ECON 202 EXAM 2 OLE MISS MS. CARLISLE UPDATED
ACTUAL QUESTIONS WITH CORRECT ANSWERS
Question 1.
price elasticity of demand
ANSWER
a measure of how much the quantity demanded of a good responds to a change in the price of
that good. Computed as (% change in quantity demanded/% change in price)
Question 2.
unit elasticity
ANSWER
an increase or decrease in price leaves total revenue unchanged
Question 3.
Would the price elasticity coefficient of a product that has successful advertising and local buyers be
high or low
ANSWER
The price elasticity would be low with a high % of demand
Question 4.
When the price of gasoline increases, what cost curve is affected for delivery companies
ANSWER
Total variable cost (TVC) and total cost (TC).
Question 5.
A supply curve with a vertical straight line indicates what
ANSWER
A change in price will have no effect on quantity supplied. (slope is 0)
, Question 6.
When total product is at its maximum level, the marginal product is at its
ANSWER
lowest.
Question 7.
The law of diminishing marginal utility
ANSWER
as a person increases consumption of a product while keeping consumption of other products
constant, there is a decline in the marginal utility that person derives from consuming each
additional unit of that product.
Question 8.
The basic characteristic of the short run is
ANSWER
A period of time too short to change plant capacity but long enough to use the fixed sized
plant more or less intensively.
Question 9.
Law of Supply
ANSWER
other things equal, the quantity supplied of a good rises when the price of the good rises
Question 10.
The law of supply suggests that the price-elasticity of supply is
ANSWER
inelastic.
ACTUAL QUESTIONS WITH CORRECT ANSWERS
Question 1.
price elasticity of demand
ANSWER
a measure of how much the quantity demanded of a good responds to a change in the price of
that good. Computed as (% change in quantity demanded/% change in price)
Question 2.
unit elasticity
ANSWER
an increase or decrease in price leaves total revenue unchanged
Question 3.
Would the price elasticity coefficient of a product that has successful advertising and local buyers be
high or low
ANSWER
The price elasticity would be low with a high % of demand
Question 4.
When the price of gasoline increases, what cost curve is affected for delivery companies
ANSWER
Total variable cost (TVC) and total cost (TC).
Question 5.
A supply curve with a vertical straight line indicates what
ANSWER
A change in price will have no effect on quantity supplied. (slope is 0)
, Question 6.
When total product is at its maximum level, the marginal product is at its
ANSWER
lowest.
Question 7.
The law of diminishing marginal utility
ANSWER
as a person increases consumption of a product while keeping consumption of other products
constant, there is a decline in the marginal utility that person derives from consuming each
additional unit of that product.
Question 8.
The basic characteristic of the short run is
ANSWER
A period of time too short to change plant capacity but long enough to use the fixed sized
plant more or less intensively.
Question 9.
Law of Supply
ANSWER
other things equal, the quantity supplied of a good rises when the price of the good rises
Question 10.
The law of supply suggests that the price-elasticity of supply is
ANSWER
inelastic.
