# econ312 week 2 homework latest 2017 august

## 1. Consider the market for cell phones. Suppose using cell phones becomes more popular. Explain the effect of this event on the quantity of cell phones demanded and on the demand for cell phones.

A. The quantity of cell phones demanded decreases.

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B. The quantity of cell phones demanded decreases and the demand for cell phones also decreases.

C. The demand for cell phones increases.

D. The quantity of cell phones demanded increases.

E. The demand for cell phones decreases.

Answer: The quantity of cell phones demanded decreases

## 2, Consider the U.S. market for ice skates. Suppose the price of a pair of ice skates rises. Explain the effect of this event on the quantity of ice skates demanded and on the demand for ice skates.

A. The quantity of ice skates demanded is unchanged and the demand for ice skates decreases.

B. The quantity of ice skates demanded decreases and the demand for ice skates also decreases.

C. The quantity of ice skates demanded increases and the demand for ice skates is unchanged.

D. The quantity of ice skates demanded decreases and the demand for ice skates is unchanged.

E. The quantity of ice skates demanded increases and the demand for ice skates also increases.

Answer: The quantity of ice skates demanded increases and the demand for ice skates is unchanged.

## 3. For consumers, donuts and chocolate chip cookies are substitutes. If the price of a donut decreases?, the demand for chocolate chip cookies will? _______.

A. increase?, and the demand curve for chocolate chip cookies will shift rightward

B. decrease?, and the demand curve for chocolate chip cookies will shift leftward

C. increase or? decrease, but the demand for donuts will not change

D. not? change, but there will be a movement along the demand curve for chocolate chip cookies

Answer:  Increase, and the demand curve for ski jackets will shift rightward

## 4. Adrienne graduates from college and her income increases by ?\$30,000. Nothing else changes. Adrienne decreases the quantity of pasta and potato chips that she buys and increases the quantity of classical music CDs that she buys.For Adrienne?,_______.

A. classical music CDs and potato chips are normal goods

B. pasta and classical music CDs have become substitutes

C. pasta and potato chips are inferior goods

D. pasta and potato chips have become complements

## 5. Jeb makes the following four statements about peanuts. Which statement best describes his quantity demanded in the peanut? market?

A. ?I’ll stop eating peanuts when I can afford to buy walnuts.

B. At a price of? \$1 per? pack, I plan to buy 2 packs of peanuts per week.

C. If peanuts were less? expensive, I’d buy them more often.

D. I eat peanuts to complement cola.

Answer: At a price of​ \$1 per​ pack, I plan to buy 2 packs of peanuts per week.

## 6. A demand schedule is a list of the? ______ at each different price when all other influences on buying plans remain the same. A demand curve is a graph of? _____ .???

A. quantities actually? bought; quantities demanded

B. quantities? demanded; a demand schedule

C. surpluses; price falls

D. shortages; price rises

Answer: quantities​ demanded; a demand schedule

## 7. A substitute is a good that is _____ another good, and a complement is a good that is _____ another good.?

A. consumed together? with; consumed in place of

B. produced in place? of; sold with

C. consumed in place? of; produced with

D. consumed in place? of; consumed together with

Answer: consumed in place​ of; consumed together with

## 8. In the market for skim milk, the price of a carton of skim milk falls. Explain the effect of this event on the quantity of skim milk supplied and on the supply of skim milk.

A. The supply of skim milk is unchanged and the quantity of skim milk supplied increases.

B. The supply of skim milk decreases and the quantity of skim milk supplied is unchanged.

C. The quantity of skim milk supplied decreases and the supply of skim milk also decreases.

D. The quantity of skim milk supplied decreases and the supply of skim milk is unchanged.

E. The quantity of skim milk supplied increases and the supply of skim milk also increases

Answer: The quantity of skim milk supplied decreases and the supply of skim milk is unchanged

## 9. Aqua Springs makes the following four statements about bottled spring water. Which statement best describes the? firm’s quantity supplied in the bottled water? market?

A. We would sell more water if the demand for it were greater.

B. ?We’ll switch from plain water to flavored water is flavored is more profitable.

C. At a price of? \$1 gallon, we plan to sell? 2,000 gallons per day.

D. If we could get a higher? price, we’d bottle more water.

Answer: At a price of​ \$1 gallon, we plan to sell​ 2,000 gallons per day.

## 10. A supply schedule is a list of the? ______ at each different price when all other influences on selling plans remain the same. A supply curve is a graph of? _____ .

A. quantities? supplied; quantities supplied

B. quantities actually? sold; a supply schedule

C. quantities? supplied; a supply schedule

D. quantities actually? sold; quantities supplied

Answer: quantities? supplied; a supply schedule

## 11. The table shows the demand and supply schedules for chocolate bars. If the price is \$1.55 a chocolate bar?, the quantity supplied? _____ the quantity demanded and? _____ exists. As the price of a chocolate bar ?____, the quantity demanded? _____, the quantity supplied? _____, and the market moves to equilibrium.

A. is less ?than; a shortage?; rises?; increases?; decreases

B. ?equals; neither a shortage nor a? surplus; remains the? same; remains the? same; remains the same

C. is less than; a shortage; rises?; decreases?;increases

D. is greater ?than; a surplus?; falls?; decreases?; increases

E. is greater ?than; a surplus?; falls?; increases?; decreases

## 12. The table shows the demand and supply schedules for candy. If the price of a bag of candy is \$50, a _________occurs in the market for candy. To restore market? equilibrium, the price of a bag of candy ______, the quantity demanded ______, and the quantity supplied? ______.When the market reaches equilibrium, the? ______ is eliminated.?

A. rises?; increases?; decreases?;shortage

B. falls?; increases ?; decreases?; surplus

C. rises ?; decreases ?; increases ?; shortage

D. falls ?; decreases ?; increases ?; surplus

E. falls ?; decreases ?; increases ?; shortage

## 13. A decrease in the demand for golf clubs brings a ______ of golf clubs at the original? price, and the price of a set of golf clubs will? ______ .

A shortage?; a rise

B. surplus?; fall

C. shortage?; fall

D. surplus?; rise

## 14. When floods wiped out the banana crop in Central? America, the equilibrium price of bananas? ______ and the equilibrium quantity of bananas? ______.

A. fell; decreased

B. rose; decreased

C. rose; increased

D. fell; increased

## 15. Many Americans are selling their used cars and buying new? fuel-efficient hybrids. Other things remaining the? same, in the market for used cars, ______ and in the market for hybrids______.

A. demand decreases and the price? rises; supply increases and the price falls

B. both demand and supply decrease and the price might? rise, fall, or not? change; demand increases and the price rises

C. demand? decreases, supply? increases, and the price? falls; supply increases and the price falls

D. supply increases and the price falls; demand increases and the price rises

Answer: supply increases and the price falls; demand increases and the price rises

## 16. When the price of a good increased by 10 ?percent, the quantity demanded of it decreased 2 percent. Most? likely, this good? ______ and ? ______.

A. is a luxury?; is narrowly defined

B. has poor substitutes?; is a luxury

C. is a necessity?; has good substitutes

D. is a necessity?; has poor substitutes

E. is broadly defined?; is a luxury

Answer: is a necessity?; has poor substitutes

## 17. The price elasticity of demand for Loretta pizza is 2.2.Loretta wants to increase her total revenue. Loretta should? _____ the price of her pizza because the demand for pizza is ______.

A. lower?; unit elastic

B. raise?; elastic

C. raise; inelastic

D. lower?; elastic

E. lower?; inelastic

## 18. A decrease in tuition fees will decrease your? college’s total revenue if the price elasticity of demand for college education is______.

A. equal to 1

B. negative

C. greater than 1

D. greater than zero and less than 1

A. inelastic

B. elastic

C. decreasing

D. unit elastic

E. increasing

A. 0.33

B. 3.00

C. 0.67

D. 1.50

## 21. The quantity demanded of good A increases by 5 percent when the price of good B rises by 10 percent and other things remaining the same. The cross elasticity of demand of good A with respect to good B is he cross elasticity of demand tells us that good A and good B are? ______ and as the price of good B? rises, the demand for good A? ______.

A. complements?; increases

B. normal goods?; decreases

C. complements?; decreases

D. substitutes?; increases

## 22. In Music Ville, the price elasticity of demand for CD players is 1.3?, the income elasticity of demand for CD players is 0.4?, and the cross elasticity of demand for CD players with respect to MP3s is 0.1. CD players and MP 3 sMP3s are? ______.

A. substitutes

B. inferior goods

C. luxury goods

D. complements

## 23. When incomes in Miami rise by 10 percent and other things remain the? same,?

1. the quantity demanded of frozen fish cakes decreases by 5 percent and

2. the quantity demanded of fresh fish increases by 15 percent.

Answer: the quantity demanded of frozen fish cakes decreases by 5 percent

## 24. Which method is used to allocate strategic resources in the military?

A. first-come, first-served

B. command

C. contest

D. market price

E. majority rule

## 25. Which method is used to allocate the Academy Awards?

A. contest

B. personal characteristics

C. market price

D. sharing equally

E. lottery

## 26. The graph shows the demand curve for blankets and the market price of a blanket. Draw a point that shows the value of the 20th blanket. The value of the 20th blanket is? _______.??

B. the maximum price that someone is willing to pay for the 20th blanket

C. the cost of producing the 20th blanket

D. the price of the 20th blanket

## 27. The graph shows the market for wool. Draw a shape that represents the consumer surplus from wool. Label it CS. Draw a shape that represents the producer surplus from wool. Label it PS.

Consumer surplus from wool equals ?\$________.?

Producer surplus from wool equals ?\$_______

The market for wool is efficient because? ______.

A. consumer surplus is greater than zero

B. the market is producing the maximum possible quantity given the constraints on technology and capital

C. consumer surplus is greater than producer surplus

D. at the market equilibrium marginal benefit equals marginal? cost, and total surplus is maximized

## 28. All of the following are sources of inefficiency except? _______.

A. monopoly

B. taxes and subsidies

C. competition

D. price and quantity regulations

## 29. Taxes lead to? _______ , and subsidies lead to? _______.

A. overproduction; underproduction

B. underproduction; overproduction

C. underproduction; underproduction

D. overproduction; overproduction

## 30. A regulation that puts a price cap on apartment rents leads to? _______. A monopoly leads to? _______.

A. overproduction; overproduction

B. underproduction; underproduction

C.underproduction; overproduction

D. overproduction; underproduction

## 31. Market failure arises if ______.

A. the deadweight loss is zero

B. total surplus is not maximized

C. producer surplus exceeds consumer surplus

D. there is overproduction of the good but not if there is underproduction

Answer: there is overproduction of the good but not if there is underproduction

Liberty RLGN 104 Test 8 – Tolerance should be viewed in reference

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