Pre Mid Term Test

The opportunity cost of a decision is measured in terms of

• the price of the alternative we choose.

• the next best thing given up.

• the price of a new opportunity that arises.

• sunk cost.

If Lisa studies economics for two hours instead of going to the movies with her friends, then

• the opportunity cost of studying is the missed movie.

• Lisa definitely is making a rational choice.

• Lisa is ignoring a sunk cost.

• Lisa is not responding to any incentives.

Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then

• the demand for hot dogs will increase.

• the quantity demanded of hotdogs will decrease.

• the demand for hot dog buns will decrease.

• the demand for hot dog buns will increase.

A change in the price of apples leads to a ________ the demand curve for apples because ________.

• movement along: all other factors influencing buying plans are held constant

• movement along; all other factors influencing demand are allowed to change

• shift in; all other factors influencing demand are held constant

• shift in; changes in the prices of other fruit affect demand

The price of cotton clothing falls. As a result

• the quantity demanded of cotton clothing decreases.

• the demand for cotton clothing increases.

• the demand for cotton clothing decreases.

• the quantity demanded of cotton clothing increases.

Calculate the Price elasticity of demand of X when its price move from $3.00 to $2.50, quantity demanded increases from 1,000 to 1,150

• 0.07.

• 0.77

• 1.30.

• 3.00.

A surplus of cardboard boxes means that

• the quantity demanded exceeds the quantity supplied.

• the quantity demanded is less than the quantity supplied.

• the current price of a cardboard box is less than the equilibrium price.

• the quantity demanded equals the quantity supplied

Consider the market for wheat. If there is an improvement in harvesting technology

• the demand curve for wheat shifts rightward.

• there is a movement up along the demand curve.

• the supply curve for wheat shifts rightward.

• the equilibrium price rises.

A budget line shows the

• quantities of goods a buyer can purchase with given income and prices.

• relationship between price and quantity demanded.

•  total utility a consumer realizes from consuming

• quantities of consumption that maximizes marginal utility.

When demand increases

• consumers are willing to buy more at any price.

• consumers buy more of the good only if its price falls.

• the price is lower at any level of quantity demanded.

• consumers buy more of the good only if its price rises.