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  1. (20)Which of the following statements given ceteris paribus is true?
  2. A recent report suggests that frequent cellular phone usage may be linked to brain cancer, given this report it is prudent to expect:
  3. (a)The demand for cellular phones to shift to the right
  4. (b)The demand for cellular phones to remain unchanged
  5. (c)(a) and (b) above
  6. (d)None of the above
  7.  
  8. (21)Which of the following statements about a government imposed tax on potato growers in Idaho given ceteris paribus is true?
  9. (a)It is a non-price factor that would cause the demand curve for Idaho potato growers to shift inwardly to the left
  10. (b)It is a non-price factor that would cause the supply curve for Idaho potato growers to shift outwardly to the right
  11. (c)It would cause the price of Idaho potatoes to increase relative to its pre-tax price
  12. (d)It would cause the price of Idaho potatoes to remain unchanged relative to its pre-tax price
  13.  
  14. (22)Which of the following statements is true?
  15. The recent demand for turkey for the Thanksgiving holiday given ceteris paribus would cause the demand curve to:
  16. (a)To shift to the right
  17. (b)To shift to the left
  18. (c)To shift to the right along with the supply curve
  19. (d)Remain unchanged
  20.  
  21. (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?
  22. (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
  23. (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
  24. (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
  25. (d)None of the above
  26.  
  27. (24)Which of the following statements is true?
  28. (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
  29. (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
  30. (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
  31. (d)None of the above
  32.  
  33. (25)Which of the following statements best explains the difference between the concepts of market demand and market supply in a given market?
  34. (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
  35. (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
  36. (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
  37. (d)None of the above
  38.  
  39. (26)Which of the following factor causes a shift in a consumer’s demand curve given ceteris paribus?
  40. (a)Favorable or unfavorable changes in a consumer’s price expectations
  41. (b)Favorable or unfavorable changes in a government’s tax and expenditure policies
  42. (c)Favorable or unfavorable changes in the prices of complementary and substitute goods
  43. (d)All of the above
  44.  
  45. (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?
  46. (a)His original demand curve would shift to the left
  47. (b)His original demand curve would shift to the right
  48. (c)His original demand curve would remain unchanged
  49. (d)None of the above
  50.  
  51. (28)Which of the following statements about binding price floors is false?
  52. (a)They are generally set above the competitive equilibrium prices in markets
  53. (b)Minimum wages for workers are examples of price floors
  54. (c)They tend to cause excessive demand and shortage of supply in markets where they exist
  55. (d)They are the lowest legislated prices that can be charged for resources in a market where they exist
  56.  
  57. (29)Which of the following statements about price ceilings is true?
  58. (a)They are prices set by governments in markets
  59. (b)They are also called maximum prices
  60. (c)A binding price ceiling is generally set below the competitive equilibrium price in a market
  61. (d)All of the above
  62.  
  63. (30)Which of the following statements is false?
  64. (a)A price ceiling that is set by a government above the competitive equilibrium price does not prevent a market from reaching equilibrium
  65. (b)A price ceiling that is set by a government below the competitive equilibrium price does not prevent a market from reaching equilibrium
  66. (c)A price floor that is set by a government below the competitive equilibrium price does not prevent a market from reaching equilibrium
  67. (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
  68.  
  69. (31)Elasticity measures how “responsive” consumers are by measuring their change in______________ as the price of the product changes.
  70. (a)Income
  71. (b)Quantity demanded
  72. (c)Income
  73. (d)Attitude
  74.  
  75. (32)Within different price ranges along a linear demand curve, elasticity is:
  76. (a)Equal
  77. (b)Constant
  78. (c)Different
  79. (d)The same as slope
  80.  
  81. (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:
  82. (a)38 percent decrease in quantity demanded
  83. (b)5 percent increase in quantity demanded
  84. (c)14 percent decrease in quantity demanded
  85. (d)24 percent increase in quantity demanded
  86.  
  87. (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:
  88. (a)Encourage more persons to visit doctors
  89. (b)Advertise more to raise the price elasticity of demand
  90. (c)Raise the price of medical check-ups to raise more revenue
  91. (d)Maximize revenues by sticking to the current price
  92.  
  93. (35)Price elasticity of demand is defined as the ratio of the:
  94. (a)Percentage increase in price to an increase in quantity demanded
  95. (b)Unit change in quantity demanded to the dollar change in price
  96. (c)Maximum amount that consumers will pay to increase quantity
  97. (d)None of the above
  98.  
  99. (36)A perfectly inelastic demand curve has an elasticity coefficient of:
  100. (a)1
  101. (b)0.25
  102. (c)∞
  103. (d)None of the above
  104.  
  105. (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:
  106. (a)Inelastic
  107. (b)Perfectly inelastic
  108. (c)Elastic
  109. (d)Unitary elastic
  110.  
  111. (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:
  112. (a)Inelastic
  113. (b)Perfectly inelastic
  114. (c)Elastic
  115. (d)None of the above
  116.  
  117. (39)In order to prove that ginger tea and mint tea are substitutes, microeconomists should test the------------------------------and get a-------------------------------.
  118. (a)Price elasticity of demand; positive number
  119. (b)Price elasticity of supply; negative number
  120. (c)Cross price elasticity of demand; positive number
  121. (d)Income elasticity of demand; negative number
  122.  
  123. (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?
  124. (a)2.5
  125. (b)3.2
  126. (c)1.8
  127. (d)0.3
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