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Question
Luxuries are distinguished from necessities by thea. high cross elasticity of demand of the former and the low cross elasticity of the latter.
b. high income elasticity of the former and the low income elasticity of the latter.
c. fact that luxuries have high prices and necessities have low ones.
d. sign of the cross elasticity of demand.
e. number of substitutes available for each.
Answer
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Related questions
Q:
One problem with using historical data to estimate demand is the
a. fact that people do not always buy what they need.
b. large number of interviews that must be conducted to gather information on buyers' intentions.
c. many variations in price necessary to measure changes in demand.
d. likelihood that the demand curve has shifted over the time period covered by the data.
e. need to have both price and quantity data to estimate demand.
Q:
The idea behind the direct market experiment to measure demand is to
a. see the effects on the quantity demanded of actual variations in the price of a product.
b. use statistical methods to estimate demand curves from historical data.
c. measure demand by interviewing consumers about their buying habits and intentions.
d. measure the effect of changes in variables, such as income or taste, on price.
e. measure the effect of changes in price on quantities supplied.
Q:
The following questions are based on the following graph. The curves D and S represent the market demand and supply curves for farm products in 19 The curves D1 and S1 represent the market demand and supply curves for farm products in It is supposed that there were no support programs in either year. The relatively large shift in the supply curve over the 40 years illustrates that
a. the quantity of food demanded does not vary much with the price of food because food is a necessity.
b. consumption of food per capita faces natural limits and hence responds by only a small amount to changes in per capita income.
c. farmers have only limited control over their outputs.
d. there has been rapid technological change in agriculture.
e. poor climatological conditions led to decreasing harvests.
Q:
Low or negative income elasticities of demand indicate that the items are
a. luxuries.
b. necessities.
c. unrelated.
d. substitutes.
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Q:
The percentage change in the quantity demanded of one commodity resulting from a 1 percent change in the price of a substitute commodity is called the ________ elasticity of demand.
a. income
b. price
c. cross
d. equilibrium
e. arc
Q:
The demand curve for the output of an individual firm is highly price elastic when it
a. shifts to the left.
b. is horizontal.
c. slopes upward to the right.
d. has a value of 0.15.
e. decreases as price falls.
Q:
The following questions are based on the following information regarding the gross monthly receipts of a miniature golf course in a resort community at the shore. Price per game
Gross monthly receipts $5.00
$43,750 $4.50
$45,000 $4.00
$45,000 $3.50
$43,750 $3.00
$41,250 $2.50
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Q:
If I spend $50 per week on gasoline, regardless of the price per gallon, my price elasticity of demand for gasoline is
a. 0.
b. 1.
c. 2.
d. infinite.
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Q:
A possible reason for the existence of increasing returns to scale is
a. the inability of a firm to increase all inputs proportionately.
b. the problems of coordination and control.
c. higher input prices.
d. larger fixed costs with a larger plant size.
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Q:
The fact that a single large factory may be more efficient than several smaller factories of the same total capacity is a reflection ofa. increasing returns to scale.b. the law of diminishing marginal returns.c. comparative advantage.d. the crowding-out effect.e. reproduction cost of assets.
Q:
The following questions are based on the following table: Units of output
Total cost
Average fixed cost
Average variable cost
Marginal cost 0 1 $10 2
$46 3 $20 4 $18 5
$130
$4 The average variable cost of producing 2 units is
a. $13.
b. $23.
c. $26.
d. $33.
e. $66.
Q:
The following questions are based on the following table: Units of output
Total cost
Average fixed cost
Average variable cost
Marginal cost 0 1 $10 2
$46 3 $20 4 $18 5
$130
$4 The total fixed cost is
a. $4.
b. $5.
c. $20.
d. $26.
e. $126.
Q:
As output increases, average variable cost first declines but eventually rises because
a. average variable cost is derived by dividing a constant, the total variable cost, by the output rate.
b. of the effect of the law of diminishing returns.
c. it represents the addition to total cost resulting from the last unit of output.
d. at higher output rates, fixed costs per unit are relatively large.
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Q:
The following questions are based on the following graph: In the previous question, if marginal cost for the 101st unit is $0.70, average variable cost must be
a. rising.
b. falling.
c. remaining the same.
d. equal to average total cost.
e. undeterminable from the information given.
Q:
The following questions are based on the following graph: If average total cost is $0.75 when output is 100 units and total fixed cost is $10, average variable cost is
a. $0.65.
b. $9.25.
c. $10.75.
d. $65.
e. $75.
Q:
The following questions are based on the following graph: At 50 units of output per day, total fixed cost is
a. $1,000.
b. $1,500.
c. $2,500.
d. $3,500.
e. $4,500.
Q:
Average fixed cost equals
a. total cost divided by output.
b. total cost minus total variable cost.
c. average total cost plus average variable cost.
d. total fixed cost minus total variable cost.
e. total fixed cost divided by output.
Q:
In the short run, the greater the level of output, the
a. greater the average fixed cost.
b. lower the total fixed cost.
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d. lower the total variable cost.
e. greater the total variable cost.
Q:
The following questions are based on the following information. Five adolescents are willing to buy the latest iPhone game at these prices: Letitia
$0.99 Alan
$1.29 Adrienne
$1.99 Sarah
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Q:
A consumer is in equilibrium when
a. total utility can be increased only by reallocating his or her money income.
b. the marginal utility for each commodity consumed is equal.
c. all of his or her income has been spent on goods and services.
d. any other allocation of his or her income among the commodities consumed leads only to a reduction in total utility.
e. the total utility received from all commodities is the same.
Q:
The decline in additional satisfaction received as more and more units of a commodity are consumed (the consumption of other commodities held constant) is known as the law of
a. consumer demand.
b. nature.
c. declining desire.
d. supply and demand.
e. diminishing marginal utility.
Q:
The law of diminishing marginal utility implies that
a. as people consume more and more goods, their happiness diminishes.
b. a person's satisfaction declines as more and more of a particular good is consumed.
c. a person's satisfaction rises indefinitely as additional units of a commodity are consumed.
d. increases in a person's satisfaction eventually decline as more and more units of a commodity are consumed.
e. as a person's income rises, consumption of all commodities falls.
Q:
The use of computerized photo composition methods allowed the Asbury Park Press to
a. lay off reporters.
b. reduce the number of pages in its paper.
c. tailor its editions to target specific regions.
d. more cheaply purchase the paper on which to print its newspaper.
e. raise the price at the newsstand without reducing sales.
Q:
Under diminishing marginal returns, as the amount of a variable input is reduced, the marginal product of a dollar's worth of the input will
a. exceed total product.
b. exceed average cost.
c. rise.
d. fall.
e. remain the same, but total input cost will rise.
Q:
Costs are clearly minimized for a given level of output as long as the firm
a. uses inputs that do not exhibit declining productivity.
b. pays the same price for all of its inputs.
c. is not able to increase output by substituting a dollar's worth of input A for a dollar's worth of input B, or vice versa.
d. can increase output without increasing its cost.
e. equates the marginal products of both inputs A and B.
Q:
The law of diminishing marginal returns means that as you increase the number of units of a variable input, after some point ________ will fall.
a. total output
b. costs of production
c. demand
d. marginal output
e. employment
Q:
The following questions are based on the following information:
A firm uses inputs of labor, fertilizer, and land to produce strawberries (which are sold to wholesalers and processors). The quantity of land used is fixed at eight acres per season and the production function implies the relationships in the following table: Number of units of labor
Bushels of strawberries produced per year 0
0 1
3,000 2
8,000 3
12,000 4
14,000 5
15,500 It can be said that this firm experiences diminishing returns beyond the employment of the ________ unit of labor.
a. first
b. second
c. third
d. fourth
e. fifth
Q:
The following questions are based on the following diagram illustrating the weekly average and marginal products for salespersons in the appliance department of a large department store: Diminishing marginal returns set in when adding the ________ salesperson.
a. first
b. second
c. third
d. fourth
e. fifth
Q:
If the average product of labor falls from 5 to 4.5 when a sixth unit of labor is added, the marginal product of this sixth person is
a. 27.
b. 9.5.
c. 4.5.
d. 2.
e. 0.5.
Q:
The following questions are based on the following production function: Number of person-hours
Quantity of oysters harvested (in bushels) 0
0 1
4 2
7 3
9 4
10 5
10.5 Person-hours of labor would be considered a(n) ________ input.
a. fixed
b. variable
c. average
d. break-even
e. diminishing