# Econ Review Part 3

18 Questions | 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