ECON 2302 Week 2 Quiz

ECON 2302 Week 2 Quiz  | Assignment Help | Central Texas College

Question 1

Elasticity of demand is closely related to the slope of the demand curve. The more responsive buyers are to a change in price, the     

a. closer to the vertical axis the demand curve will sit.

b. further to the right the demand curve will sit.

c. steeper the demand curve will be.

d. flatter the demand curve will be.

Question 2

Which of the following statements helps to explain why government drug interdiction increases drug-related crime?          

a. The direct impact is on buyers, not sellers.

b. Successful drug interdiction policies reduce the demand for illegal drugs.

c. In the short run, both equilibrium quantities and prices will fall in the markets for illegal drugs.

d. Drug addicts will have an even greater need for quick cash to support their habits.

Question 3

When studying how some event or policy affects a market, elasticity provides information on the                                

a. tradeoff between equality and efficiency.

b. change in the costs of production.

c. direction and magnitude of the effect.

d. effect on the budget deficit or surplus.

Question 4

A candle manufacturer produces 4,000 units when the market price is $11 per unit and produces 6,000 units when the market price is $13 per unit. Using the midpoint method, for this range of prices, the price elasticity of supply is about                                  

a. 6.

b. 0.4.

 c. 2.4.

d. 0.67.

Question 5

A person who takes a prescription drug to control high cholesterol most likely has a demand for that drug that is                        

a. highly responsive to changes in income.

 b. inelastic.

c. unit elastic.

d. elastic.

Question 6

The consumption of water by local residents that may include pesticide runoff from local farmers’ fields is an example of                              

a. laissez-faire.

b. market power.

c. market equilibrium.

d. externalities.

Question 7

Economists tend to see ticket scalping as                                   

a. an inequitable interference in the orderly process of ticket distribution.

b. an unproductive activity which should be made illegal everywhere.

c. a way of increasing the efficiency of ticket distribution.

d. a way for a few to profit without producing anything of value.

Question 8

Caroline sharpens knives in her spare time for extra income. Buyers of her service are willing to pay $2.95 per knife for as many knives as Caroline is willing to sharpen. On a particular day, she is willing to sharpen the first knife for $2.00, the second knife for $2.25, the third knife for $2.75, and the fourth knife for $3.50. Assume Caroline is rational in deciding how many knives to sharpen. Her producer surplus is                                   

a. $1.30.

b. $1.15.

c. $1.85.

d. $0.95.

Question 9

Welfare economics explains which of the following in the market for televisions?                                   

a. The market equilibrium price for televisions maximizes the total welfare of television buyers and sellers.

b. The government sets the quantity of televisions; firms respond to the quantity by charging a specific price.

c. The market equilibrium price for televisions maximizes consumer welfare and minimizes producer profit.

d. The government sets the price of televisions; firms respond to the price by producing a specific level of output.

Question 10

David tunes pianos in his spare time for extra income. Buyers of his service are willing to pay $135 per tuning. One particular week, David is willing to tune the first piano for $115, the second piano for $125, the third piano for $140, and the fourth piano for $175. Assume David is rational in deciding how many pianos to tune. His producer surplus is                           

a. $75.

b. $-15.

c. $30.

d. $20.