If demand is unit elastic, revenue
a. and price rise and fall together.
b. rises as price falls.
c. falls as price rises.
d. remains constant as price rises or falls.
The price of one good produced by a multiproduct industry rises. For another good
produced by that industry
a. the supply curve will shift to the left.
b. the supply curve will remain constant.
c. the supply curve will shift to the right.
d. the demand curve will shift to the right.
The increase in world oil prices during the 1970s was
a. the result of depletion of world reserves of oil.
b. artificially created by OPEC.
c. the result of extremely high growth rates in industrialized countries.
d. fully reversed by 1982.
Assume that a company has several male workers who do not give their full
cooperation to female supervisors making them less effective as supervisors.
Economists would refer to this type of situation as ____.
a. statistical discrimination
b. discrimination by fellow workers
c. discrimination by employers
d. non-discrimination
Elasticity
a. deals with percentage changes in price and quantity demanded.
b. employs percentage changes calculated in terms of average values of the prices and
quantities at issue.
c. is generally stated in absolute value.
d. All of the above are correct.
Define the following terms and explain their importance to the study of economics.
a. monopolistic competition
b. oligopoly
c. cartel
d. oligopolistic interdependence
When there is an increase in demand,
a. the demand curve shifts toward the origin of the graph.
b. the demand curve twists clockwise.
c. the demand curve shifts away from the origin of the graph.
d. the demand curve twists counterclockwise.
e. a lower price has increased the amount of the good that consumers will buy.
Ex-London School of Economics student Mick Jagger sang, “You can’t always get what
you want, but if you try sometime, you just might find you can get what you need.”
Another statement of the basic economic principle expressed in this lyric is that
a. rational decisions are not always possible.
b. you can allocate your resources to what gives you the highest value.
c. you can create the supply to meet your own demand.
d. you can maximize social welfare by making optimal decisions.
Generally, the opportunity cost and the money cost of a good
a. are identical only if the good sells in a free market.
b. are different.
c. matter only to the purchaser of the good.
d. are not reflected in its price.
Price controls are usually enacted in response to
a. popular opinion.
b. governmental studies.
c. scholarly research on the effects of high prices.
d. laws enacted in other countries.
e. All of the above are correct.
What most frightens investors in the stock market is:
a. the possibility of losing their investments
b. the possibility of gaining too much from their investments, and the resultant tax
consequences
c. the possibility that the prices of many investments may collapse simultaneously
d. the possibility that a company that they have invested in will go bankrupt
If a product constitutes a large portion of a consumer’s income, demand will be more
inelastic.
a. True
b. False
The law of demand ensures that a demand curve has a positive slope.
a. True
b. False
The “greenhouse effect” is predicted to
a. lead to the next ice age.
b. raise global temperature.
c. pollute the oceans.
d. break the edifice complex by the turn of the century.
Figure 21-1
In Figure 21-1, the optimal amount of equality lies only between which points?
a. A and B
b. C and D
c. D and E
d. B and E
Speculators make their profits on
a. price differences in different time periods.
b. price increases from inflation.
c. avoiding double taxation of income.
d. the difference in interest rates on stocks and bonds.
Japanese employers tend to hire employees right out of college and train them for a
lifetime job with the company. Over time they found that women often, but not always,
married after a few years and left the company so they were not good training
investments. Based on this experience, and despite the exceptions, firms stopped hiring
any women for jobs that require substantial training. This practice is called
a. economic discrimination.
b. statistical discrimination.
c. compensating differentials.
d. the substitution effect.