Market prices are Question 4 options: a) indicators of the relative scarcity of
ID: 1106876 • Letter: M
Question
Market prices are
Question 4 options:
a)
indicators of the relative scarcity of resources and products.
b)
all of these.
c)
conveyors of information.
d)
determined by the interactions of supply and demand in voluntary exchange.
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Question 5 (1 point)
Kim has $24 per week in her entertainment budget. She splits her time between going to the movies and yoga classes. Each movie costs $8 while each yoga class costs $3. The total utility from each of these activities is set out in the table below. What is Kim's total utility maximizing point?
Movies
Total Utility
Yoga Classes
Total Utility
0
0
0
0
1
40
1
30
2
75
2
55
3
105
3
76
4
130
4
92
5
160
5
106
6
114
7
116
8
117
Question 5 options:
a)
3 movies, 0 yoga classes
b)
0 movies, 8 yoga classes
c)
1 movie, 5 yoga classes
d)
2 movies, 2 yoga classes
Question 6 (1 point)
A horizontal demand curve is
Question 6 options:
a)
unit elastic.
b)
perfectly elastic.
c)
perfectly inelastic.
Question 7 (1 point)
The price elasticity of demand is determined primarily by the
Question 7 options:
a)
availability of complementary goods.
b)
size of the consumer surplus.
c)
availability of substitutes for the good.
d)
incomes of consumers.
Question 8 (1 point)
Which demand is most inelastic?
Question 8 options:
a)
cold relief medications
b)
Sony television sets
c)
Pepsi
d)
frozen pizza
Question 9 (1 point)
If a shop near campus increases its prices by 5% and revenues from its sales decrease, the price elasticity of demand for the doughnut shop must be
Question 9 options:
a)
unit elastic.
b)
elastic.
c)
inelastic.
d)
perfectly inelastic.
Question 10 (1 point)
Which is true?
Question 10 options:
a)
The price elasticity of supply will be greater when inputs can be easily used to produce other goods.
b)
The price elasticity of supply will be greater in the short run.
c)
The price elasticity of supply is always negative.
d)
All of these are true.
Question 11 (1 point)
Which would have a greater price elasticity of supply?
Question 11 options:
a)
surgery
b)
glass blowing
c)
legal services
d)
car detailing
Question 12 (1 point)
A 5% decrease in the quantity of good X demanded is caused by a 25% decrease in the price of good M. Which form of elasticity can be calculated with this data?
Question 12 options:
a)
Income elasticity of demand
b)
Cross-price elasticity of demand
c)
Price elasticity of demand
d)
Price elasticity of supply
a)
indicators of the relative scarcity of resources and products.
b)
all of these.
c)
conveyors of information.
d)
determined by the interactions of supply and demand in voluntary exchange.
Explanation / Answer
Q-4 -) The answer is B-) all of these
Because market price is determination of these all these factors . That is it market price is the determined by market supply and demand and consumer information.
Q-5) the answer is A-) 3 movies and 0 yoga classes
Because utility is maximum at where the total utility is maximum and all the budget us exhausted.
Q-6) the answer is C -) perfectly inelastic
Because perfectly inelastic means quantity demanded does not change with change in price. Hennce the demand curve is horizontal indicating the demand remain the same at whatever price.
Q-7) The answer is C-) availability of the substitutes of the good.
Q-8) The answer is A) cold relief medicines
Because cold relief medicing is the necessity good . People consumer it at any price.
Q-9) The answer is B-) Elastic.
Q-10)