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- 1. Multiple Choice
An increase in the price of milk causes a decrease in the demand for cereal. The two products aresubstitutescomplementsunrelateddemand elastic - 2. Multiple ChoiceAdvertising, fashion trends, and new product introductions serve tocreate consumer needsincrease income effectivenesscreate consumer demandminimize the income effect
- 3. Multiple ChoiceThe movement shown in this graph represents a change in what?quantity demandedmarginal utilitydemanddemand elasticity
- 4. Multiple ChoiceBased on this graph, how many Beanie Babies™ were demanded at a price of $6 before they became a fad?100200300400
- 5. Multiple ChoiceThe movement in the graph shows that the quantity demanded of butter decreased because theprice of butter increasedthe price of margarine decreasedprice of butter decreasedthe price of margarine increased
- 6. Multiple ChoiceA business doubled the price of a product in order to increase profits. Which of the following scenarios might have occurred?A sharp increase in revenues demonstrated the elasticity of the product.A small increase in revenues demonstrated the unit elasticity of the product.A dramatic decline in revenues demonstrated the elasticity of the product.A dramatic decline in revenues demonstrated the inelasticity of the product.
- 7. Multiple ChoiceA demand schedule showsan upward-sloping curve that illustrates the positive relationship between price and quantity demanded.a listing of the various quantities demanded of a particular product at all prices that might prevail in the market.the fluctuations in demand that occurred over a specified period of time.the fluctuations in demand scheduled to occur over the following year.
- 8. Multiple ChoiceConsumers' willingness to replace a costly item with a less costly item is an example ofthe substitution effectthe income effectdemand elasticitylaw of diminishing marginal utility
- 9. Multiple ChoiceAn increase in the price of cameras results in a decrease in the demand for film. The two products aresubstitutesdemand elasticunrelatedcomplements
- 10. Multiple ChoiceWhen a customer's need for a product is not urgent, demand tends to beinelasticelasticcomplementaryunit elastic
- 11. Multiple ChoiceWhen a manufacturer of pain medication reduced the price of the medication by 30%, profits declined by almost exactly 30%. Demand for the product isinelasticelasticunit elasticcomplementary
- 12. Multiple ChoiceAccording to this demand curve, how many movie videos will be demanded at a price of $10?4006008001000
- 13. Multiple ChoiceAccording to this demand curve, if the price of movie videos increases from $14 to $16, the quantity demanded willfall from 600 to 400rise from 400 to 600fall from 400 to 200rise from 200 to 400
- 14. Multiple ChoiceWhich of the following choices could cause the movement shown in the graph?a decrease in incomean increase in the number of consumersa decrease in the price of a substitutean increase in the price of a complement
- 15. Multiple ChoiceWhat does the movement shown on this graph represent?a change in demandthe income effect
the inverse relationship between price and quantity demandedthe inverse relationship between price and marginal utilitydiminishing marginal utility - 16. Multiple ChoiceFind the price of $15 on the demand schedule. What point does this price and quantity correspond to in the graph?VWXY
- 17. Multiple ChoiceAll of the following can change the market supply curve EXCEPTthe number of sellersthe expectation that prices are about to increasea change in the demand for a productthe number of sellers offering the product
- 18. Multiple ChoiceThe supply of a product normally decreases ifthe cost of inputs goes downmore producers enter the market.the price of the product increases.taxes on the product increase.
- 19. Multiple ChoiceTotal cost is the sum of thefixed costs and overheadall variable costsfixed and variable costsfixed and marginal costs
- 20. Multiple ChoiceWhich products shown in the table are likely to have elastic demand?gasoline in general, services of medical doctorsfresh tomatoes, gasoline from a particular station, butterfresh tomatoes, gasoline in general, buttergasoline from a particular station, gasoline in general, butter
- 21. Multiple ChoiceWhich products shown in the table are likely to have inelastic demand?gasoline in general, services of medical doctorsfresh tomatoes, gasoline from a particular station, butterfresh tomatoes, gasoline in general, buttergasoline from a particular station, gasoline in general, butter
- 22. Multiple ChoiceBased on the graph, how does the market demand for concert tickets change if the price increases from $30 to $40?the demand curve shifts to the rightthe demand curve shifts to the leftquantity demanded decreased by 4,000quantity demanded increased by 4,000
- 23. Multiple ChoiceRent payments and property taxes would be counted astotal costvariable costsfixed costsmarginal costs
- 24. Multiple ChoiceThe level of profit-maximizing output is reached when marginal cost isdouble marginal revenueone-half of marginal revenueless than marginal revenueequal to marginal revenue
- 25. Multiple ChoiceWhen producers offer fewer products for sale at each and every price,the supply curve has shifted to the rightthe supply curve has shifted to the leftthe price per unit decreasesthey expect subsidies
- 26. Multiple ChoiceThe theory of production deals with the relationship between the factors of production andthe cost of new materialsthe cost of marginal returnsfixed coststhe output of goods and services
- 27. Multiple ChoiceMany businesses are engaging in e-commerce becausesubsidies are available to many e-commerce businesses.they are able to save on fixed and variable costs.operating costs never increase.variable costs can be almost eliminated.
- 28. Multiple ChoiceWhich of the following is NOT a reason why prices effectively perform the allocation function?Competitive markets find their own prices without interference.Prices favor neither the producer nor the consumer.Prices remain surprisingly stable despite unexpected events.Prices are easily understood.
- 29. Multiple ChoiceIn a market economy, a high price is a signal forproducers to supply more and consumers to buy less.producers to supply less and consumers to buy more.government to intervene to protect consumers.producers to supply less and consumers to buy less.
- 30. Multiple ChoiceThe federal minimum wage law demonstratesa price ceilinga price floora price equilibriuma market price
- 31. Multiple ChoiceAccording to this supply curve, 400 movie videos will be supplied at what price?$10$12$14$16
- 32. Multiple ChoiceAccording to this supply curve, if the price of movie videos decreases from $18 to $16, the quantity supplied willrise from 800 to 1000fall from 1000 to 800rise from 600 to 800fall from 800 to 600
- 33. Multiple ChoiceWhich of the following choices could cause the movement shown in the graph?technology improves productioninputs become cheaperthe number of firms increasestaxes increase
- 34. Multiple ChoiceThe movement shown in this graph represents a change in what?supplyquantity suppliedsupply elasticityproduction function
- 35. Multiple ChoiceWhich of the following choices could cause the movement shown in this graph?inputs become more expensivethe number of firms decreasestechnology improves productiontaxes increase
- 36. Multiple ChoiceWhat does the movement shown on this graph represent?a change in supplya change in quantity suppliedthe law of diminishing returnsa shift in the market supply curve
- 37. Multiple ChoiceBecause a modest price increase has little or no effect, the demand for the product iscomplementaryinelasticelasticunit elastic
- 38. Multiple ChoiceProfits will be maximized when marginal revenueis double marginal costequals marginal costis one-half marginal costexceeds marginal cost
- 39. Multiple ChoiceFor most products and services, increased price results indemand for fewer products.demand for more productsreduced demand for substitutesincreased demand for complements
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