ECO 2305 Exam 2 TTU - Custom Scholars
Home » Flash Cards » ECO 2305 Exam 2 TTU

ECO 2305 Exam 2 TTU

question
The price elasticity of supply for the Hope Diamond is zero because there is only one. Therefore, the supply curve for the Hope Diamond is:
perfectly inelastic
question
The market equilibrium is only efficient if:
all relevant costs and benefits are reflected in the market supply and demand curves
question
A firm earns a normal profit when its:
economic profit is zero
question
Which of the following will cause an increase in market supply?
a technological innovation that lowers the marginal cost of producing the good
question
Suppose two demand curves intersect and so have a point in common. At that point, demand shown by the steeper curve will be ____________ than the flatter curve.
less elastic than
question
If the price of cheese falls by 1% and the quantity demanded rises by 3%, then the price elasticity of demand for cheese is equal to:
3
question
The tendency for consumers to purchase more of a good or service as its price falls is captured by:
the law of demand
question
On a given linear demand curve, as price increases demand becomes:
more elastic
question
To increase total revenue, ______ demand should lower price, and firms with ________ demand should increase price.
elastic; inelastic
question
A demand curve that is drawn as a vertical line has a price elasticity of demand equal to:
0
question
Which of the following would be considered a factor of production in the provision of bus service?
bus drivers
question
One difference between the long run and the short run in a perfectly competitive industry is that:
firms necessarily earn zero economic profit in the long run but may earn positive or negative economic profit in the short run
question
In general, when the price of a fixed factor of production increases:
the profit maximizing level of output does not change
question
If the absolute value of the price elasticity of demand for cell phone service is 3, then if the price of cell phone service increases by 1%, quantity demanded would:
decrease by 3%
question
When the price of hot dogs is \$1.50 each, 500 hot dogs are sold every day. After the price falls to \$1.35 each, 510 hot dogs are sold every day. At the original price, what is the price elasticity of demand for hot dogs?
0.2
question
If a 10% decrease in price for a good results in a 20% increase in quantity demanded, the price elasticity of demand is:
2
question
Which of the following is most likely to be a fixed factor of production at a pizza restaurant?
the size of the seating area
question
A firm should shut down if its total revenue is less than its _______ even when the firm produces the level of output at which the price equals marginal cost.
variable cost
question
The price elasticity of demand is a measure of:
the change in quantity demanded of a good that results from a change in its price
question
Demand tends to be ______ in the short run than in the long run.
less elastic
question
If the absolute value of slope of the demand curve is 2.5, price is \$6 per unit, and the quantity demanded is 8 units, then the price elasticity of demand is:
0.3
question
Suppose a 10% increase in the price of aspirin leads to a 5% decrease in the quantity demanded of aspirin. The demand for aspirin is:
inelastic
question
One assumption of the perfectly competitive model is free entry and exit. This assumption most directly leads to the implication that:
positive economic profit is only possible in the short run
question
Assume that the production technology required to produce goods X and Y is very similar. If a firm that is producing good X notices that the market price of good Y is rising, it will:
shift into producing good Y
question
Which of the following is a defining characteristic of all perfectly competitive markets?
All firms sell the same standardized product
question
If a 1% increase in the price of oranges leads to a 5% increase in the quantity supplied, the price elasticity for the supply of oranges is:
5
question
One implication of the shape of the demand curve facing a perfectly competitive firm is that:
if the firm increases its price above the market price, it will earn zero revenue
question
A rational seller will sell another unit of output:
if the cost of making another unit is less than the revenue gained from selling another unit
question
If the cross-price elasticity of demand between blueberries and yogurt is negative, then the two goods are:
complements
question
Economic theory assumes that a firm's goal is to:
maximize its economic profit
question
In general, perfectly competitive firms maximize their profit by producing the level of output at which:
marginal cost equals price
question
Mary Jane is willing to babysit for \$6 an hour. Her neighbor has asked her to babysit for \$8 an hour. Assuming Mary Jane accepts the offer:
her economic rent will be \$2 per hour
question
Adam Smith coined the term "invisible hand" to describe the process by which the actions of independent, self-interested buyers and sellers will:
often lead to the most efficient allocation of resources
question
A firm that produces a good with many substitutes will most likely find that:
lowering its price will increase total revenue
question
The long run is best defined as:
a period of time sufficiently long that all factors of production are variable
question
If the percentage change in the price of a good is equal to the percentage change in the quantity demanded of that good, then the demand for that good is:
unit elastic
question
According to the law of demand, when the price of shoes _____ people will consume ______ shoes.
falls; more
question
The role that prices play in distributing scarce goods and services to those consumers who value them the most highly is known as the _______ function of price.
rationing
question
An increase in consumers' demand for espresso will lead to an increase in _____, while an increase in the number of firms producing espresso will lead to an:
quantity supplied; increase in supply
question
The price elasticity of demand equals 1:
at the midpoint of a straight-line demand curve
question
Suppose all firms in a perfectly competitive industry are earning an economic profit. One would expect that, over time, the number of firms in the industry will ______ and the market price will ________.
rise; fall
question
When the price of a perfectly competitive firm's output rises:
the firm will produce more
question
Individual supply curves generally slope _______ because ________.
upward; of increasing opportunity costs
question
As one moves down along a linear demand curve (i.e., from high price, low quantity pairs to low price, high quantity pairs), demand:
becomes less elastic
question
Suppose 30 employee-hours can produce 50 units of output. Assuming the law of diminishing marginal returns is present, to produce 100 units of output would require:
question
The championship game will be held next weekend in your college's 40,000-seat stadium. The supply of tickets to the game:
is perfectly inelastic
question
If consumers can easily switch to a close substitute when the price of a good increases, demand for that good is likely to be:
elastic
question
When Acme Dynamite produces 250 units of output, its variable cost is \$2,000, and its fixed cost is \$500. It sells each unit of output for \$25. When Acme Dynamite produces 250 units of output, its profit is:
\$3,750
1 of 48
question
The price elasticity of supply for the Hope Diamond is zero because there is only one. Therefore, the supply curve for the Hope Diamond is:
perfectly inelastic
question
The market equilibrium is only efficient if:
all relevant costs and benefits are reflected in the market supply and demand curves
question
A firm earns a normal profit when its:
economic profit is zero
question
Which of the following will cause an increase in market supply?
a technological innovation that lowers the marginal cost of producing the good
question
Suppose two demand curves intersect and so have a point in common. At that point, demand shown by the steeper curve will be ____________ than the flatter curve.
less elastic than
question
If the price of cheese falls by 1% and the quantity demanded rises by 3%, then the price elasticity of demand for cheese is equal to:
3
question
The tendency for consumers to purchase more of a good or service as its price falls is captured by:
the law of demand
question
On a given linear demand curve, as price increases demand becomes:
more elastic
question
To increase total revenue, ______ demand should lower price, and firms with ________ demand should increase price.
elastic; inelastic
question
A demand curve that is drawn as a vertical line has a price elasticity of demand equal to:
0
question
Which of the following would be considered a factor of production in the provision of bus service?
bus drivers
question
One difference between the long run and the short run in a perfectly competitive industry is that:
firms necessarily earn zero economic profit in the long run but may earn positive or negative economic profit in the short run
question
In general, when the price of a fixed factor of production increases:
the profit maximizing level of output does not change
question
If the absolute value of the price elasticity of demand for cell phone service is 3, then if the price of cell phone service increases by 1%, quantity demanded would:
decrease by 3%
question
When the price of hot dogs is \$1.50 each, 500 hot dogs are sold every day. After the price falls to \$1.35 each, 510 hot dogs are sold every day. At the original price, what is the price elasticity of demand for hot dogs?
0.2
question
If a 10% decrease in price for a good results in a 20% increase in quantity demanded, the price elasticity of demand is:
2
question
Which of the following is most likely to be a fixed factor of production at a pizza restaurant?
the size of the seating area
question
A firm should shut down if its total revenue is less than its _______ even when the firm produces the level of output at which the price equals marginal cost.
variable cost
question
The price elasticity of demand is a measure of:
the change in quantity demanded of a good that results from a change in its price
question
Demand tends to be ______ in the short run than in the long run.
less elastic
question
If the absolute value of slope of the demand curve is 2.5, price is \$6 per unit, and the quantity demanded is 8 units, then the price elasticity of demand is:
0.3
question
Suppose a 10% increase in the price of aspirin leads to a 5% decrease in the quantity demanded of aspirin. The demand for aspirin is:
inelastic
question
One assumption of the perfectly competitive model is free entry and exit. This assumption most directly leads to the implication that:
positive economic profit is only possible in the short run
question
Assume that the production technology required to produce goods X and Y is very similar. If a firm that is producing good X notices that the market price of good Y is rising, it will:
shift into producing good Y
question
Which of the following is a defining characteristic of all perfectly competitive markets?
All firms sell the same standardized product
question
If a 1% increase in the price of oranges leads to a 5% increase in the quantity supplied, the price elasticity for the supply of oranges is:
5
question
One implication of the shape of the demand curve facing a perfectly competitive firm is that:
if the firm increases its price above the market price, it will earn zero revenue
question
A rational seller will sell another unit of output:
if the cost of making another unit is less than the revenue gained from selling another unit
question
If the cross-price elasticity of demand between blueberries and yogurt is negative, then the two goods are:
complements
question
Economic theory assumes that a firm's goal is to:
maximize its economic profit
question
In general, perfectly competitive firms maximize their profit by producing the level of output at which:
marginal cost equals price
question
Mary Jane is willing to babysit for \$6 an hour. Her neighbor has asked her to babysit for \$8 an hour. Assuming Mary Jane accepts the offer:
her economic rent will be \$2 per hour
question
Adam Smith coined the term "invisible hand" to describe the process by which the actions of independent, self-interested buyers and sellers will:
often lead to the most efficient allocation of resources
question
A firm that produces a good with many substitutes will most likely find that:
lowering its price will increase total revenue
question
The long run is best defined as:
a period of time sufficiently long that all factors of production are variable
question
If the percentage change in the price of a good is equal to the percentage change in the quantity demanded of that good, then the demand for that good is:
unit elastic
question
According to the law of demand, when the price of shoes _____ people will consume ______ shoes.
falls; more
question
The role that prices play in distributing scarce goods and services to those consumers who value them the most highly is known as the _______ function of price.
rationing
question
An increase in consumers' demand for espresso will lead to an increase in _____, while an increase in the number of firms producing espresso will lead to an:
quantity supplied; increase in supply
question
The price elasticity of demand equals 1:
at the midpoint of a straight-line demand curve
question
Suppose all firms in a perfectly competitive industry are earning an economic profit. One would expect that, over time, the number of firms in the industry will ______ and the market price will ________.
rise; fall
question
When the price of a perfectly competitive firm's output rises:
the firm will produce more
question
Individual supply curves generally slope _______ because ________.
upward; of increasing opportunity costs
question
As one moves down along a linear demand curve (i.e., from high price, low quantity pairs to low price, high quantity pairs), demand:
becomes less elastic
question
Suppose 30 employee-hours can produce 50 units of output. Assuming the law of diminishing marginal returns is present, to produce 100 units of output would require:
question
The championship game will be held next weekend in your college's 40,000-seat stadium. The supply of tickets to the game:
is perfectly inelastic
question
If consumers can easily switch to a close substitute when the price of a good increases, demand for that good is likely to be:
elastic
question
When Acme Dynamite produces 250 units of output, its variable cost is \$2,000, and its fixed cost is \$500. It sells each unit of output for \$25. When Acme Dynamite produces 250 units of output, its profit is:
\$3,750

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.