1. The income elasticity of demand (Points : 1)
A measures the change in income necessary for a given change in quantity demanded.
B measures the responsiveness of income to changes in quantity demanded.
C measures the responsiveness of quantity demanded to changes in income.
D is the ratio of the percentage change in income to the percentage change in quantity demanded.
2. An entrepreneur is a person who does all of the following EXCEPT (Points : 1)
A assumes the risk of a firm.
B organizes and manages a firm.
C turns a new idea or product into a business.
D always makes a profit.
3. According to the law of demand there is ________ relationship between price and quantity demanded. (Points : 1)
A a positive
B a negative
C either a positive or negative
D a constantly changing
4. Cross-price elasticity of demand measures the response in the (Points : 1)
A price of a good to a change in the quantity of another good demanded.
B income of consumers to the change in the price of goods.
C quantity of one good demanded when the quantity demanded of another good changes.
D quantity of one good demanded to a change in the price of another good.
5. Demand determines price entirely when (Points : 1)
A demand is downward sloping.
B demand is perfectly inelastic.
C supply is perfectly inelastic.
D supply is perfectly elastic.
6. When there are more substitutes for a product, the ________ for the product is ________. (Points : 1)
A demand; less price elastic
B demand; more price elastic
C income elasticity; greater
D income elasticity; smaller
7. Suppose the demand for books goes down when the price of video games goes down. We can say that these two goods are (Points : 1)
A complements.
B substitutes.
C unrelated goods.
D perfect substitutes.
8. For normal goods, the substitution and income effects of a price decrease will (Points : 1)
A both decrease the quantity of the good demanded.
B both increase the quantity of the good demanded.
C the substitution effect will increase the quantity of the good demanded while the income effect will decrease the quantity of the good demanded.
D the substitution effect will decrease the quantity of the good demanded while the income effect will increase the quantity of the good demanded.
9. A factor market is (Points : 1)
A where goods are exchanged.
B where resources are exchanged.
C where goods are made.
D organized by government.
10. Jane has $500 a week to spend on clothing and food. The price of clothing is $25 and the price of food is $10. The clothing and food pairs in Jane's choice set include ________ units of clothing and ________ units of food. (Points : 1)
A 50; 50
B 20; 50
C 15; 25
D 8; 30
A measures the change in income necessary for a given change in quantity demanded.
B measures the responsiveness of income to changes in quantity demanded.
C measures the responsiveness of quantity demanded to changes in income.
D is the ratio of the percentage change in income to the percentage change in quantity demanded.
2. An entrepreneur is a person who does all of the following EXCEPT (Points : 1)
A assumes the risk of a firm.
B organizes and manages a firm.
C turns a new idea or product into a business.
D always makes a profit.
3. According to the law of demand there is ________ relationship between price and quantity demanded. (Points : 1)
A a positive
B a negative
C either a positive or negative
D a constantly changing
4. Cross-price elasticity of demand measures the response in the (Points : 1)
A price of a good to a change in the quantity of another good demanded.
B income of consumers to the change in the price of goods.
C quantity of one good demanded when the quantity demanded of another good changes.
D quantity of one good demanded to a change in the price of another good.
5. Demand determines price entirely when (Points : 1)
A demand is downward sloping.
B demand is perfectly inelastic.
C supply is perfectly inelastic.
D supply is perfectly elastic.
6. When there are more substitutes for a product, the ________ for the product is ________. (Points : 1)
A demand; less price elastic
B demand; more price elastic
C income elasticity; greater
D income elasticity; smaller
7. Suppose the demand for books goes down when the price of video games goes down. We can say that these two goods are (Points : 1)
A complements.
B substitutes.
C unrelated goods.
D perfect substitutes.
8. For normal goods, the substitution and income effects of a price decrease will (Points : 1)
A both decrease the quantity of the good demanded.
B both increase the quantity of the good demanded.
C the substitution effect will increase the quantity of the good demanded while the income effect will decrease the quantity of the good demanded.
D the substitution effect will decrease the quantity of the good demanded while the income effect will increase the quantity of the good demanded.
9. A factor market is (Points : 1)
A where goods are exchanged.
B where resources are exchanged.
C where goods are made.
D organized by government.
10. Jane has $500 a week to spend on clothing and food. The price of clothing is $25 and the price of food is $10. The clothing and food pairs in Jane's choice set include ________ units of clothing and ________ units of food. (Points : 1)
A 50; 50
B 20; 50
C 15; 25
D 8; 30
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