Question # 1 of 15 ( Start time: 02:02:54 PM ) Total Marks: 1
You observe that the price of houses and the number of houses purchased both rise over the course of the year. You conclude that:
Select correct option:
The demand for houses has increased
The demand curve for houses must be upward-sloping
The supply of houses has increased
Housing construction costs must be decreasing
Question # 2 of 15 ( Start time: 02:04:10 PM ) Total Marks: 1
If consumer incomes increase, the demand for product Y:
Select correct option:
Will necessarily remain unchanged
Will shift to the right if Y is a complementary good
Will shift to the right if Y is a normal good
Will shift to the right if Y is an inferior good
Question # 3 of 15 ( Start time: 02:04:54 PM ) Total Marks: 1
If marginal product is below average product:
Select correct option:
The total product will fall
The average product will fall
Average variable costs will fall
Total revenue will fall
Reference: The marginal product is the extra output per factor (e.g. employee); the average product is the output per factor (e.g. per employee). If marginal product is below average product, the average product will fall.
Question # 4 of 15 ( Start time: 02:05:58 PM ) Total Marks: 1
It is calculated as the percentage change in quantity demanded of a given good, with respect to the percentage change in the price of "another" good.
Select correct option:
Price elasticity of demand
Income elasticity of demand
Cross price elasticity of demand
Supply price elasticity
Question # 5 of 15 ( Start time: 02:06:46 PM ) Total Marks: 1
A Demand Curve is price inelastic when:
Select correct option:
Changes in demand are proportionately smaller than those in price
Changes in demand are proportionately greater than those in price
Changes in demand are equal than those in price
None of the given options.
Question # 6 of 15 ( Start time: 02:07:32 PM ) Total Marks: 1
A partial explanation for the inverse relationship between price and quantity demanded is that a:
Select correct option:
Lower price shifts the supply curve to the left
Higher price shifts the demand curve to the left
Lower price shifts the demand curve to the right
Higher price reduces the real incomes of buyers
Feedback: The demand curve is the relationship between price and quantity demanded, all else equal. A change in price changes quantity demanded, but does not shift the demand curve. One explanation for the inverse relationship between price and quantity demanded along the curve is that a higher price reduces the real incomes of buyers. For normal goods, this drop in real income will reduce desired purchases. modest_khan: 4
Question # 7 of 15 ( Start time: 02:08:36 PM ) Total Marks: 1
If a sales tax on beer leads to reduced tax revenue, this means:
Select correct option:
Elasticity of demand is < 1.
Elasticity of demand is > 1.
Demand is upward-sloping.
Demand is perfectly inelastic.
Q uestion # 8 of 15 ( Start time: 02:09:37 PM ) Total Marks: 1
A "Giffen good" is defined as one for which:
Select correct option:
Marginal utility is zero.
The demand curve is perfectly elastic.
The substitution effect is positive.
The demand curve is positively sloped.
Question # 9 of 15 ( Start time: 02:11:09 PM ) Total Marks: 1
A nation's production possibilities curve is "bowed out" from the origin because:
Select correct option:
Resources are not perfectly shiftable between productions of the two goods
Capital goods and consumer goods utilize the same production technology
Resources are scarce relative to human wants
Opportunity costs are decreasing
Question # 10 of 15 ( Start time: 02:11:37 PM ) Total Marks: 1
If diminishing marginal utility holds, and a person consumes less of a good, then all else being equal:
Select correct option:
The price of the good will rise.
Marginal utility will rise
Expenditure on the good will increase
Marginal utility will decline
Question # 11 of 15 ( Start time: 02:12:15 PM ) Total Marks: 1
According the law of diminishing returns:
Select correct option:
The marginal product falls as more units of a variable factor are added to a fixed factor.
Marginal utility falls as more units of a product are consumed.
The total product falls as more units of a variable factor are added to a fixed factor.
The marginal product increases as more units of a variable factor are added to a fixed factor.
This occurs when variable factors are added to fixed factors. According to the law of diminishing returns the marginal product falls as more units of a variable factor are added to a fixed factor.
Question # 12 of 15 ( Start time: 02:13:34 PM ) Total Marks: 1
If consumer incomes increase, the demand for product Y:
Select correct option:
Will necessarily remain unchanged
Will shift to the right if Y is a complementary good
Will shift to the right if Y is a normal good
Will shift to the right if Y is an inferior good
Question # 13 of 15 ( Start time: 02:14:13 PM ) Total Marks: 1
The concept of a risk premium applies to a person that is:
Select correct option:
Risk averse
Risk neutral
Risk loving
All of the given options
Question # 14 of 15 ( Start time: 02:14:35 PM ) Total Marks: 1
When drawing demand and supply curves, economists are assuming that the primary influence on production and purchasing decisions is:
Select correct option:
Price
Cost of production
The overall state of the economy
Consumer incomes
Reference: Although there are many determinants of quantity demanded and quantity supplied, the demand and supply curves show the relationship between price and quantity, all other factors equal. The primary factor is assumed to be the price.
Question # 15 of 15 ( Start time: 02:15:36 PM ) Total Marks: 1
Assume that the government sets a ceiling on the interest rate that banks charge on loans. If the ceiling is set below the market equilibrium interest rate, the result will be:
Select correct option:
A surplus of credit.
A shortage of credit.
Greater profits for banks issuing credit.
A perfectly inelastic supply of credit in the market place.
