Eco Study Question

Topics: Supply and demand, Consumer theory, Microeconomics Pages: 18 (3044 words) Published: April 17, 2013
The affordable bundle that yields the greatest satisfaction to the consumer is: Answer
| | the maximum bundle.|
| | the equilibrium consumption bundle.|
| | the allowable purchasing bundle.|
| | the most popular bundle.|
Given that income is $500 and PX = $20 and PY = $5, what is the market rate of substitution between goods X and Y? Answer
| | 100. |
| | 4. |
| | -20. |
| | 25. |
The budget set defines the combinations of good X and Y that Answer
| | are desirable to the consumer.|
| | are affordable to the consumer.|
| | maximizes consumer's utility.|
| | maximizes supplier's profit.|
The difference between a price decrease and an increase in income is that Answer
| | A price decrease does not affect the consumption of other goods while an increase in income does.| | | An increase in income does not affect the slope of the budget line while a decrease in price does change the slope.| | | A price decrease decreases real income while an increase in income increases real income.| | | A price decrease leaves real income unchanged while an increase in income increases real income.| All else held constant, as additional firms enter an industry Answer

| | more output is available at each given price.|
| | less output is available at each given price.|
| | the same output is available at each given price.|
| | output could increase or decrease at each given price.| | | |

The law of demand states that, holding all else constant:
Answer
| | as price falls, demand will fall also.|
| | as price rises, demand will also rise.|
| | price has no effect on quantity demanded.|
| | as price falls, quantity demanded rises.|
The economic principle that producers are willing to produce more output when price is high is depicted by the: Answer
| | upward slope of the supply curve.|
| | extreme steepness of the supply curve.|
| | downward slope of the supply curve.|
| | interaction of the supply and demand curves.|
Good X is a normal good if an increase in income leads to
Answer
| | an increase in the supply for good X.|
| | an increase in the demand for good X.|
| | a decrease in the demand for good X.|
| | a decrease in the supply for good X.|
If there are few close substitutes for a good, demand tends to be relatively Answer
| | elastic.|
| | inelastic.|
| | unitary elastic.|
| | neither elastic, inelastic nor unitary elastic.|
Which of the following is used to determine the statistical significance of a regression coefficient? Answer
| | t-statistic.|
| | F-statistic.|
| | R-square.|
| | adjusted R-square.|

Assume that the price elasticity of demand is -0.75 for a certain firm's product. If the firm lowers price, the firm's managers can expect total revenue to Answer (lower than 1 so its inelastic)
| | decrease|
| | increase|
| | remain constant|
| | either increase or remain constant depending upon the size of the price decrease.| Assume that the price elasticity of demand is -2 for a certain firm's product. If the firm raises price, the firm's managers can expect total revenue to: Answer

| | Decrease|
| | Increase|
| | Remain constant|
| | Either increase or remain constant depending upon the size of the price increase.|  
 
What is the marginal cost of producing the fifth unit?
Answer
| | 270.|
| | 110.|
| | 50.|
| | 0.|
Scarce resources are ultimately allocated toward the production of goods most wanted by society because: Answer
| | firms attempt to maximize profits.|
| | they are most efficiently utilized in these areas.|
| | consumers demand inexpensive goods and services.|
| | managers are benevolent.|

The additional cost incurred by using an additional unit of the managerial control variable is defined as the: Answer...
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