Econ Review Part 3

18 Questions | By Laurenmlbc | Updated: Mar 21, 2022 | Attempts: 801

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1.

If the price of a hotel room increases from $70 to $85 and the number of rooms booked decreases from 200 to 150, what would the price elasticity of demand equal? (absolute value)
- A.
  
  0.68
- B.
  
  0.91
- C.
  
  1.10
- D.
  
  1.48
- E.
  
  None of the above
2.

If QuikTrip decreases the price of 32 ounce soft drinks in the summer from $0.79 to $0.39 and the number purchased increases from 230 to 770, what would the price elasticity of demand equal? (absolute value)
- A.
  
  0.64
- B.
  
  0.77
- C.
  
  0.93
- D.
  
  1.59
- E.
  
  None of the above
3.

For which of the following goods would demand be most inelastic with respect to price?
- A.
  
  Soft drink at a gas station
- B.
  
  Soft drink at a movie theater
- C.
  
  Soft drink at a mall
- D.
  
  Soft drink on a college campus
- E.
  
  Soft drink at a grocery store
4.

For which of the following goods would demand be most inelastic with respect to price?
- A.
  
  A chair from Rooms to Go
- B.
  
  An antique Queen Anne chair
- C.
  
  A UGA lawn chair
- D.
  
  Lazy chair recliner
5.

For which of the following goods would demand be most elastic with respect to price?
- A.
  
  A hot dog and soft drink at an NFL stadium
- B.
  
  Heart surgery
- C.
  
  A gallon of gasoline
- D.
  
  Eddie Bauer jeans
- E.
  
  None of the Above
6.

Price elasticity of demand with an absolute value of 2.5 would indicate
- A.
  
  Perfectly inelastic demand
- B.
  
  Relatively inelastic demand
- C.
  
  Demand of unitary elasticity
- D.
  
  Relatively elastic demand
- E.
  
  Perfectly elastic demand
7.

Price elasticity of demand with an absolute value of zero would indicate
- A.
  
  Perfectly inelastic demand
- B.
  
  Relatively inelastic demand
- C.
  
  Demand of unitary elasticity
- D.
  
  Relatively elastic demand
8.

If the demand for a good is inelastic and a producer raises his/her price, the result will be an increase in total revenue.
- A.
  
  True
- B.
  
  False
9.

If the demand for a good is elastic and a producer lowers his/her price, the result will be an increase in total revenue.
- A.
  
  True
- B.
  
  False
10.

If the demand for a good is elastic and a producer lowers his/her price, the result will be an increase in total revenue.
- A.
  
  True
- B.
  
  False
11.

If the price elasticity of demand equals -2.5 and a producer raises his/her price, the result will be an increase in total revenue.
- A.
  
  True
- B.
  
  False
12.

If a specific movie theatre increases prices by $1.00 and demand for is unitary with respect to price what will happen to total revenue?
- A.
  
  Increase
- B.
  
  Decrease
- C.
  
  no change
13.

If a decrease in price leads to an increase in total revenue, the demand must be elastic.
- A.
  
  True
- B.
  
  False
14.

The Laffer curve (at least in the short run) depicts an inverse relationship between inflation and unemployment.
- A.
  
  True
- B.
  
  False
15.

Which of the following is a correct indication of the labels on the axis for the Phillips curve?
- A.
  
  Inflation is on the vertical axis and unemployment is on the horizontal axis.
- B.
  
  Unemployment is on the vertical axis and inflation is on the horizontal axis.
- C.
  
  Price is on the vertical axis and unemployment is on the horizontal axis.
- D.
  
  Price is on the vertical axis and employment is on the horizontal axis.
- E.
  
  Employment is on the vertical axis and price is on the horizontal axis.
16.

Rational expectations create forecasts using all past information as well as the current decisions of other decision makers;
- A.
  
  True
- B.
  
  False
17.

Adaptive expectations create forecasts using all past information as well as the current decisions of other decision makers.
- A.
  
  True
- B.
  
  False
18.

Which of the following would be included in the U.S. GDP?
- A.
  
  A Volvo built by Ford in Gothenburg, Sweden
- B.
  
  A Hyundai built in Montgomery, Alabama
- C.
  
  A Corvette built in Bowling Green, Kentucky by General Motors
- D.
  
  All of the above
- E.
  
  B and C only