(20)Which of the following statements given ceteris paribus is true?
A recent report suggests that frequent cellular phone usage may be linked to brain cancer, given this report it is prudent to expect:
(a)The demand for cellular phones to shift to the right
(b)The demand for cellular phones to remain unchanged
(c)(a) and (b) above
(d)None of the above

(21)Which of the following statements about a government imposed tax on potato growers in Idaho given ceteris paribus is true?
(a)It is a non-price factor that would cause the demand curve for Idaho potato growers to shift inwardly to the left
(b)It is a non-price factor that would cause the supply curve for Idaho potato growers to shift outwardly to the right
(c)It would cause the price of Idaho potatoes to increase relative to its pre-tax price
(d)It would cause the price of Idaho potatoes to remain unchanged relative to its pre-tax price

(22)Which of the following statements is true?
The recent demand for turkey for the Thanksgiving holiday given ceteris paribus would cause the demand curve to:
(a)To shift to the right
(b)To shift to the left
(c)To shift to the right along with the supply curve
(d)Remain unchanged

(23)Which of the following statements best describes a change in the initial equilibrium position of a market for a resource caused by a shift to the left in the supply curve of the resource?
(a)The new equilibrium price will be lower than the initial equilibrium price but the corresponding output of the resource will be higher than the initial equilibrium output
(b)The new equilibrium price will be lower than the initial equilibrium price but the corresponding output of the resource will be lower than the initial equilibrium output
(c)The new equilibrium price will be higher than the initial equilibrium price but the corresponding output of the resource will be lower than the initial equilibrium output
(d)None of the above

(24)Which of the following statements is true?
(a)A shift to the left in the demand curve for apples when the original supply curve for apples remain unchanged will cause the new equilibrium price of apples to rise and its new equilibrium quantity to fall
(b) A shift to the right in the supply curve for apples given that its market demand curve does not change will cause a decrease in the equilibrium price of apples and an increase in its equilibrium quantity
(c)A shift to the right in the supply curve for apples when the original demand curve for apples remain unchanged will cause the new equilibrium price of apples to rise and the new equilibrium quantity to fall
(d)None of the above

(25)Which of the following statements best explains the difference between the concepts of market demand and market supply in a given market?
(a)The market demand is the vertical summation of individual consumer demand for a good whereas market supply is the horizontal summation of the individual supply of the output of firms in a market
(b)The market demand is the rectangular summation of the individual consumer demand for a good whereas market supply is the cubic summation of the individual supply of the output of firms in a market
(c)The market demand is the horizontal summation of the individual consumer demand for a good whereas the market supply is the horizontal summation of the individual supply of the output of firms in a market
(d)None of the above

(26)Which of the following factor causes a shift in a consumer’s demand curve given ceteris paribus?
(a)Favorable or unfavorable changes in a consumer’s price expectations
(b)Favorable or unfavorable changes in a government’s tax and expenditure policies
(c)Favorable or unfavorable changes in the prices of complementary and substitute goods
(d)All of the above

(27)Which of the following statements best represents the change in Sydney’s demand curve for calculus books due to a decrease in the prices for these books given ceteris paribus?
(a)His original demand curve would shift to the left
(b)His original demand curve would shift to the right
(c)His original demand curve would remain unchanged
(d)None of the above

(28)Which of the following statements about binding price floors is false?
(a)They are generally set above the competitive equilibrium prices in markets
(b)Minimum wages for workers are examples of price floors
(c)They tend to cause excessive demand and shortage of supply in markets where they exist
(d)They are the lowest legislated prices that can be charged for resources in a market where they exist

(29)Which of the following statements about price ceilings is true?
(a)They are prices set by governments in markets
(b)They are also called maximum prices
(c)A binding price ceiling is generally set below the competitive equilibrium price in a market
(d)All of the above

(30)Which of the following statements is false?
(a)A price ceiling that is set by a government above the competitive equilibrium price does not prevent a market from reaching equilibrium
(b)A price ceiling that is set by a government below the competitive equilibrium price does not prevent a market from reaching equilibrium
(c)A price floor that is set by a government below the competitive equilibrium price does not prevent a market from reaching equilibrium
(d)According to neo-classical economists binding price floors and binding price ceilings create more problems than they solve in free markets and should be avoided

(31)Elasticity measures how “responsive” consumers are by measuring their change in______________ as the price of the product changes.
(a)Income
(b)Quantity demanded
(c)Income
(d)Attitude

(32)Within different price ranges along a linear demand curve, elasticity is:
(a)Equal
(b)Constant
(c)Different
(d)The same as slope

(33)If the price elasticity of demand for football tickets is estimated to be 2.8, then a 5 percent increase in football ticket prices would be expected to cause a:
(a)38 percent decrease in quantity demanded
(b)5 percent increase in quantity demanded
(c)14 percent decrease in quantity demanded
(d)24 percent increase in quantity demanded

(34)A microeconomist estimates that the price elasticity of demand for medical check-ups is 0.65. This suggests that the producers of medical check-ups could:
(a)Encourage more persons to visit doctors
(b)Advertise more to raise the price elasticity of demand
(c)Raise the price of medical check-ups to raise more revenue
(d)Maximize revenues by sticking to the current price

(35)Price elasticity of demand is defined as the ratio of the:
(a)Percentage increase in price to an increase in quantity demanded
(b)Unit change in quantity demanded to the dollar change in price
(c)Maximum amount that consumers will pay to increase quantity
(d)None of the above

(36)A perfectly inelastic demand curve has an elasticity coefficient of:
(a)1
(b)0.25
(c)∞
(d)None of the above

(37)If the percentage change in the quantity supplied of a good is less than the percentage change in price, price elasticity of supply is:
(a)Inelastic
(b)Perfectly inelastic
(c)Elastic
(d)Unitary elastic

(38)If the percentage change in the quantity demanded of a good is equal to the percentage change in price, price elasticity of demand is:
(a)Inelastic
(b)Perfectly inelastic
(c)Elastic
(d)None of the above

(39)In order to prove that ginger tea and mint tea are substitutes, microeconomists should test the------------------------------and get a-------------------------------.
(a)Price elasticity of demand; positive number
(b)Price elasticity of supply; negative number
(c)Cross price elasticity of demand; positive number
(d)Income elasticity of demand; negative number

(40)Suppose that the quantity of oranges sold increases by 45 percent when the price of tangerines increases by 25 percent. What is the coefficient of cross price elasticity of demand for these fruits?
(a)2.5
(b)3.2
(c)1.8
(d)0.3