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5 Written questions

5 Matching questions

  1. The price elasticity of demand coefficient measures:
  2. Because of "mental accounting:"
  3. If a firm can sell 3,000 units of product A at $10 per unit and 5,000 at $8, then:
  4. For a linear demand curve:
  5. The MR = MC rule applies:
  1. a to firms in all types of industries.
  2. b buyer responsiveness to price changes.
  3. c demand is elastic at high prices.
  4. d the price elasticity of demand is 2.25.
  5. e people isolate purchases and sometimes make irrational decisions.

5 Multiple choice questions

  1. a change in price will have no effect on the quantity supplied.
  2. Josh will only be happy with that salary if his cost of living has not increased.
  3. both allocative efficiency and productive efficiency are being achieved.
  4. oligopoly
  5. They all help explain the downsloping demand curve.

5 True/False questions

  1. The primary force encouraging the entry of new firms into a purely competitive industry is:economic profits earned by firms already in the industry.

          

  2. Alex was willing to pay $50 for the new World Cup soccer ball. When he received it as a gift, he was willing to sell it, but for no less than $80. According to behavioral economists:Alex's behavior is consistent with the endowment effect.

          

  3. If the demand for farm products is price inelastic, a good harvest will cause farm revenues to:less price elastic than the demand for Honda Accords.

          

  4. Allocative efficiency is achieved when the production of a good occurs where:P = MC.

          

  5. The process by which new firms and new products replace existing dominant firms and products is called:buyer responsiveness to price changes.