31. If an increase in the price of a good leads to an increase in total revenue, then _____. (Points: 3)
the supply curve must be price inelastic
the demand curve must be price inelastic I CHOSE THIS ONE
the supply curve is price elastic
none of the above is correct
32. If a university decreases the price of tickets to football games to collect more revenue, it is assuming that the demand for tickets is ______. (Points: 3)
unstable
price inelastic
price elastic I CHOSE THIS ONE
unit-price elastic
33. Along the upper end of a linear demand curve, the price elasticity of demand will be _____. (Points: 3)
price inelastic
price elastic I CHOSE THIS ONE
unit-price elastic
positive
34. To say that two goods are substitutes, their cross-price elasticities of demand should be _____. (Points: 3)
less than zero
negative, yet almost equal to zero
equal to zero
greater than zero I CHOSE THIS ONE
35. To say that two goods are complements, their cross-price elasticities of demand should be _____. (Points: 3)
less than zero I CHOSE THIS ONE
equal to zero
positive, yet almost equal to zero
greater than zero
36. If the price elasticity of supply is less than 1, then supply is _____. (Points: 3)
price elastic I CHOSE THIS ONE
price inelastic
unit-price elastic
very responsive to price changes
37. Along a given demand curve, a decrease in the price of a good _____. (Points: 3)
will increase consumer surplus I CHOSE THIS ONE
will decrease consumer surplus
will have no effect on consumer surplus
It's impossible to tell what will happen to consumer surplus.
38. If the price of a good rises, then producer surplus ______. (Points: 3)
will increase I CHOSE THIS ONE
will decrease
will remain the same
may change but we can't tell how
39. If there is an increase in demand, total surplus ______. (Points: 3)
will increase I CHOSE THIS ONE
will decrease
will remain the same
may change but we can't tell how
40. If total surplus rises, which of the following must have occurred? (Points: 3)
There was an increase in demand and a decrease in supply.
There was an increase in demand and an increase in supply. I CHOSE THIS ONE
There was a decrease in demand and a decrease in supply.
There was a decrease in demand and an increase in supply.
41. If the government imposes a price floor in the market for grapefruit, total surplus _____. (Points: 3)
will increase
will decrease
will not change
may change but we cannot determine the change without more information I PICKED THIS ONE
42. If the government removed the excise tax on gasoline, which of the following would not occur? (Points: 3)
Consumer surplus would increase.
Producer surplus would increase.
Producer surplus would decrease.
Total surplus would increase. I PICKED THIS ONE
43. The short run is defined as a ______. (Points: 3)
period of time less than 1 year
period of time less than 6 months
planning period in which some inputs are considered to be fixed in quantity I PICKED THIS ONE
time period in which some inputs are fixed, but it cannot exceed 1 year
44. A input whose quantity can be changed during a particular period is a _____. (Points: 3)
marginal input
fixed input
incremental input
variable input I PICKED THIS ONE
45. A fixed input is one ______. (Points: 3)
that exists in nature and there is only so much of it
that can be used for one thing only
that can never produce more or less in any time period I PICKED THIS ONE
whose quantity cannot be changed in a particular period
46. A total product curve indicates the relationship between ______. (Points: 3)
variable input and price
variable input and variable cost
variable input and output I PICKED THIS ONE
output and price
47. When an additional unit of a variable input adds less to total product than the previous unit, the firm must be experiencing ______. (Points: 3)
increasing returns NOT SURE OF ANY OF THESE
diminishing marginal returns
diminishing average returns
both B and C
48. The curve that shows the additional cost of each additional unit of output is called the _____. (Points: 3)
average cost curve
total cost curve
marginal product curve
marginal cost curve I PICKED THIS ONE
49. The long-run average cost curve is tangent to an infinite number of ______. (Points: 3)
total cost curves NOT SURE OF ANY OF THESE
marginal cost curves
average variable cost curves
average total cost curves
50. When diseconomies of scale outweigh economies of scale, the ______. (Points: 3)
long-run average cost curve rises
marginal cost curve declines NOT SURE OF ANY OF THESE
average total cost curve declines
average variable cost curve declines
Generally well done.
I agree with most of your answers, disagree with some, and some I'm not to sure about.
31-35 I agree
36) elasticity of supply is (%change in Qs) / (%change in P). If this is less than 1, supply is inelastic.
37-40 I agree. (I presume that total surplus is the sum of consumer and producer surplus).
41) I disagree. Draw a diagram of supply and demand and a binding price floor (price is set above equilibrium price). Final Q will occur where the fixed price hits demand, and will be a shortage. Look at the new area of producer and consumer surplus. It should be entirely contained in the old area -- total surplus declines.
42 I agree
43) I don't believe there is a general agreement on the definition of "short run". I personally agree with your answer.
44) I personally don't see a big distinction between "marginal", "incremental", or "variable" I would probably go with "variable" myself.
45) I disagree. A fixed input is one whose quantity cannot be changed in a particular period.
46) In general, I agree with your answer. However, I have seen, in textbooks, total product curves for competitive industries, as a relationship between total product and price.
47) If adding an input leads to an increase in total output but a smaller increase than the previous input (and a larger increase than the next input), the firm must be experiencing diminishing returns.
48) I agree
49) tangent to and infinite number of SHORT run average cost (or short run average variable cost curves)
50) when diseconomies of scale occur, long run average cost curves rise.
1247
31. the demand curve must be price inelastic
32. price elastic
33. price elastic
34. greater than zero
35. less than zero
36. price elastic
37. will increase consumer surplus
38. will increase
39. will increase
40. There was an increase in demand and an increase in supply.
41. may change but we cannot determine the change without more information
42. Producer surplus would decrease.
43. planning period in which some inputs are considered to be fixed in quantity
44. variable input
45. whose quantity cannot be changed in a particular period
46. variable input and output
47. diminishing marginal returns
48. marginal cost curve
49. average total cost curves
50. long-run average cost curve rises