 percent.
c.
will decrease by 5 percent.
d.
will decrease by 45 percent. - ANSWER-d.
will decrease by 45 percent.
, Linesha, a college student working part-time receives a wage increase. An avid movie
buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs.
Based on this information
Select one:
a.
the cross-price elasticity between DVDs and Blu-ray discs is negative.
b.
DVDs and Blu-ray discs are normal goods.
c.
Blu-ray discs are normal goods and DVDs are inferior goods.
d.
DVDs and Blu-ray discs are substitutes. - ANSWER-c.
Blu-ray discs are normal goods and DVDs are inferior goods.
Last year, Sefton purchased 60 pounds of potatoes to feed his family of five when his
household income was $30,000. This year, his household income fell to $20,000 and
Sefton purchased 80 pounds of potatoes. All else constant, Sefton's income elasticity of
demand for potatoes is
Select one:
a.
positive, so Sefton considers potatoes to be a normal good and a necessity.
b.
negative, so Sefton considers potatoes to be a normal good.
c.
positive, so Sefton considers potatoes to be an inferior good.
d.
negative, so Sefton considers potatoes to be an inferior good. - ANSWER-d.
negative, so Sefton considers potatoes to be an inferior good.
If the price of steel increases drastically, the quantity of steel demanded by the building
industry will fall significantly over the long run because
Select one:
a.
sales revenue in the building industry will fall sharply.
b.
profits will fall by a greater amount in the long run than in the short run.
c.
buyers of steel are less sensitive to a price change if they have more time to adjust to
the price change.
d.
buyers of steel are more sensitive to a price change if they have more time to adjust to
the price change. - ANSWER-d.
buyers of steel are more sensitive to a price change if they have more time to adjust to
the price change.
and Answers 100% Correct
If the price of music downloads was to decrease, then
Select one:
a.
the demand for MP3 players would increase.
b.
the supply of MP3 players would increase.
c.
the demand for MP3 players would decrease.
d.
the quantity demanded of MP3 players would decrease. - ANSWER-a.
the demand for MP3 players would increase.
A change in all of the following variables will change the market demand for a product
except
Select one:
a.
the price of the product.
b.
population and demographics.
c.
tastes.
d.
income. - ANSWER-a.
the price of the product.
If the percentage increase in price is 15 percent and the value of the price elasticity of
demand is -3, then quantity demanded
Select one:
a.
will increase by 5 percent.
b.
will increase by 45 percent.
c.
will decrease by 5 percent.
d.
will decrease by 45 percent. - ANSWER-d.
will decrease by 45 percent.
, Linesha, a college student working part-time receives a wage increase. An avid movie
buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs.
Based on this information
Select one:
a.
the cross-price elasticity between DVDs and Blu-ray discs is negative.
b.
DVDs and Blu-ray discs are normal goods.
c.
Blu-ray discs are normal goods and DVDs are inferior goods.
d.
DVDs and Blu-ray discs are substitutes. - ANSWER-c.
Blu-ray discs are normal goods and DVDs are inferior goods.
Last year, Sefton purchased 60 pounds of potatoes to feed his family of five when his
household income was $30,000. This year, his household income fell to $20,000 and
Sefton purchased 80 pounds of potatoes. All else constant, Sefton's income elasticity of
demand for potatoes is
Select one:
a.
positive, so Sefton considers potatoes to be a normal good and a necessity.
b.
negative, so Sefton considers potatoes to be a normal good.
c.
positive, so Sefton considers potatoes to be an inferior good.
d.
negative, so Sefton considers potatoes to be an inferior good. - ANSWER-d.
negative, so Sefton considers potatoes to be an inferior good.
If the price of steel increases drastically, the quantity of steel demanded by the building
industry will fall significantly over the long run because
Select one:
a.
sales revenue in the building industry will fall sharply.
b.
profits will fall by a greater amount in the long run than in the short run.
c.
buyers of steel are less sensitive to a price change if they have more time to adjust to
the price change.
d.
buyers of steel are more sensitive to a price change if they have more time to adjust to
the price change. - ANSWER-d.
buyers of steel are more sensitive to a price change if they have more time to adjust to
the price change.
