Economics topic 3

Almond Pest Destroys 50 Percent of Crop

Prices Expected to Double

For a consumer who loves almonds but has a limited budget, what is this new headline likely to trigger?

• supply shock leading to higher consumption of almonds

• income effect leading to lower demand for several goods

• law of demand leading to lower price for all goods

• market equilibrium leading to stable prices for almonds

Study the demand curves below. If the price of a slice of pizza decreased from $4.00 to $2.00, how would that change the number of slices of pizza demanded each day by the market?

• The demand would increase by 2 slices per day.

• The demand would decrease by 2 slices per day.

• The demand would increase by 100 slices per day.

• The demand would decrease by 100 slices per day.

Ashley started taking classes at a local community college and had to switch her job from full time to part time, so she makes less money. How would this development likely affect the graphs below?

• The market demand curve would shift to the right.

• The market demand would move up the demand curve.

• Her individual demand curve would extend downward.

• Her individual demand curve would shift to the left.

Which of the following goods would be considered a complement to flashlights in the context of a demand for goods?

• batteries

• candles

• floodlights

• binoculars

Which of the following describes the relative elasticity in demand for the product shown in a period of economic change?

• Demand is inelastic because it is a luxury item.

• Demand is elastic because there are no substitutes.

• Demand is inelastic because it makes up a large share of most people’s budget.

• Demand is inelastic because it is a low-cost necessity.

The owner of a hamburger stand is thinking about raising the price of a hamburger from $3.00 to $5.00. Based on the table, what can the owner expect about demand in that case?

• Demand will increase revenue.

• Demand will be elastic.

• Demand will be inelastic.

• Demand will be unitary elastic.

Which of the following price / output pairs would appear on the supply schedule used to create the individual supply curve below?

• $1.00 / 100

• $5.00 / 250

• $3.00 / 2,000

• $5.00 / 350

A new variety of apple from imported apple trees has proved popular with American consumers. What challenge does this represent to the apple growers and their desire to take advantage of this development?

• Demand for fruits such as apples is inelastic in the short run.

• Demand for fruits such as apples is elastic in the short run.

• Supply of fruits such as apples is inelastic in the short run.

• Supply of fruits such as apples is elastic in the short run.

According to this table, which of the following explains why the owner of the beanbag factory would be willing to accept an increase in variable cost from $63 per hour to $82 per hour?

• The increase will result in a significant drop in fixed cost.

• The increase will allow the owner to decrease marginal cost.

• The increase will make possible an increase in the factory’s profit.

• The increase will equalize marginal cost and marginal revenue.

What is the marginal product of labor that results from hiring the seventh worker?

• one beanbag per hour

• three beanbags per hour

• five beanbags per hour

• seven beanbags per hour