What Are the Benefits of Mobile Technology

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The demand for a product is inelastic with respect to price if: | 1)| consumers are largely unresponsive to a per unit price change.| | 2)| the elasticity coefficient is greater than 1.|
| 3)| a drop in price is accompanied by a decrease in the quantity demanded.| | 4)| a drop in price is accompanied by an increase in the quantity demanded.| Save
Question 2 (5 points)
 

A supply curve that is parallel to the horizontal axis suggests that: | 1)| the industry is organized monopolistically.|
| 2)| the relationship between price and quantity supplied is inverse.| | 3)| a change in demand will change price in the same direction.| | 4)| a change in demand will change the equilibrium quantity but not price.| Save

Question 3 (5 points)
 

An antidrug policy which reduces the supply of heroin might: | 1)| increase street crime because the addict's demand for heroin is highly inelastic.| | 2)| reduce street crime because the addict's demand for heroin is highly elastic.| | 3)| reduce street crime because the addict's demand for heroin is highly inelastic.| | 4)| increase street crime because the addict's demand for heroin is highly elastic.| Save

Question 4 (5 points)
 

The supply curve of a one-of-a-kind original painting is:
| 1)| relatively elastic.|
| 2)| relatively inelastic.|
| 3)| perfectly inelastic.|
| 4)| perfectly elastic.|
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Question 5 (5 points)
 

The formula for cross elasticity of demand is percentage change in: | 1)| quantity demanded of X/percentage change in price of X.| | 2)| quantity demanded of X/percentage change in income.| | 3)| quantity demanded of X/percentage change in price of Y.| | 4)| price of X/percentage change in quantity demanded of Y.| Save

Question 6 (5 points)
 

Compared to coffee, we would expect the cross elasticity of demand for: | 1)| tea to be negative, but positive for cream.|
| 2)| tea to be positive, but negative for cream.|
| 3)| both tea and cream to be negative.|
| 4)| both tea and cream to be positive.|
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Question 7 (5 points)
 

Assume that a 3 percent increase in income in the economy produces a 1 percent decline in the quantity demanded of good X. The coefficient of income elasticity of demand for good X is: | 1)| negative and therefore X is an inferior good.|

| 2)| negative and therefore X is a normal good.|
| 3)| positive and therefore X is an inferior good.|
| 4)| positive and therefore X is a normal good.|
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Question 8 (5 points)
 

Consumer surplus:
| 1)| is the difference between the maximum prices consumers are willing to pay for a product and the lower equilibrium price.| | 2)| the difference between the maximum prices consumers are willing to pay for a product and the minimum prices producers are willing to accept.| | 3)| the difference between the minimum prices producers are willing to accept for a product and the higher equilibrium price.| | 4)| rises as equilibrium price rises.|

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Question 9 (5 points)
 

At the output level defining allocative efficiency:
| 1)| the areas of consumer and producer surplus necessarily are equal.| | 2)| marginal benefit exceeds marginal cost the by the greatest amount.| | 3)| consumer surplus exceeds producer surplus by the greatest amount.| | 4)| the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output.| Save

Question 10 (5 points)
 

The smaller the number of good substitutes for a product, the greater will be the price elasticity of demand for it. | 1)| TRUE|
| 2)| FALSE|
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Question 11 (5 points)
 

Implicit and explicit costs are different in that:
| 1)| explicit costs are relevant only in the short run.| | 2)| implicit costs are relevant only in the short run.| | 3)| the latter refer to non-expenditure costs and the former to...
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