questions that i got wrong

Question 1

If a severe drought destroys a significant portion
of the peanut crop and peanut farmers’ revenues
increase, which of the following is true over the
observed range of prices?

(A) The demand for peanuts must be unit price
elastic.
(B) The demand for peanuts must be price elastic.
(C) The demand for peanuts must be price
inelastic.
(D) The supply of peanuts must be price inelastic.
(E) The supply of peanuts must be price elastic.

Answer 1

C

Question 2

51. Which of the following helps explain why the
    demand curve for a normal good is downward
    sloping?
    (A) The income and substitution effects move the
    quantity demanded in the same direction.
    (B) The income effect moves the quantity
    demanded in the opposite direction of the
    substitution effect.
    (C) The income effect dominates the substitution
    effect.
    (D) The substitution effect dominates the income
    effect.
    (E) With an increase in income, the consumer
    decreases consumption of the good.

Answer 2

C

Question 3

56. Firm XYZ produces and sells corn in a perfectly
    competitive market and hires its workers in a
    perfectly competitive labor market. Which of the
    following best describes the demand curve for
    XYZ’s corn and XYZ’s demand curve for labor?

Demand for XYZ’s XYZ’s Corn Labor Demand
(A) Horizontal Horizontal
(B) Horizontal Downward sloping
(C) Horizontal Vertical
(D) Downward sloping Downward sloping
(E) Downward sloping Horizontal

Answer 3

b

Question 4

51. Which of the following helps explain why the
    demand curve for a normal good is downward
    sloping?
    (A) The income and substitution effects move the
    quantity demanded in the same direction.
    (B) The income effect moves the quantity
    demanded in the opposite direction of the
    substitution effect.
    (C) The income effect dominates the substitution
    effect.
    (D) The substitution effect dominates the income
    effect.
    (E) With an increase in income, the consumer
    decreases consumption of the good.

Answer 4

C

Question 5

56. Firm XYZ produces and sells corn in a perfectly
    competitive market and hires its workers in a
    perfectly competitive labor market. Which of the
    following best describes the demand curve for
    XYZ’s corn and XYZ’s demand curve for labor?
    Demand for XYZ’s
    XYZ’s Corn Labor Demand
    (A) Horizontal Horizontal
    (B) Horizontal Downward sloping
    (C) Horizontal Vertical
    (D) Downward sloping Downward sloping
    (E) Downward sloping Horizontal

Answer 5

D