The demand for most farm products is relatively inelastic. All else constant, what is the
effect on farm revenues as a result of the introduction of new and better farm equipment
which increases in productivity?
A) Farm revenues increase.
B) Farm revenues decrease.
C) Farm revenues remain constant because consumers will not increase their
consumption of farm products by much.
D) Farm revenues could increase or decrease depending on the cost of this new
equipment.
Reporters from the Wall Street Journal found that the office supply store Staples
charged different prices for the same product to different online customers based
primarily on
A) the age of the customer.
B) how close the customer’s zip code was to competitors’ stores.
C) the gender of the customer.
D) how many times the customer had looked up the product on its Website.
Why might firms pay wages that are above the equilibrium wage in a market?
A) to increase the productivity of their workers
B) to reduce the unemployment rate
C) to encourage workers to form labor unions
D) to reduce profit
The delivery of first-class mail by the U.S. Postal Service is an example of
A) a monopoly.
B) perfect competition because consumers have access to other methods of written
communication; for example, email and text messaging.
C) monopolistic competition, because mail delivery is a differentiated product provided
by many firms.
D) an oligopoly because a few other firms provide delivery of letters and packages.
Figure 24-3
Suppose the economy is at point C. If investment spending decreases in the economy,
where will the eventual long-run equilibrium be?
A) A
B) B
C) C
D) D
Table 4.7
The equations above describe the demand and supply for Bubba’s Fried Jellybeans. The
equilibrium price and quantity for Bubba’s Fried Jellybeans are $40 and 5 thousand
units. What is the value of consumer surplus?
A) $5 thousand
B) $12.5 thousand
C) $25 thousand
D) $37.5 thousand
Figure 11-2
Short run output is maximized at
A) L1.
B) L2.
C) L3.
D) insufficient information to determine
If a firm shuts down it
A) will suffer a loss equal to its fixed costs.
B) will produce nothing but must pay its variable costs.
C) will produce nothing but must pay its fixed and variable costs.
D) will earn enough revenue to cover its variable costs but not all of its fixed costs.
If an increase in income leads to a decrease in the demand for popcorn, then popcorn is
A) an inferior good.
B) a neutral good.
C) a necessity.
D) a normal good.
Holding everything else constant, a decrease in the price of bicycles will result in
A) a decrease in the quantity of bicycles demanded.
B) an increase in the demand for bicycles.
C) a decrease in the supply of bicycles.
D) an increase in the quantity of bicycles demanded.