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...
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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