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Could you please help me with these questions its a study guide for me but I do not have the answers to make sure im right or wrong. Please do help
1. In the economic sense, the cost of something used in production is
a. the benefit foregone by not using it in its best alternative use.
b. the explicit cost, the same as accountant’s cost
c. the payment actually made to the factor of production
d. the same as the tax authorities’ definition
e. fixed cost and variable cost.
2. Suppose that the price of a substitute for a particular good falls and the prices of the raw materials used to manufacture the good
increase. What would you expect to occur in the market for this good?
a. The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
b. The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
c. Both equilibrium price and equilibrium quantity would increase.
d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
e. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
3. Which one of the following would not shift the supply curve for good X to the right?
a. A decrease in the price of Y, a substitute for the production of X.
b. A reduction in the price of resources used in producing X.
c. An improvement in technology affecting the production of X.
d. An increase in the price of X.
e. An increase in the price of Y, a complement in the production of X.
4. If the price elasticity of demand is -0.5, then a 30% price hike will lead to a
a. 5% drop in quantity demanded.
b. 15% drop in quantity demanded.
c. 20% drop in quantity demanded.
d. 40% drop in quantity demanded.
e. 50% drop in quantity demanded.
5. Tina and Brian work for the same recording company. Tina claims they would increase their total revenue by increasing the
price of their CDs while Brian claims they would be better off by decreasing the price. We can conclude that
a. Tina thinks the demand for CDs has price elasticity of zero and Brian thinks price elasticity equals 1.
b. Tina thinks the demand for CDs has price elasticity equal to 1 and Brian thinks price elasticity equals zero.
c. Tina thinks the demand for CDs is price elastic and Brian thinks it is price inelastic.
d. Tina thinks the demand for CDs is price inelastic and Brian thinks it is price elastic.
e. Tina and Brian should find another job and forget about economics.
6. Joe is a tax accountant. He receives $100 per hour doing tax returns. He can type 20 pages per hour. He can hire an assistant
who types 10 pages per hour. Which of the following statements is true?
a. Joe should not hire an assistant because the assistant cannot type as fast as he.
b. Joe should hire the assistant as long as he pays the assistant less than $100 per hour.
c. Joe should hire the assistant as long as he pays the assistant less than $75 per hour.
d. Joe should hire the assistant as long as he pays the assistant less than $50 per hour.
e. None of the above.
7. Which of the following statements best differentiates price ceilings and price floors?
a. Price ceilings represent minimum prices, while price floors represent maximum prices
b. Price ceilings are always set below the equilibrium price and price floors are always set above the equilibrium price.
c. Price ceilings are maximum allowable prices, whereas price floors are minimum allowable prices.
d. Price floors cause shortages to appear, whereas price ceilings have the opposite effect.
e. None of the above.
8. At any single output, the height of the demand curve measures
a. the consumer surplus enjoyed from consuming that unit.
b. the difference between the buyers' willingness to pay for that unit and the market price.
c. the profit earned by the seller from the sale of that unit.
d. the value buyers place on that unit of the good.
e. the income elasticity of demand.
1. In the economic sense, the cost of something used in production is
a. the benefit foregone by not using it in its best alternative use.
b. the explicit cost, the same as accountant’s cost
c. the payment actually made to the factor of production
d. the same as the tax authorities’ definition
e. fixed cost and variable cost.
2. Suppose that the price of a substitute for a particular good falls and the prices of the raw materials used to manufacture the good
increase. What would you expect to occur in the market for this good?
a. The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
b. The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
c. Both equilibrium price and equilibrium quantity would increase.
d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
e. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
3. Which one of the following would not shift the supply curve for good X to the right?
a. A decrease in the price of Y, a substitute for the production of X.
b. A reduction in the price of resources used in producing X.
c. An improvement in technology affecting the production of X.
d. An increase in the price of X.
e. An increase in the price of Y, a complement in the production of X.
4. If the price elasticity of demand is -0.5, then a 30% price hike will lead to a
a. 5% drop in quantity demanded.
b. 15% drop in quantity demanded.
c. 20% drop in quantity demanded.
d. 40% drop in quantity demanded.
e. 50% drop in quantity demanded.
5. Tina and Brian work for the same recording company. Tina claims they would increase their total revenue by increasing the
price of their CDs while Brian claims they would be better off by decreasing the price. We can conclude that
a. Tina thinks the demand for CDs has price elasticity of zero and Brian thinks price elasticity equals 1.
b. Tina thinks the demand for CDs has price elasticity equal to 1 and Brian thinks price elasticity equals zero.
c. Tina thinks the demand for CDs is price elastic and Brian thinks it is price inelastic.
d. Tina thinks the demand for CDs is price inelastic and Brian thinks it is price elastic.
e. Tina and Brian should find another job and forget about economics.
6. Joe is a tax accountant. He receives $100 per hour doing tax returns. He can type 20 pages per hour. He can hire an assistant
who types 10 pages per hour. Which of the following statements is true?
a. Joe should not hire an assistant because the assistant cannot type as fast as he.
b. Joe should hire the assistant as long as he pays the assistant less than $100 per hour.
c. Joe should hire the assistant as long as he pays the assistant less than $75 per hour.
d. Joe should hire the assistant as long as he pays the assistant less than $50 per hour.
e. None of the above.
7. Which of the following statements best differentiates price ceilings and price floors?
a. Price ceilings represent minimum prices, while price floors represent maximum prices
b. Price ceilings are always set below the equilibrium price and price floors are always set above the equilibrium price.
c. Price ceilings are maximum allowable prices, whereas price floors are minimum allowable prices.
d. Price floors cause shortages to appear, whereas price ceilings have the opposite effect.
e. None of the above.
8. At any single output, the height of the demand curve measures
a. the consumer surplus enjoyed from consuming that unit.
b. the difference between the buyers' willingness to pay for that unit and the market price.
c. the profit earned by the seller from the sale of that unit.
d. the value buyers place on that unit of the good.
e. the income elasticity of demand.