Economics and True False

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Question 2 (0.5/0.5)

Exhibit 2–4 Production possibilities curve data

| A | B | C | D | E | F | Capital goods | 150 | 140 | 120 | 90 | 50 | 0 | Consumer goods | 0 | 20 | 40 | 60 | 80 | 100 | | | | | | | |

In Exhibit 2-4, the concept of increasing opportunity costs is represented by the fact that:

a) Greater amounts of capital goods must be sacrificed to produce each additional unit of consumption goods.

Question 4 (0.5/0.5)

As shown in Exhibit 8-3, in order to maximise its profit, what price should GeneTech charge for it’s vaccine?

a) $35 per dose

Question 5 (0.5/0.5)

A demand curve for the Steel Porcupines’ concert tickets would show the:

a) Number of tickets that will be purchased
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This is evidence that price elasticity of demand for steak is: a) Unitary elastic
Question 30 (0.5/0.5)
The income elasticity of demand for shoes is estimated to be 1.5. We can conclude that shoes: a) Are a normal good
Question 31 (0.5/0.5)
The price elasticity of demand for a vertical demand curve is: a) Perfectly inelastic
Question 32 (0.5/0.5)
To maximise its profit, a monopoly should choose a price where demand is: a) Elastic

Question 37 (0.5/0.5)

In Exhibit 7-3, when the price is $2, the profit-maximising (or loss-minimising) firm: a) Should shut down and produce zero
Question 38 (0.5/0.5)
Which of the following is not a market failure? a) Prices determined in competitive markets, which consumers, as individuals, have no control over.
Question 39 (0.5/0.5)
Suppose prices for a new home have risen, yet sales of new homes have also risen. We can conclude that: a) The demand for new homes has risen
Question 40 (0.5/0.5)
Water is often provided to households by one supplier because: a) It is a natural monopoly

PRODUCTION POSSIBILITIES AND OPPORTUNITY COST CHAPTER 2 Which of the following is NOT one of the three fundamental economic questions? | a. | What happens when you add to or subtract from a current situation? | | | b. | For whom to produce? | | | c. | How to produce? | | |

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