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5 Written Questions

5 Matching Questions

  1. In which of the following market structures is there clear-cut mutual interdependence with respect to price-output policies?
  2. If the demand for farm products is price inelastic, a good harvest will cause farm revenues to:
  3. The demand for a necessity whose cost is a small portion of one's total income is:
  4. The process by which new firms and new products replace existing dominant firms and products is called:
  5. What do the income effect, the substitution effect, and diminishing marginal utility have in common?
  1. a creative destruction.
  2. b oligopoly
  3. c They all help explain the downsloping demand curve.
  4. d decrease
  5. e relatively price inelastic.

5 Multiple Choice Questions

  1. Josh will only be happy with that salary if his cost of living has not increased.
  2. Goods for which the income elasticity coefficient is relatively high and positive.
  3. diminishing marginal utility.
  4. Alex's behavior is consistent with the endowment effect.
  5. and industry output will be less than the initial price and output.

5 True/False Questions

  1. A supply curve that is a vertical straight line indicates that:a change in price will have no effect on the quantity supplied.


  2. If a firm can sell 3,000 units of product A at $10 per unit and 5,000 at $8, then:the price elasticity of demand is 2.25.


  3. If for a firm P = minimum ATC = MC, then:both allocative efficiency and productive efficiency are being achieved.


  4. The price elasticity of demand coefficient measures:demand is elastic at high prices.


  5. The demand for autos is likely to be:to firms in all types of industries.


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