Unit2 Progress Check MCQ

The table shows the values of different elasticities of demand for good J at the market equilibrium price. Which of the following is true about good J?

• Good J is a normal good.

• Good J's demand is elastic.

• Good J is an inferior good.

• Good J is a complement om consumption to good Y.

• Good J is a substitute in consumption to good Z.

Which of the following would result in the greatest rightward shift of the demand curve for good J?

• A 50% decrease in the price of good J.

• A 20% increase in the price of good X.

• A 10% increase in the price of good Y.

• A 10% increase in the price of good Z.

• A 10% decrease in income.

An increase in the price of good X causes buyers to want to buy more of good Y. Which of the following explains the resulting change in the market?

• The demand curve for good X will shift to the right because the goods are substitutes in consumption.

• The demand curve for good Y will shift to the right because the goods are substitutes in consumption.

• The demand curve for good X will shift to the left because the goods are complements in consumption.

• The demand curve for good Y will shift to the left because the goods are complements in consumption.

• There will be a downward movement along the demand curve for good X because the goods are complements in consumption.

Which of the following correctly describes the income effect associated with the law of demand?

• If consumer income increases, there will be an upward movement along the demand curve for a normal good.

• If consumer income increases, the demand curve will shift to the right for an inferior good.

• If the price of a good increases, the demand for the good decreases because the demand for its substitute in consumption increases.

• If the price of a good decreases, the demand for the good increases because the lower price increases the demand for its complement in consumption.

• If the price of a normal good decreases, the purchasing power of a consumer's income increases and therefore consumers will be willing and able to purchase more of the good.

A change in which of the following will cause a movement along a given demand curve for a normal good?

• Consumer income

• The demand for the good

• The price of the good

• The price of a substitute good in consumption

• The number of buyers

Which of the following will occur as a result of a decrease in the prices of the inputs used to produce a good?

• The quantity supplied would increase at each possible price for the good.

• The price of the good would increase for any given quantity supplied.

• The quantity supplied would increase as the price of the good increased.

• The quantity supplied would increase as the price of the good decreased.

• The price of the good would increase as the quantity supplied decreased.

Which of the following explains why the supply curve is upward sloping?

• At a higher price, consumers are willing to buy more of the good.

• At a lower price, consumers are able to buy more of the good.

• Producers receive subsidies as they increase production.

• At a higher quantity, producers are more able to control the market price.

• At a higher price, producers are willing to sell more to increase their profits.

The market supply curve for a product is derived from the individual firm supply curves by

• multiplying the equilibrium quantity sold by the number of consumers in the market.

• multiplying the equilibrium quantity sold by the number of producers in the market.

• multiplying the quantities each producer sells by the market price.

• summing the quantities each producer sells at each possible price.

• summing the quantities each producer sells and multiplying by the market price.

A 10% increase in the price of a good results in a 4 percent increase in total revenue. From this information, it can be concluded that the demand over this range of prices

• is upward sloping

• is inelastic

• has a price elasticity of demand equal to 2.5

• has increased by 14%

• has increased by 40%

A firm estimates that the absolute value of the price elasticity of demand for its signature sandwich is 2. If the firm increases its sandwich price by 10 percent, what will happen to the quantity demanded?

• It will increase by 5 percent.

• It will increase by 20 percent.

• It will decrease by 5 percent.

• It will decrease by 20 percent.

• It will remain unchanged.