ECON 203 Galose Exam Questions and
Verified Answers 100%
Blossom, Inc. sells 500 bottles of perfume a month when the price is $7. A huge increase in
resource costs forces Blossom to raise price to $9, and the firm only manages to sell 460 bottles
of perfume. Using the midpoint formula the price elasticity of demand is: - ✔✔0.33
A price increase from $43 to $49 results in an increase in quantity supplied from 220 units to
240 units. Using the midpoint formula the price elasticity of supply in this price range is: -
✔✔0.67
The elasticity of supply for a product will be 2 if: - ✔✔A 1 percent decrease in price causes a 2
percent decrease in quantity supplied
The cross elasticity of demand between Quaker State motor oil and Texaco motor oil is likely to
be: - ✔✔a positive number
A 3 percent increase in the price of tea causes a 6 percent increase in the quantity of coffee
sold. The cross elasticity of demand for coffee with respect to the price of tea is: - ✔✔+2.0
If the cross-price elasticity of demand for SUVs with respect to the price of gasoline is -0.10, and
gasoline prices rise by 18 percent, then SUV sales should, ceteris paribus, - ✔✔Falls by 1.8
percent
If a good is normal, its - ✔✔income elasticity of demand is positive
Suppose the quantity demanded of roses increases from 500 to 600 stems when income rises
from $10,000 to $20,000. Using the midpoint formula income elasticity of demand for roses is -
✔✔0.27
, The long run is a period during which: - ✔✔all inputs can be varied and no inputs are fixed.
If the price of labor or some other variable resource decreased, the: - ✔✔MC curve would shift
downward
When a firm doubles its inputs and finds that its output has more than doubled, this is known
as: - ✔✔Economies of scale
If you know that when a firm produces 10 units of output, total costs are $1,030 and average
fixed costs are $10, then variable costs are: - ✔✔$930
Average fixed cost: - ✔✔declines continually as output increases.
Ceteris paribus, the law of diminishing returns states that beyond some point, the -
✔✔Marginal physical product of a factor of production diminishes as more of that factor is used
If average total cost is declining, then: - ✔✔marginal cost must be less than average total cost.
A fixed cost is: - ✔✔any cost that a firm would incur even if output was zero.
Normal profit implies that - ✔✔The factors employed are earning as much as they could in the
best alternative employment.
Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a
specific year. If the firm sold 4,000 units of its output at $300 per unit, its accounting profits
were: - ✔✔$200,000 and its economic profits were zero.
What is human capital? - ✔✔the knowledge and skill of human beings and their ability to learn
and apply new knowledge on their own
Verified Answers 100%
Blossom, Inc. sells 500 bottles of perfume a month when the price is $7. A huge increase in
resource costs forces Blossom to raise price to $9, and the firm only manages to sell 460 bottles
of perfume. Using the midpoint formula the price elasticity of demand is: - ✔✔0.33
A price increase from $43 to $49 results in an increase in quantity supplied from 220 units to
240 units. Using the midpoint formula the price elasticity of supply in this price range is: -
✔✔0.67
The elasticity of supply for a product will be 2 if: - ✔✔A 1 percent decrease in price causes a 2
percent decrease in quantity supplied
The cross elasticity of demand between Quaker State motor oil and Texaco motor oil is likely to
be: - ✔✔a positive number
A 3 percent increase in the price of tea causes a 6 percent increase in the quantity of coffee
sold. The cross elasticity of demand for coffee with respect to the price of tea is: - ✔✔+2.0
If the cross-price elasticity of demand for SUVs with respect to the price of gasoline is -0.10, and
gasoline prices rise by 18 percent, then SUV sales should, ceteris paribus, - ✔✔Falls by 1.8
percent
If a good is normal, its - ✔✔income elasticity of demand is positive
Suppose the quantity demanded of roses increases from 500 to 600 stems when income rises
from $10,000 to $20,000. Using the midpoint formula income elasticity of demand for roses is -
✔✔0.27
, The long run is a period during which: - ✔✔all inputs can be varied and no inputs are fixed.
If the price of labor or some other variable resource decreased, the: - ✔✔MC curve would shift
downward
When a firm doubles its inputs and finds that its output has more than doubled, this is known
as: - ✔✔Economies of scale
If you know that when a firm produces 10 units of output, total costs are $1,030 and average
fixed costs are $10, then variable costs are: - ✔✔$930
Average fixed cost: - ✔✔declines continually as output increases.
Ceteris paribus, the law of diminishing returns states that beyond some point, the -
✔✔Marginal physical product of a factor of production diminishes as more of that factor is used
If average total cost is declining, then: - ✔✔marginal cost must be less than average total cost.
A fixed cost is: - ✔✔any cost that a firm would incur even if output was zero.
Normal profit implies that - ✔✔The factors employed are earning as much as they could in the
best alternative employment.
Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a
specific year. If the firm sold 4,000 units of its output at $300 per unit, its accounting profits
were: - ✔✔$200,000 and its economic profits were zero.
What is human capital? - ✔✔the knowledge and skill of human beings and their ability to learn
and apply new knowledge on their own
