Wrong Questions

Question 1

An inferior good is a good for which demand

Answer 1

decreases when income increases

Question 2

when demand decreases and supply does not change equilibrium price

Answer 2

falls and equilibrium quantity decreases

Question 3

when a supply curve shows the relation between the quantity of a good, a producer is willing to supply

Answer 3

the price of the good. usually a supply curve had a positive curve

Question 4

sam’s demand curve for pizza is

Answer 4

the same as the MB curve for pizza

Question 5

marginal cost curve shows

Answer 5

the minimum price sellers must receive to produce an additional unit of a good/ service

Question 6

in general, the higher the proportion of resources devoted to technological research in an economy the :

A) greater will be current consumption.
B) faster PPF will shift outward.
C) faster PPF will shift inward.
D) more bowed out the shape of the PPF will be.

Answer 6

C) faster the PPF curve will bow outward

Question 7

Which of the following is NOT necessary for a firm to engage in price discrimination?

A) The firm must produce output for different buyers at different costs.
B) The firm must sell a product that cannot be resold.
C) The firm must be able to separate buyers by preventing resales from one customer to another.
D) The firm must be able to identify different types of buyers.

Answer 7

A) The firm must produce output for different buyers at different costs.

Question 8

27) Producers’ total revenue will increase if

A) the price rises and demand is inelastic.
B) the price rises and demand is elastic.
C) income increases and the good is a normal good.
D) income falls and the good is an inferior good.

Answer 8

A) the price rises and demand is inelastic.

Question 9

as output increases, marginal cost eventually

Answer 9

increases because of the law of diminishing returns

Question 10

which of the following statements is true for any marginal and average?

Answer 10

when the marginal is greater than the average, the average rises

Question 11

in a perfectly competitive market, if there are no external economies or external diseconomies, and increase in demand:

Answer 11

leaves the price the same in the long run

Question 12

a perfectly competitive firm is producing at the point where its marginal cot equals its marginal revenue. If the firm boosts its output, its total revenue will

Answer 12

rise and its total variable cost will rise even more

Question 13

a key difference between a monopoly and a perfect competitive firm is that the monopolist

Answer 13

has a marginal revenue curve that lies below its demand curve

Question 14

efforts by a firm to obtain a monopoly

Answer 14

are called rent seeking

Question 15

in the case of a perfectly price discriminating monopoly, there is no

Answer 15

deadweight loss

Question 16

The quantity supplied of a good or service is the quantity that a producer ________ at a particular price during a given time period.

Answer 16

is willing to sell

Question 17

The law of demand states that the quantity of a good demanded varies

Answer 17

inversely with price

Question 18

Technological progress makes the production possibilities frontier

Answer 18

shift outward from the origin.

Question 19

The law of demand states that the quantity of a good demanded varies

Answer 19

inversely with its price.

Question 20

It is expected that the price of a bushel of wheat will increase in one month. This belief will result in

Answer 20

a decrease in current supply of wheat.

Question 21

Producers’ total revenue will decrease if

Answer 21

the price rises and demand is elastic.

Question 22

Adam Smith argued that each person in a competitive market is led to promote the

Answer 22

efficient use of society’s resources, even though it is no person’s intention to make society better off.

Question 23

In the above figure, as output increases from 0 units to 10 units to 20 units to 30 units, the deadweight loss

Answer 23

falls at first, then rises

Question 24

the price will rise and the equilibrium quantity might increase, decrease or stay the same when the

Answer 24

demand for a good increases and the supply of it decreases

Question 25

if there exists a shortage in the market for a good then the price of the good will

Answer 25

rise

Question 26

The marginal product of labour is the increase in total product from a

Answer 26

one unit increase in the quantity of labour, while holding the quantity of capital constant.

Question 27

In perfect competition, the elasticity of demand for the product of a single firm is

Answer 27

Infinite because many other firms produce idénticos products

Question 28

As the output increases marginal cost will eventually

Answer 28

Increase because of law of diminishing returns

Question 29

In the short run, a firm will

Answer 29

produce and incur a loss if its total revenue covered its total variable cost but not its total cost.

Question 30

When the demand curve is downward sloping, marginal revenue is

Answer 30

less than price