ECON 2102 Test 2 Questions and Answers Already Passed Latest Update 2025-2026
The price elasticity of demand for newspapers is .34. What would be the consequence of a 2%
decrease in the price of newspapers? - Answers Quantity demanded would increase by .68%
Suppose that the price of T-shirts increased from $10 to $20. In response, quantity
demanded declined from 100 cases/month to 80 cases/month. The price elasticity of demand
is equal to: ________. - Answers .33
A perfectly inelastic demand curve: - Answers is vertical
Above the midpoint on a linear demand curve: - Answers elasticity of demand > 1.
Total revenue will increase if price: - Answers rises and demand is inelastic
In general, demand is less elastic when: - Answers there are no good substitutes available
When income elasticity of demand is negative, one can correctly conclude that: - Answers the
good is inferior.
When the price of good R fell from $8 to $6, the demand for good T increased from 10
units to 20 units. Nothing else changed. Cross elasticity of demand equals _______. - Answers -
2.33
An increase in the price of good X caused the demand for good Y to decrease. - Answers Cross
elasticity is negative because the two goods are complements
Which of the following would be most useful in predicting the impact of a recession on the
demand for air travel? - Answers Income elasticity of demand for air travel
In the short run: - Answers at least one of the firm's inputs is fixed
The addition to total output resulting from the employment of one more worker, ceteris paribus,
is the: - Answers marginal physical product of labor
For the firm with a single variable input, when marginal physical product is rising: - Answers
marginal cost is falling
The "Law of Diminishing Returns" dictates that: - Answers marginal product must eventually fall
The addition to total variable cost when another unit of output is produced is: - Answers
marginal cost
The cost that does not vary with the quantity of output that a firm produces is: - Answers fixed
cost
The price elasticity of demand for newspapers is .34. What would be the consequence of a 2%
decrease in the price of newspapers? - Answers Quantity demanded would increase by .68%
Suppose that the price of T-shirts increased from $10 to $20. In response, quantity
demanded declined from 100 cases/month to 80 cases/month. The price elasticity of demand
is equal to: ________. - Answers .33
A perfectly inelastic demand curve: - Answers is vertical
Above the midpoint on a linear demand curve: - Answers elasticity of demand > 1.
Total revenue will increase if price: - Answers rises and demand is inelastic
In general, demand is less elastic when: - Answers there are no good substitutes available
When income elasticity of demand is negative, one can correctly conclude that: - Answers the
good is inferior.
When the price of good R fell from $8 to $6, the demand for good T increased from 10
units to 20 units. Nothing else changed. Cross elasticity of demand equals _______. - Answers -
2.33
An increase in the price of good X caused the demand for good Y to decrease. - Answers Cross
elasticity is negative because the two goods are complements
Which of the following would be most useful in predicting the impact of a recession on the
demand for air travel? - Answers Income elasticity of demand for air travel
In the short run: - Answers at least one of the firm's inputs is fixed
The addition to total output resulting from the employment of one more worker, ceteris paribus,
is the: - Answers marginal physical product of labor
For the firm with a single variable input, when marginal physical product is rising: - Answers
marginal cost is falling
The "Law of Diminishing Returns" dictates that: - Answers marginal product must eventually fall
The addition to total variable cost when another unit of output is produced is: - Answers
marginal cost
The cost that does not vary with the quantity of output that a firm produces is: - Answers fixed
cost
