Test 2

A  an increase in the demand for wines produced in Oregon.

B  a decrease in the demand for wines produced in Oregon.

C  a decrease in the quantity demanded for wines produced in Oregon.

D  an increase in the quantity demanded for wines produced in Oregon.

A  0.9

B  1.1

C  1.8

D  0.1

A  price elasticity of demand is perfectly elastic when compared to beer

B  price elasticity of demand is inelastic and is more inelastic than beer

C  price elasticity of supply is perfectly inelastic relative to beer

D  price elasticity of demand is elastic and is more elastic than beer

A  8 percent

B  -8 percent

C  -12.5 percent

D  -11.754 percent

E  12.5 percent

A  Corona customers are not as responsive to price changes as are the customers of Miller.

B  Corona beer is a luxury good, whereas the Miller beer is an inferior good.

C  Corona and Miller are close substitutes.

D  Corona and Miller are poor substitutes

A  that demand is inelastic, which means that the demand curve is relatively steep. Thus, the equilibrium price will not change much.

B  that demand is elastic, which means that the demand curve is relatively steep. Thus, the equilibrium price will increase.

C  that supply is inelastic, which means that the supply curve is relatively steep.

D  that supply is elastic, which means that the supply curve is relatively flat. Thus, the equilibrium price will increase dramatically.

A  demand for beachfront land in Malibu must be perfectly elastic.

B  supply of beachfront land in Malibu must be perfectly inelastic.

C  demand for beachfront land in malibu must be perfectly inelastic.

D  supply of beachfront land in Malibu must be perfectly elastic.

A  HIV medication

B  Flu vaccine

C  Cavity filling service performed by a dentist

D  Car wash service

A  luxury cars

B  none of the available answers

C  vodka

D  Opiod Prescriptions (Highly addictive pain relieving medications)

A  sellers pay 60 percent of the tax.

B  sellers pay 25 percent of the tax.

C  consumers pay 25 percent of the tax.

D  consumers pay 20 percent of the tax.

A  Nothing will change the burden of the tax.

B  The tax will be increased to 20 percent.

C  Elasticity of demand falls to 0.1.

D  Elasticity of supply falls to 0.3.

A  Tuna with a price elasticity of demand of 0.12

B  Hair cuts with a price elasticity of demand of 0.62

C  Beef with a price elasticity of demand of 0.32

D  Lamb with a price elasticity of demand of 0.73

A  demand is 1.4 and elasticity of supply is 2.16. Consumers pay a larger portion of the tax.

B  demand is 0.7 and elasticity of supply is 46. Consumers pay a smaller portion of the tax.

C  supply is 0.7 and elasticity of demand is 46. Suppliers pay a smaller portion of the tax.

D  supply is 1.4 and elasticity of demand is 2.16. Suppliers pay a larger portion of the tax.

A  car wash service

B  cavity filling service performed by a dentist

C  HIV medication

D  Opiod Prescriptions (Highly addictive pain relieving medications)

A  Consumers will be burdened with 2/3 of the tax; this is not realistic given that butter is a small percentage of individual’s budgets and therefore the price elasticity of demand should be elastic or greater than 1, so we would expect consumers to bear a greater portion of the tax relative to producers.

B  Consumers will be burdened with 1/2 of the tax; this is realistic given that butter is a small percentage of individual’s budgets and therefore the price elasticity of demand should be inelastic or less than 1, so we would expect consumers to bear a smaller portion of the tax relative to producers.

C  Consumers will be burdened with 1/2 of the tax; this is not realistic given that butter is a small percentage of individual’s budgets and therefore the price elasticity of demand should be inelastic or less than 1, so we would expect consumers to bear a greater portion of the tax relative to producers.

D  Consumers will be burdened with 2/3 of the tax; this is realistic given that butter is a small percentage of individual’s budgets and therefore the price elasticity of demand should be inelastic or less than 1, so we would expect consumers to bear a greater portion of the tax relative to producers.

A  they are regressive.

B  they yield no revenue.

C  they change people’s behavior.

D  they are progressive.

A  be indifferent between the two dates

B  go on a date with Alex

C  go on a date with Alex  because the marginal utility per dollar is the greater of the two

D  go on a date with Kelly

A  people should spend all of their income on one good.

B  the more we consume of something, the smaller the total satisfaction received from that good.

C  the more we buy of something, the more it costs.

D  the more we consume of something, the less each additional unit adds to our satisfaction.

A  Florida because her total cost will be lower

B  Florida because her pleasure per dollar will be greater

C  Mexico because her total pleasure will be greater

D  Mexico because her pleasure per dollar will be greater

A  producer surplus will decrease and there will be some lost surplus.

B  both producer surplus and consumer surplus will increase.

C  there will be lost surplus, as both producer surplus and consumer surplus decrease.

D  consumer surplus will decrease and there will be some lost surplus.

A  market shortage.

B  producer surplus.

C  consumer surplus.

D  market surplus.

A  choose to eat at the Embassy Suites

B  be indifferent between the two meals

C  choose to eat the Whopper combo meal

D  decide that eating at the Embassy Suites is preferable because though the marginal utilities of both meals are the same, the total utility is greater in the case of the meal at the Embassy Suites.