ECON 102 Final

ECON 102 Final - Practice final s08 Multiple Choice...

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Practice final s08 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. When the price of a good or service changes, a. the supply curve shifts in the opposite direction. b. the demand curve shifts in the opposite direction. c. the demand curve shifts in the same direction. d. there is a movement along a given demand curve. ____ 2. Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 an hour it is likely that the a. demand for bicycle assembly workers will increase. b. supply of bicycles will shift to the right. c. supply of bicycles will shift to the left. d. firm must increase output to maintain profit levels. ____ 3. An increase in the price of oranges would lead to a. an increased supply of oranges. b. a reduction in the prices of inputs used in orange production. c. an increased demand for oranges. d. a movement up and to the right along the supply curve for oranges. ____ 4. New cars are normal goods. What will happen to the equilibrium price of new cars if the price of gasoline rises, the price of steel falls, public transportation becomes cheaper and more comfortable, auto-workers accept lower wages and automobile insurance becomes more expensive? a. Price will rise. b. Price will fall. c. Price will stay exactly the same. d. The price change will be ambiguous. ____ 5. Which of the following events would definitely result in a higher price in the market for Snickers? a. Demand for Snickers increases and supply of Snickers decreases. b. Demand for Snickers and supply of Snickers both decrease. c. Demand for Snickers decreases and supply of Snickers increases. d. Demand for Snickers and supply of Snickers both increase ____ 6. Other things equal, the demand for a good tends to be more inelastic, the a. fewer the available substitutes. b. longer the time period considered. c. more the good is considered a luxury good. d. more narrowly defined is the market for the good. ____ 7. The flatter the demand curve through a given point, the a. greater the price elasticity of demand at that point. b. smaller the price elasticity of demand at that point. c. closer the price elasticity of demand will be to the slope of the curve. d. greater the absolute value of the change in total revenue when there is a movement from that point upward and to the left along the demand curve. Figure 5-4
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____ 8. Refer to Figure 5-4 . As price falls from P A to P B , we could use the three demand curves to calculate three different values of the price elasticity of demand. Which of the three demand curves would produce the smallest elasticity? a.
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ECON 102 Final - Practice final s08 Multiple Choice...

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