Microeconomics Quiz 2 - Custom Scholars
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# Microeconomics Quiz 2

question
If Elastic, price down
total revenue goes up
question
If inelastic, price down
total revenue goes down
question
If demand perfectly elastic then the burden is on
the producers
question
If demand perfectly inelastic then the burden is on
the consumers
question
If supply is perfectly inelastic, then the burden is
all on the sellers (producers)
question
If supply is perfectly elastic, then the burden is
question
If relatively inelastic, then the burden is on
mostly the consumers
question
If relatively elastic, then the burden is on
mostly the producers
question
If the demand curve for a good is downward sloping and the supply curve for the good is
perfectly inelastic, the loss in buyers' and sellers' profits from a per unit tax on purchasers
of the good will be greater than the revenue the government receives from the tax.
False
question
If the supply curve for a good is perfectly elastic and the demand curve for the good is
downward sloping, a per unit tax on the good will cause buyers that continue to buy to
lose profits equal to the revenue raised by the tax.
True
question
Suppose Bob is maximizing his utility subject to his budget constraint. If his marginal
utility for hot dogs is greater than his marginal utility for juice boxes, then hot dogs must
be more expensive than juice boxes
True
question
If the supply curve for a good is perfectly elastic and the demand curve for the good is downward
sloping, a sales tax on the good will cause losses to consumers that exceed the revenue raised by the tax.
True
question
A profit-maximizing firm will always want to hire an additional worker if the value of
the average product of labor is greater than the wage.
False
question
If a competitive industry with free entry and exit is in long-run equilibrium, any firm
that is not currently producing in the industry could not make a profit by entering the
industry.
True
question
Total Cost =
variable cost + fixed cost
question
average cost =
total cost / quantity
question
∆R/R =
∆q/q + ∆p/p
question
Elastic Demand < -1
quantity effects dominates
question
Inelastic Demand > -1
price effect dominates
question
If the average variable cost of a firm increases as output increases and the firm desires to maximize its profits, it
should produce the output at which its average variable cost is equal to the price it receives for each unit of
output.
False
question
If the minimum wage is above the competitive equilibrium wage, an increase in the minimum wage will
increase voluntary unemployment.
False
question
If the demand for a good is inelastic, the demand curve has not changed, and consumers are spending more on
the good than before, the supply curve has shifted out (more supply at every price).
False
1 of 22
question
If Elastic, price down
total revenue goes up
question
If inelastic, price down
total revenue goes down
question
If demand perfectly elastic then the burden is on
the producers
question
If demand perfectly inelastic then the burden is on
the consumers
question
If supply is perfectly inelastic, then the burden is
all on the sellers (producers)
question
If supply is perfectly elastic, then the burden is
question
If relatively inelastic, then the burden is on
mostly the consumers
question
If relatively elastic, then the burden is on
mostly the producers
question
If the demand curve for a good is downward sloping and the supply curve for the good is
perfectly inelastic, the loss in buyers' and sellers' profits from a per unit tax on purchasers
of the good will be greater than the revenue the government receives from the tax.
False
question
If the supply curve for a good is perfectly elastic and the demand curve for the good is
downward sloping, a per unit tax on the good will cause buyers that continue to buy to
lose profits equal to the revenue raised by the tax.
True
question
Suppose Bob is maximizing his utility subject to his budget constraint. If his marginal
utility for hot dogs is greater than his marginal utility for juice boxes, then hot dogs must
be more expensive than juice boxes
True
question
If the supply curve for a good is perfectly elastic and the demand curve for the good is downward
sloping, a sales tax on the good will cause losses to consumers that exceed the revenue raised by the tax.
True
question
A profit-maximizing firm will always want to hire an additional worker if the value of
the average product of labor is greater than the wage.
False
question
If a competitive industry with free entry and exit is in long-run equilibrium, any firm
that is not currently producing in the industry could not make a profit by entering the
industry.
True
question
Total Cost =
variable cost + fixed cost
question
average cost =
total cost / quantity
question
∆R/R =
∆q/q + ∆p/p
question
Elastic Demand < -1
quantity effects dominates
question
Inelastic Demand > -1
price effect dominates
question
If the average variable cost of a firm increases as output increases and the firm desires to maximize its profits, it
should produce the output at which its average variable cost is equal to the price it receives for each unit of
output.
False
question
If the minimum wage is above the competitive equilibrium wage, an increase in the minimum wage will
increase voluntary unemployment.
False
question
If the demand for a good is inelastic, the demand curve has not changed, and consumers are spending more on
the good than before, the supply curve has shifted out (more supply at every price).
False

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