ECONOMICS EXAM, ECON 414 FINAL CHAPTER
14, FIN 321 MIDTERM 2, MACRO FINAL EXAM,
ECON CHAPTER 14 & 16, MANECON - CHAPTER
14 QUIZ, QUIZ 4, ECON TEST 3, MANAGERIAL
ECONOMICS CHAPTER 12 TEST BANK
Unlike an accountant, an economist measures costs on a (n) ________ basis. CORRECT ANSWER replacement
There is no change in total revenue when the demand curve for a good is: CORRECT ANSWER Unitary elastic.
When the price of a good in a market is above equilibrium: CORRECT ANSWER The quantity supplied exceeds the quantity demanded.
A surplus is observed.
The price will fall in the near future.
ALL OF THE ABOVE
When a firm raises the price of its product, what happens to total revenue? CORRECT ANSWER If demand is elastic, total revenue decreases
Which of the following would NOT describe an aspect of long-run adjustment to rising gasoline prices? CORRECT ANSWER Consumers make no changes in their current driving habits.
Gasoline and sports utility vehicles (SUVs) are complementary goods. One would expect, therefore, that the recent increase in the price of gasoline would cause CORRECT ANSWER The demand for SUVs to fall and the equilibrium quantity to fall
Which of the following best describes 'Market Value Added'? CORRECT ANSWER The difference between the market value of the firm and the amount of contributed capital.
If sellers try to charge a price which is above the equilibrium level, then it can be predicted that: CORRECT ANSWER Surplus conditions will result and forces will be set in motion to cause prices to fall. Several firms spent millions of dollars advertising their goods and services at the recent Super Bowl. One of the reasons they did so was that they were attempting to: CORRECT ANSWER shift the demand for the product to the right.
Which of the following statements is true? CORRECT ANSWER An increase in demand
causes equilibrium price and quantity to rise.
A decrease in demand causes equilibrium price and quantity to fall.
An increase in supply causes equilibrium price to fall and quantity to rise.
A decrease in supply causes equilibrium price to rise and quantity to fall.
ALL OF THE ABOVE
Which of the following statements highlight the distinction between microeconomics and
macroeconomics? CORRECT ANSWER microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.
If the cross price elasticity between a Subway Veggie Delite and Jimmy John's Veggie sandwich is 4.0, a 10% increase in the price of Subway sandwich will lead to a: CORRECT ANSWER 40% increase in the demand of Jimmy John's sandwiches
Assume Coca-Cola and Pepsi-Cola are substitutes. A rise in the price of Coca-Cola will have which of the following effects on the market for Pepsi? CORRECT ANSWER A rightward shift in the Pepsi demand curve.
Which of the following examples best illustrates the concept of derived demand? CORRECT ANSWER The higher the demand for automobiles, the greater the demand for steel.
Speed in communications and the growth of internet has caused transaction costs to: CORRECT ANSWER decrease significantly
Which of the following would represent a microeconomics decision or process? CORRECT ANSWER Using forecasted interest rates to determine the appropriate time to finance a new plant.
Weather conditions have been exceptionally good for growing strawberries this year and a bumper crop is anticipated. As a result, one would expect CORRECT ANSWER The supply to be higher than normal, and the market price to be lower
Suppose there is a shortage of food in the market. In the long-run, the guiding (allocation) function of price can be expected to cause CORRECT ANSWER an increasing shift in the supply of food. If the coefficient of price elasticity for a given product is -2.5, then it can be said that CORRECT ANSWER Demand will increase if price rises
A lower price will be accompanied by lower total expenditures on the product
A one percent change in the products price will tend to be accompanied by a 2.5 percent change in quantity demanded in the same direction of the price change
Demand is inelastic
NONE OF THESE
Which of the following best describes the difference between a change in quantity demanded and change in demand? CORRECT ANSWER A change in quantity demanded occurs when the price of the good has changed; a change in demand occurs
when a non-price determinant of demand for the good has changed.
A firm earns a normal profit when its total revenues just offset both the ________ cost and ________ cost. CORRECT ANSWER accounting; opportunity
As you move down along a demand curve, CORRECT ANSWER demand becomes less elastic
If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls from 10,000 slices to 7,400 slices, using the formula for arc price elasticity what is the price elasticity of demand ? CORRECT ANSWER - 1.64
If the demand curve for a good always has unitary price elasticity, what does this imply about consumer behavior? CORRECT ANSWER Consumers will spend a constant total
amount on the good.
A price-ceiling can be defined as: CORRECT ANSWER a legal maximum price established by the government for a specific market.
Which of the following best describes entrepreneurial ability? CORRECT ANSWER The
ability to manage scarce resources, find new methods to achieve objectives, and be willing and able to assume the risk associated with achievement.
Suppose that the Vice President for Marketing of Aetna Pharmaceuticals argues that a 10 percent increase in the price of insulin (used by diabetic patients) will raise total revenues. It can be inferred that the Vice President of Marketing thinks that demand for insulin is: CORRECT ANSWER Inelastic.
When we are making choices, we do because of: CORRECT ANSWER unlimited wants
and limited resources. An inferior good has a ________ income elasticity of demand and demand for the good ________ as income rises. CORRECT ANSWER negative; decreases
Typically, we can expect that the: CORRECT ANSWER Elasticities for individual brands
are likely to be higher than for the entire product category.
Which of the following best describes the conditions necessary for a market to attain equilibrium? CORRECT ANSWER All of the above accurately describe the conditions necessary for a market to attain equilibrium.
Suppose President Trump threatens that all imports of Mexican built cars will be subjected to a border tax (tariff) in the future. As a result of this announcement, we can expect that the current demand for these cars to: CORRECT ANSWER increase, which is a shift to the right of the demand curve.
If a product has several possible substitutes, we would expect the demand curve to be CORRECT ANSWER Relatively elastic
Yesterday Seller A supplied 400 units of a good X at $10 per unit. Today Seller A supplied the same quantity of units at $5 per unit. Based on this evidence, Seller A has experienced a (an): CORRECT ANSWER Increase in supply.
In order to confirm that Apple and Samsung are indeed competitors, the Federal Trade Commission should test the ____ and should get a ____. CORRECT ANSWER cross-
price elasticity; positive number
Management can be best described as: CORRECT ANSWER How firms organize and allocate a firms resources to achieve the firm's objectives
Which of the following best describes modern corporations in the U.S.? CORRECT ANSWER Large publicly held firms in which the management of the firm is typically the dominate proportion of its owners.
Managerial economics can best be described as: CORRECT ANSWER How firm managers use economic analysis to make business decisions and solve problems to best use the firms resources.
When there are variation in a firm's returns over the business cycle, the firm is facing _______ risk. CORRECT ANSWER Business
Which of the following best describes the opportunity cost of a year of college? CORRECT ANSWER The dollar value of tuition, books, all associated explicit expenses, the interest that may have been earned on that sum, and any foregone income from not working over that period
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