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ECO 561 - ECO 561 UOP Final Exam University of Phoenix...

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ECO 561 UOP Final Exam University of Phoenix Eco561 Eco/561 Final Examination Exam multiple choice quiz 1) Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a result, the total revenue received by peanut farmers changes from $16 to $14 billion. Thus: A. the demand curve for peanuts has shifted to the right. B. the demand for peanuts is elastic. C. the demand for peanuts is inelastic. D. no inference can be made as to the elasticity of demand for peanuts. 2) The advent of DVDs has virtually demolished the market for videocassettes. This is an example of: 3) If the demand for farm products is price inelastic, a good harvest will cause farm revenues to: 4) Suppose that in the clothing market, production costs have fallen, but the equilibrium price and quantity purchased have both increased. Based on this information we can conclude that: 5) Suppose that in 2007 Ford sold 500,000 Mustangs at an average price of $18,800 per car; in 2008, 600,000 Mustangs were sold at an average price of $19,500 per car. These statements: A. suggest that the demand for Mustangs increased between 2007 and 2008. B. constitute an exception to the law of demand in that they suggest an upsloping demand curve. C. suggest that the demand for Mustangs decreased between 2007 and 2008. D. suggest that the supply of Mustangs must have increased between 2007 and 2008. 6) Which of the following statements is true about productive and allocative efficiency?
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simultaneously. occur without the other.
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