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Economics Chapters 3-5 Homework and Practice Exam TTU Questions and Verified Answers (2024 / 2025) 100% Guarantee Pass $12.99   Add to cart

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Economics Chapters 3-5 Homework and Practice Exam TTU Questions and Verified Answers (2024 / 2025) 100% Guarantee Pass

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Economics Chapters 3-5 Homework and Practice Exam TTU Questions and Verified Answers (2024 / 2025) 100% Guarantee Pass A decrease in both the equilibrium price and the equilibrium quantity of riceis best explained by Answer a decrease in the demand for rice. 2. Suppose we observe a decrease in t...

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Econ Chapters 3-5 Homework and Practice Exam TTU.pdf file:///C:/Users/HP/Desktop/New%20folder%20(4)/Econ%20Chapte




Econ Chapters 3-5 Homework and Practice Exam

TTU Questions & Answers


1. A decrease in both the equilibrium price and the equilibrium quantity of riceis best

explained by

Answer a decrease in the demand for rice.




2. Suppose we observe a decrease in the equilibrium price of tuna and anincrease in

the equilibrium quantity of tuna. This is best explained by

Answer a decrease in the cost of fuel used by tuna fishing boats




3. Refer to the accompanying figure. Assume demand remains unchanged atD1. If supply

shifts from S1 to S2, then the equilibrium price will and

the equilibrium quantity will .

Answer fall; rise



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4. If supply and demand both increase, the new equilibrium price will be

and the new equilibrium quantity will be .

Answer uncertain; higher




5. Refer to the accompanying figure. Assume the market is originally at point

W. Movement to point X is the result of

Answer an increase in demand and an increasein quantity supplied.




6. Suppose rice is a normal good. If consumers' incomes fall, and a new technology is

introduced that lowers the marginal cost of producing rice, thenthe equilibrium

Answer price of rice will fall, but we cannot say for sure what will happento the equilibrium

quantity.




7. Suppose that Tom bought a bike from Helen for $195. If Helen's reservationprice was

$185, andTom's reservation price was $215, the seller's surplus fromthis transaction was

Answer $10




8. If the equilibrium quantity of a good is also the socially optimal quantity,then
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Answer total economic surplus has been maximized.




9. A market equilibrium might not maximize total economic surplus because




Answer sometimes goods entail costs and benefits that do not fall on buyers and sellers.




10. The percentage change in quantity demanded that results from a 1 percent change in

price is known as the

Answer price elasticity of demand




11. When calculating price elasticity of demand, if the percentage changein price is

negative, then the percentage change in quantity demanded is typically

Answer positive.




12. If the price of textbooks increases by one percent and the quantity de- manded falls

by one-half percent, then the price elasticity of demand is equalto

Answer 0.5


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