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5 Written questions

5 Matching questions

  1. The process by which new firms and new products replace existing dominant firms and products is called:
  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:
  3. If for a firm P = minimum ATC = MC, then:
  4. The primary force encouraging the entry of new firms into a purely competitive industry is:
  5. (Last Word) Oil wells and seasonal resorts will often shut down temporarily because:
  1. a creative destruction.
  2. b Alex's behavior is consistent with the endowment effect.
  3. c both allocative efficiency and productive efficiency are being achieved.
  4. d prices for their output temporarily fall below their average variable costs of production.
  5. e economic profits earned by firms already in the industry.

5 Multiple choice questions

  1. people isolate purchases and sometimes make irrational decisions.
  2. demand is elastic at high prices.
  3. the price elasticity of demand is 2.25.
  4. oligopoly
  5. a change in price will have no effect on the quantity supplied.

5 True/False questions

  1. Which type of goods is most adversely affected by recessions?Goods for which the income elasticity coefficient is relatively high and positive.


  2. If the demand for farm products is price inelastic, a good harvest will cause farm revenues to:decrease


  3. Suppose a purely competitive, increasing-cost industry is in long-run equilibrium. Now assume that a decrease in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price:and industry output will be less than the initial price and output.


  4. Anchoringcan influence decision-making with irrelevant information.


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