Economics questions and answers?

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Question 1
Reference: Ref 5-5
(Exhibit: Demand for Macintosh Computers) The seller's total revenue at point S equals the:
Correct Answer: A. area 0PSM.

Question 2
Reference: Ref 3-5
(Exhibit: Demand and Supply-Determinants) The exhibit shows how supply and demand might shift in response to specific events. Suppose a drought destroys one-third of the nation's peanut crop. Which panel best describes how this will affect the market for peanuts?
Correct Answer: D. Panel (c)

Question 3
The principle stating that, for virtually all goods and services, there is a negative relationship between price and quantity demanded, all other things unchanged, is the law of:
Correct Answer: D. demand.

Question 4
Reference: Ref 5-3
(Exhibit: Demand and Price Elasticity 2) Price elasticity of demand for small changes in price in the neighborhood of point C:
Correct Answer: D. is -1.

Question 5
In the market for health care:
Correct Answer: D. B and C are true.

Question 6
If the current price is above the equilibrium price, we would expect:
Correct Answer: D. quantity supplied to exceed quantity demanded.

Question 7
Reference: Ref 3-6
(Exhibit: Demand Shifters and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose the birth rate (the number of babies per female in the childbearing age bracket) increases. Which panel best describes how this will affect the market for diapers?
Correct Answer: B. Panel (a)

Question 8
A ceiling price set in the policy of rent controls:
Correct Answer: D. may result in some people who rent out units to leave the business because they cannot cover costs.

Question 9
Which of the following will not cause the demand for milk (a normal good) to increase in the current time period?
Correct Answer: A. a fall in the price of milk

Question 10
Reference: Ref 5-7
(Exhibit: Nonlinear Demand Curve) The values for quantity demanded along this nonlinear demand curve are given by the formula Q = 24/P. For this curve:
Correct Answer: B. total revenue is constant at all prices.

Question 11
The price elasticity of demand for ground beef has been estimated to be -1.0. If mad cow disease strikes the United States and a large percentage of the cattle are removed from the market, how will that affect total expenditures on hamburger, all other things unchanged?
Correct Answer: A. total expenditures will remain unchanged

Question 12
Suppose the price elasticity of demand for oranges is -1.8. If a fall frost destroys one-third of the nation's orange crop, how will that affect total expenditures on oranges, all other things unchanged?
Correct Answer: D. total expenditures will fall

Question 13
The law of demand is illustrated when:
Correct Answer: C. an increase in the purchases of personal computers results from lower prices.

Question 14
In the Case in Point on "The Monks of St. Benedict's," the Monks got out of the egg business largely because:
Correct Answer: B. of the increase in the price of chicken feed.

Question 15
If the price of a good is increased by 15 percent and the quantity demanded falls by 20 percent, the price elasticity of demand is:
Correct Answer: A. price elastic.

Question 16
Reference: Ref 3-17
(Exhibit: The Market for Videotape Rentals) A decrease in buyers' income, assuming videotape rentals are a normal good, combined with a decrease in the wage rate paid to video rental store employees would result in a change illustrated by the move from:
Correct Answer: C. j to m in Figure (c).

Question 17
Reference: Ref 3-17
(Exhibit: The Market for Videotape Rentals) An increase in buyers' income, assuming videotape rentals are a normal good, would result in a change illustrated by the move from:
Correct Answer: B. f to g in Figure (a).

Question 18
Reference: Ref 4-4
(Exhibit: Third-Party Payers) When the price of $20 per visit becomes available to the consumer because of insurance:
Correct Answer: A. health-care costs become $180 million, of which $60 million is paid by consumers and $120 million is paid by insurance.

Question 19
Reference: Ref 4-3
(Exhibit: The Market for Health Care) At price P3 the total cost of health-care services compared to price P1 has increased from:
Correct Answer: C. OP1AQ1 to OP3BQ2.

Question 20
The market for health care is characterized by which of the following?
Correct Answer: D. all of the above

[roche]

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