Economics Semester Exam

In economics, the concept of demand is defined as the desire to own something

• that a manufacturer is capable of producing

• combined with the ability to pay for it

• and a willingness to pay more than other consumers for it

• that has not yet been manufactured or produced

Juanita has noticed that the price of bagels has gone up because of this, she has decided to by a less expensive yogurt every morning for breakfast. This is an an example of the

• market demand schedule

• law of demand

• substitution effect

• income effect

If Tino responds to a sharp increase in his transportation costs by buying fewer clothes, he is demonstrating

• an individual demand schedule

• the substitution effect

• horizontal demand

• income effect

The increasing age of the American population is an example of how

• demand does not always change when prices change

• the law of ceteris paribus works

• changing demographics can cause demand shifts

• lack of substitutes can blunt demand shifts

A change in demand for one good will have what effect on its complement?

• Different effects at different times

• The same effect

• No effect

• The opposite effect

Suppose demand for a product is highly elastic. What will likely happen to a company's total revenue if it raises the price of that product?

• Total revenue will remain the same

• Total revenue will fluctuate

• Total revenue will fall

• Total Revenue will rise

Suppose the price of a good rises, in general, how does the percentage of your budget you spend on that good affect the elasticity of your demand for good overall?

• The lower the percentage of your budget a good represents, the more elastic your overall demand.

• The higher the percentage of your budget a good represents, the more elastic your overall demand.

• The higher the percentage of your budget a good represents, the less elastic your overall demand.

• The lower the percentage of your budget a good represents, the more inelastic your overall demand.

The law of supply declares which of the following?

• Supply stays the same no matter how prices change.

• Supply falls as prices increase

• Supply falls as prices fall.

• Supply increases as price falls.

Which of the following typically happens as prices for a good or services rises?

• More suppliers enter the market

• Supplies leave the market

• Demand becomes increasingly elastic

• Consumers seek more of the good or service to consume

Which of the following would be an example of a fixed cost on a farm?

• Charge for fertilizer for the growing season

• Mortgage on the the land

• Cost of seed

• Fuel to operate machinery