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Please help me with my economics!!! I am having trouble…. the question are on the attached file and please just highlight the answers!!! If answers are right, I will use your services again!!!
>Sheet prices.
After a sudden decrease in demand (but before the price can adjust), the market experiences a:
quantity supplied is units and quantity demanded is 40 units. Equilibrium price in this market:
the demand.
the demand.
05, Ireland began taxing residents on how much garbage they threw away in an effort to promote recycling. In response, residents began burning trash (which is environmentally more harmful and resulted in an increase in burn victims as people accidentally set themselves on fire). This story suggests that the elasticity of demand for trash collection was more ______ than lawmakers believed because ______ than previously thought.
, or ? (HINT: Who would you hire for the job?)
B. shortage. for the tickets or to for the tickets?
2
1
2
A technological innovation in the production of golf balls increases ______ causing the price to ______ and the ______.
A.
quantity supplied; fall; quantity demanded to increase
B.
supply; rise; demand to decrease
C.
supply; fall; demand to increase
D.
supply; fall; quantity demanded to increase
5
If hipsters decide that Pabst Blue Ribbon has become cliché and they seek out a more iconic beverage, what will happen in the market for PBR?
A.
Demand will decrease, quantity supplied will decrease, and price will decrease.
B.
Supply will decrease, quantity demanded will decrease, and price will decrease.
C.
Demand will decrease, quantity demanded will decrease, and price will increase.
D.
Demand will decrease, quantity supplied will increase, and price will decrease.
7
When a market is competitive:
A.
buyers compete with sellers to try to get
lower
B.
buyers compete with other buyers, raising prices, and sellers compete with sellers, lowering prices.
C.
buyers compete with sellers and sellers compete with one another, but buyers do not compete with one another.
D.
everybody competes with everybody else.
8
The equilibrium quantity is the quantity at which:
A.
consumers’ willingness to pay equals producers’ willingness to sell.
B.
suppliers’ production is maximized.
C.
buyers have no unsatisfied wants.
D.
gains from trade are minimized.
11
If market supply increases:
A.
equilibrium price will decrease but equilibrium quantity will increase.
B.
equilibrium price will increase but equilibrium quantity will decrease.
C.
equilibrium price and quantity will both decrease.
D.
equilibrium price and quantity will both increase.
1
3
Imagine a free market in
equilibrium.
A.
surplus.
B.
shortage.
C.
no change.
D.
new equilibrium.
1
4
When there is a recession, the price of oil tends to fall because:
A.
the prices of substitutes for oil rise during recessions.
B.
incomes fall during a recession, and oil is a normal good.
C.
the supply of oil increases during a recession, due to technological change.
D.
people drive more during recessions while looking for employment.
15
Imagine a free market in which at a price of $
10
50
A.
is greater than $10.
B.
differs from $10 in an indeterminate direction.
C.
is less than $10.
D.
is equal to $10.
1
6
If demand decreases, ceteris paribus, market price will be ______ at the new equilibrium point.
A.
higher
B.
either higher or lower
C.
the same
D. lower
17
If the market for iPads experiences a surplus, then the:
A.
price of iPads will
fall.
B.
price of iPads will
rise.
C.
demand for iPads will rise.
D.
supply of iPads will fall.
18
The yearly shortage of Super Bowl tickets implies that the price of Super Bowl tickets is:
A.
set at the equilibrium price since they always sell out.
B.
not set by supply and demand, but instead by the NFL.
C.
below the equilibrium price.
D.
above the equilibrium price.
1
9
When the quantity supplied of a good exceeds the quantity demanded, there is a(n):
A. shortage.
B. surplus.
C.
opportunity cost.
D. equilibrium.
Quiz Chapter 05
1
The steeper a linear demand curve is the
A.
more elastic
B.
more normal the good.
C.
less elastic
D.
higher the price of the good.
2
If the absolute value of the price elasticity of demand for a good is 1.5, the good has a(n)
A.
elastic demand.
B.
unit elastic demand.
C.
unit
inelastic demand.
D. inelastic demand.
3
Which of the following probably has the most elastic demand?
A.
gasoline
B.
prescription medications
C.
toilet paper
D.
McDonald’s hamburgers
4
The supply of ancient Egyptian papyrus manuscripts is probably
A.
elastic.
B.
unit elastic.
C.
hyperelastic.
D.
inelastic.
6
The more quantity demanded responds to a change in the price of that good the _____ is for that good.
A.
more elastic supply
B.
less elastic supply
C.
more elastic demand
D.
less elastic demand
7
The demand for most goods tends to become ______ over time.
A.
downward sloping
B. more elastic
C.
more vertical
D. less elastic
8
In
20
A.
inelastic; there were fewer substitutes for trash collection
B.
elastic; there were more substitutes for trash collection
C.
elastic; the tax took up a larger part of residents’ budget
D.
inelastic; the tax took up a smaller part of residents’ budget
9
If the demand for heroin is inelastic and heroin users get the money to pay for heroin by committing crimes, policymakers who want to reduce crime should
A.
try to lower the price of heroin.
B.
make it harder to find heroin.
C.
try to raise the price of heroin.
D.
tax heroin.
10
The fundamental determinant of the elasticity of demand for a good is
A.
how easy it is to substitute the good for another.
B.
the opportunity cost of producing the good.
C.
the number of consumers in the market.
D.
the value that consumers place on one more unit of the good.
11
Gun buyback programs, such as the one instituted in Washington, D.C., tend to not be very effective because
A.
the programs tend to have a large impact on the price of guns on the street.
B.
the supply of the types of guns exchanged is highly elastic.
C.
the programs simply end up decreasing the elasticity of supply.
D.
the supply of the types of guns exchanged is not very elastic.
12
Suppose that along a given demand curve, price goes up by 10 percent, decreasing quantity demanded by 5 percent. The price elasticity of demand is
A.
–1/2.
B. 50
C.
impossible to calculate without specific prices and quantities.
D.
–2.
13
If the price of aluminum increases 4 percent, and the quantity supplied increases by 1 percent, what is the price elasticity of supply?
A.
–4.0
B.
0.25
C. 3
D. 4
16
If the demand for a good is elastic, then
A.
revenues increase when the price goes up.
B.
any change in price is matched by an equal and opposite percentage change in quantity, so revenues stay the same.
C.
revenues decrease regardless of the direction of the price change.
D.
revenues decrease when the price goes up.
18
On October 1, 2009, the Nintendo Wii’s Japanese price dropped from ¥25,000 to ¥20,000. In the three months after the price drop, Japanese sales of the Wii were approximately 1,040,000. Twelve months earlier, over the same interval at the high price, sales totaled 890,000. Using the midpoint method, what is the absolute value of the price elasticity of demand of a Wii console? Is it an elastic or inelastic good?
A.
1.43; inelastic
B.
1.43; elastic
C.
0.7; elastic
D.
0.7; inelastic
19
The supply of a good tends to be more elastic if
A.
production can be expanded without causing a big increase in the price of its inputs.
B.
a change in the price of the good causes only a small change in the quantity supplied.
C.
the good is considered a necessity good.
D.
an increase in production has only a minimal impact on demand for the good.
20
The elasticity of demand measures
A.
whether consumers will buy more or less as the price increases.
B.
a supplier’s estimate of market demand.
C.
how consumers substitute across goods when the price of one increases.
D.
how much less of a good or service consumers will buy when the price increases.
Chapter 07: Quiz
1
2
A forward market allows for the exchange of commodities in the ______ at prices that are settled upon in the ______.
A.
future; present
B.
past; present
C.
present; future
D.
present; present
3
Speculators
A.
help stabilize prices over time.
B.
cause prices to rise but never to fall.
C.
profit at the expense of consumers.
D.
profit by setting market prices at monopoly levels.
4
The Iowa Electronic Markets
A.
are where farmers buy and sell futures contracts.
B.
predicted that Obama would lose the election for president in 2008.
C.
have an excellent track record in predicting political events.
D.
create biased predictions because it does not use price signals.
5
During World War II, natural rubber (from rubber trees) became incredibly scarce. Some even feared its complete exhaustion. The development of synthetic rubber staved off this doomsday scenario. Explain why, just when the Allies needed it most, this turn in good fortune was likely not a coincidence?
A.
Natural rubber went out of fashion because of the superior quality of synthetic rubber.
B.
Scarcity raised the price of natural rubber, creating the incentive to invent a substitute.
C.
The opportunity cost of planting more rubber trees was high.
D.
They lacked the incentive to create higher-producing natural rubber trees.
6
A market is a form of
A.
regional economic planning.
B.
centralized economic planning.
C.
decentralized economic planning.
D.
economic non-planning.
7
Speculation often
A.
helps smooth price fluctuations.
B.
is illegal.
C.
generates large profits for only a small group of individuals.
D.
decreases economic efficiency.
8
The Hollywood Stock Exchange allows users to bet on the success of movies already produced. Imagine that a new exchange develops that allows users to bet on the success of movies not yet produced. A contract would pay some fraction of the film’s future gross earnings if the film actually gets produced, and users would have their money returned to them if the film were not made. Which of the following is NOT true?
A.
Studios could use such information to make films that are more popular and profitable.
B.
Studios would know in advance whether the prediction market was accurate.
C.
Studios could make better decisions about budgeting and marketing.
D.
Studios have an incentive to set up such a market.
10
How are oil prices and sugar prices related?
A.
As oil prices increase, producers divert sugar cane from sugar production to ethanol production.
B.
Oil prices and sugar prices are not related.
C.
Governments set the price of sugar (per ton) to equal 1.2 times the price of a barrel of oil.
D.
Governments set the price of sugar (per ton) to equal 45% the price of a barrel of oil.
11
Although large parts of beef cattle become meat products, other parts become leather jackets. As the demand for beef rises, what happens in the market for leather jackets?
A.
supply increases and price decreases
B.
supply decreases and price increases
C.
demand and price increase
D.
demand and price decrease
12 Speculators
A.
sometimes cause prices to rise and sometimes cause prices to fall.
B.
generally cause prices to rise.
C.
generally cause prices to fall.
D.
rarely influence prices.
13
The United States attempted to centrally plan the allocation of oil under the ______ Administration.
A.
Clinton
B.
Reagan
C.
Carter
D.
Nixon
14
Prediction markets
A.
are speculative markets designed so that prices can be interpreted as probabilities and used to make predictions.
B.
are widely subsidized by the government to improve information-gathering.
C.
are not very reliable sources of information.
D.
incentivize random guessing about the future.
15
A futures contract is
A.
a contract to rent a resource for a specified period with the option of buying it at the end of the lease.
B.
a contract to buy or sell commodities at some point in the future at a predetermined price.
C.
an investment security whose value depends on the prices of several other securities.
D.
the rate at which one currency trades for another currency.
16
The value of a unit of a good is given by the height of the
A.
demand curve only at equilibrium.
B.
supply curve only at equilibrium.
C.
demand curve at the quantity level corresponding to the unit.
D.
supply curve at the quantity level corresponding to the unit.
17
Dairy farmers use sawdust for milk cow bedding. What happened to the price of milk because of the housing slowdown in 2007?
A.
The price of milk fell as the demand for milk decreased.
B.
The price of milk rose as the demand for milk rose.
C.
The price of milk rose as the supply of milk decreased.
D.
The price of milk fell as the supply of milk increased.
18
Which of the following is NOT a difficulty of central planning?
A.
Communicating orders to everyone involved in production.
B.
Ensuring that planners have the incentive to move goods from low- to high-valued uses.
C.
The skills of central planners go unappreciated.
D.
Distinguishing between low- and high-value uses of an item.
Chapter 08: Quiz
1
A price ceiling
A.
has an effect only when it is set above the market price.
B.
is a maximum price allowed by law.
C.
has little effect on market activity.
D.
is a minimum price allowed by law.
2
Under a binding price ceiling, we expect the quality of a good to
A. fall.
B. rise.
C.
remain the same.
D.
change in an indeterminate direction.
3
If quantity supplied equals 85 units and quantity demanded equals 80 units under a price control, then it is a
A.
binding price ceiling.
B.
nonbinding price ceiling.
C.
non
binding price floor.
D. binding price floor.
4
Which of the following would NOT happen as the result of a price floor?
A.
misallocation of resources
B.
a surplus of the good
C.
lost gains from trade
D.
decreases in product quality
6
An employer has work that can be done in the same time by one high-skilled worker paid $50 an hour or by eight low-skilled workers paid $5 an hour each and the minimum wage is $7.25 an hour. In this scenario, who benefits from the minimum wage,
the high-skilled worker
the low-skilled workers
A.
both benefit equally
B. the high-skilled worker
C. the low-skilled workers
D.
It is impossible to say who benefits more.
8
A binding price floor leads to a(n)
A.
equilibrium quantity.
C. surplus.
D.
quantity of zero units.
9
If there are 100 tickets to a concert and 200 fans that would like to go to the concert, each placing a slightly different value on the tickets, is it more efficient to
hold an auction
hold a random drawing
A.
Both are equally efficient.
B. hold an auction
C.
It is impossible to say which is more efficient.
D. hold a random drawing
11
New housing takes some time to build, so rent control creates larger shortages in the
A.
short run than in the long run because long-run supply is more elastic.
B.
long run than in the short run because long-run supply is more elastic.
C.
long run than in the short run because short-run supply is more elastic.
D.
short run than in the long run because short-run supply is more elastic.
12
Which of the following do price ceilings not cause?
A.
bribes
B.
search costs
C.
speculation
D.
waiting in line
13
In Ancient Egypt, the “Bronze Law” set maximum prices for wages, preventing them from rising above what rulers perceived as the minimum needed to survive. If this was 10¢ a day for a porter (someone who carries things short distances) and the market wage was 8¢ a day, which of the following would be a plausible consequence of this law?
A.
Unemployment for porters would decrease.
B.
Porters would travel less quickly than they otherwise would.
C.
Porters would transport items they normally would not.
D.
Nothing unusual would happen.
14
When price floors are in effect goods and services
A.
are neither necessarily supplied by their lowest-cost producer nor do they flow to their highest-valued use.
B.
are not necessarily supplied by their lowest-cost producer.
C.
do not necessarily flow to their highest-valued use.
D.
are still allocated efficiently.
15
Mobile homes are housing units installed on a permanent foundation owned by a landlord. Although a resident owns the home, she rents the foundation from the landlord. In theory, owners of mobile homes can transfer their home to a different foundation if the rent becomes too steep, but uninstalling, transporting, and reinstalling the mobile home is usually prohibitively expensive. This “lock-in” effect encourages state legislatures to create rent controls for mobile home foundations. Which of the following is a plausible unintended consequence of these laws?
A.
The price of transporting mobile homes is artificially high.
B.
The price of mobile homes is artificially low.
C.
There are few new buyers of mobile homes.
D.
There are few new mobile home foundations constructed.
16
Regulation of airline fares under the Civil Aeronautics Board
A.
created incentives for optimal resource allocation.
B.
meant the government prevented the entry of new competitors to maintain high ticket prices.
C.
lead to greater innovation in the airline industry at a cost of higher ticket prices.
D.
made it possible for lower-income Americans to afford air travel for the first time.
17
Deadweight loss occurs when
A.
consumer and/or producer surplus decrease without the surplus going to anyone.
B.
consumer surplus transforms into producer surplus.
C.
the gains from trade are lowered due to shifts in the supply or demand curve.
D.
there is a shortage of a good or service.
18
Which of these statements explains why price ceilings result in lost gains from trade?
A.
Buyers want to trade, but sellers are indifferent at the lower prices.
B.
Buyers and sellers want to trade, but the threat of fines or jail time prevents them from doing so.
C.
Sellers want to trade, but buyers prefer the lower prices.
D.
Neither buyers nor sellers want to trade subject to a price ceiling resulting in lost gains from trade.
19
When a price ceiling is in effect
A.
there is no competition for goods.
B.
demanders compete for goods in short supply by accepting reductions in quality.
C.
suppliers compete for customers by inefficiently raising quality levels.
D.
suppliers have an incentive to provide really good customer service.
