Econ002McleodExam 2 Sample 1 with Key

Econ002McleodExam 2 Sample 1 with Key - Econ 002 FORM A...

Info icon This preview shows pages 1–2. Sign up to view the full content.

Econ 002 Test 2 McLeod FORM A 1. If the income elasticity of demand for cereal is -.25 and the income elasticity of demand for peaches is 1.5 then A) cereal and peaches are substitutes. B) cereal and peaches are complements. C) cereal is a normal good and peaches are an inferior good. D) cereal is an inferior good and peaches are a normal good. 2. Suppose you produce tie-dyed t-shirts. You notice that when you charge $10 per shirt, you sell 200 shirts. Also, when you raise the price to $12, you sell 150 shirts. As the price goes up from $10 to $12, your total revenue __________, therefore the demand for tie-dyed t-shirts must be 3. Suppose a firm doubles all of its inputs and this results in the firm tripling its output. The firm is experiencing 4. If the price elasticity of demand for a good is -1.5, then a 5% decrease in the price of the good will cause a 5. If demand for a good is perfectly inelastic, then the demand curve will be A) a horizontal line. B) a vertical line. C) a straight line with a constant negative slope. D) flatter and flatter as the price of the good falls.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern