Question: P = 16 – 0.002Q
P = 2 + 0.005Q
Unfortunately, because this is a new product, UFI doesn’t actually know these equations. If they set the price of Garniche at $8 per bottle, what will occur?
Answer Options:
A. There will be a shortage of 2,800 bottles.
B. There will be a surplus of 10,800 bottles.
C. There will be a shortage of 2,000 bottles.
D. There will be a surplus of 2,800 bottles.
Answer: A. There will be a shortage of 2,800 bottles.
Question: Price floors and ceilings are implemented to
Answer Options:
A. Fix long-term shortages or surpluses.
B. Benefit a particular population group.
C. Ensure that quantity supplied equals quantity demanded.
D. Raise revenue for the government.
Answer: B. Benefit a particular population group.
Question: An effective price ceiling
Answer Options:
A. Leads to more of a good or service being exchanged.
B. Increases quantity supplied.
C. Hurts producers.
D. Pushes the price higher than it would be in a free market.
Answer: C. Hurts producers.
Question: Doris Day recorded the song “Ten Cents A Dance” in 1955. That was the price a man would have to pay to dance with a “taxi dancer” at dancehalls. If Ms. Day were to ask for an equivalent amount of money in 2020, how much would she request?
Answer Options:
(No answer options provided; calculation question.)
Answer: Approximately $0.30
Question: Ellen’s salary in 1990 was $42,000. By 2010 it had risen dramatically to $62,000. How is Ellen doing?
Answer Options:
(No answer options provided; analysis question.)
Answer: Ellen’s real income has decreased when adjusted for inflation.
Question: When a firm produces a final good but fails to sell it and instead adds it to inventory, GDP still goes up.
Answer Options:
True
False
Answer: True
Question: Calculating per capita GDP allows us to see how income is distributed within a country.
Answer Options:
True
False
Answer: False
Question: One sector growth changes the opportunity cost of both goods.
Answer Options:
True
False
Answer: True
Question: Economically rational consumers have reasonable goals.
Answer Options:
True
False
Answer: False
Question: Individuals who pay the same price for an all-inclusive vacation package to Cancun have the same opportunity cost.
Answer Options:
True
False
Answer: False
Question: A rising price acts as a signal to
Answer Options:
A. Consumers to increase consumption of this good.
B. Suppliers to cut back on the production of this good.
C. Government to impose a price floor.
D. Suppliers to devote more resources to the production of this good.
Answer: D. Suppliers to devote more resources to the production of this good.