Microeconomics Study Set 46

Business

Quiz 2 :

Supply and Demand

Quiz 2 :

Supply and Demand

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An increase in the price of computer chips causes a decrease in the total revenue of computer chip manufacturers. The price elasticity of demand for computer chips is:
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C

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The price of baseball tickets increased by 5%, leading to a 3% decrease in the number of tickets sold. Given this specific situation, total expenditures on baseball tickets:
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C

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(Figure: Price Elasticity of Demand II) Which of the following statements is TRUE regarding the figure? img ​ ​ I. The price elasticity of demand is img ) II. The demand curve is perfectly inelastic. III. An increase in price has no effect on quantity demanded.
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C

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The supply curve of rubber balls is given by Q = 100P - 10. Which of the following is the equation for the inverse supply curve?
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Suppose that the demand curve for a new product can be expressed as QD = 900 - 3P. At what price is total expenditure maximized?
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Suppose that the market demand curve for sunflowers is a function of the price of sunflowers, the price of roses, and income. If the partial derivative of quantity demanded of sunflowers with respect to the price of roses is negative, sunflowers and roses are:
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Genetically modified soybean seed is an example of a new technology that has increased productivity. As a result, this new technology _____ production costs and _____ the supply of soybeans.
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The Internet has made learning to play a musical instrument easier than ever, with thousands of websites offering free music lessons. What happens in the market for musical instruments as a result of the availability of these free lessons?
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Suppose that the demand for a product is given by Q = 25 - 0.25P. If the product's price is $128 per unit, how many units will consumers be willing to buy?
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(Figure: The Market for Asparagus II) An excess supply of 3,000 pounds occurs at a price of: img
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Suppose that the inverse demand curve for energy drinks can be expressed as img . The price elasticity of demand at a quantity of 25 is:
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(Figure: Total Expenditures) As the price of the product rises from $0 to $40, what happens to total expenditures? img
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Suppose a fall in consumer income drives down the demand for lobster while a record harvest increases supply. How would these changes affect the equilibrium price and quantity of lobsters?
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(Figure: Market Shifts) Suppose that the demand curve in both markets shifts out by the same distance. The change in price will be larger in _____, and the change in quantity will be larger in _____. img
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The income elasticity of demand for dental services is 2.40, and the income elasticity of demand for nursing homes is 0.90. Based on these estimates, dental services are a(n) _____ and nursing home care is a(n) _____.
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Suppose that the demand and supply curves for a good are given by QD = 1,000/P and QS = 10P. What is happening in the market at a price of $2?
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(Figure: Market for Rubber Balls) According to the figure, what is the equation for the normal supply curve? img
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Suppose that the market demand curve for cauliflower is a function of the price of cauliflower, the price of broccoli, and income. If the partial derivative of quantity demanded of cauliflower with respect to income is positive,:
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The inverse supply equation for clay pots is P = 0.5Q S + 1; the inverse demand equation is P = -2QD + 15. Quantity is in thousands of units. What is the equilibrium quantity?
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If the price of crude oil increases and the number of people who own cars falls:
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