# devry ECON-312 week 2 quiz

Question # 00003851 Posted By: vikas Updated on: 11/21/2013 09:05 PM Due on: 11/29/2013
Subject Economics Topic General Economics Tutorials:
Question

(TCO 2) A demand curve

Student Answer: shows the relationship between price and quantity supplied.

indicates the quantity demanded at each price in a series of prices.

graphs as an upsloping line.

shows the relationship between income and spending.

Instructor Explanation: Chapter 3.

Question 2. Question :

(TCO 2) In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by

Student Answer: an increase in the cost of making donuts.

an increase in the price of coffee.

consumers expecting donut prices to fall.

Instructor Explanation: Chapter 3.

Question 3. Question :

(TCO 2) College students living off campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start their careers, their consumption of both goods frequently declines. This suggests that ramen noodles and boxed macaroni and cheese are

normal goods.

complementary goods.

substitute goods.

Instructor Explanation: Chapter 3.

Question 4. Question :

(TCO 2) Which of the following would mostly likely increase the demand for gasoline?

Student Answer: The expectation by consumers that gasoline prices will be higher in the future

The expectation by consumers that gasoline prices will be lower in the future

A widespread shift in car ownership from SUVs to hybrid sedans

A decrease in the price of public transportation

Instructor Explanation: Chapter 3.

Question 5. Question :

(TCO 2) Increasing marginal cost of production explains

Student Answer: the law of demand.

the income effect.

why the supply curve is upsloping.

why the demand curve is downsloping.

Instructor Explanation: Chapter 3.

Question 6. Question :

(TCO 2) If the demand for product X is inelastic, a 4% increase in the price of X will

Student Answer: decrease the quantity of X demanded by more than 4%.

decrease the quantity of X demanded by less than 4%.

increase the quantity of X demanded by more than 4%.

increase the quantity of X demanded by less than 4%.

Instructor Explanation: Chapter 4.

Question 7. Question :

(TCO 2) Suppose the price of local cable TV service increased from \$16.20 to \$19.80, and as a result, the number of cable subscribers decreased from 224,000 to 176,000. Use the Midpoint formula to find the answer. Along this portion of the demand curve, price elasticity of demand is

1.2

1.6

8.0

Instructor Explanation: Chapter 4.

Question 8. Question :

(TCO 2) A firm can sell as much as it wants at a constant price. Demand is thus

perfectly elastic.

relatively inelastic.

relatively elastic.

Instructor Explanation: Chapter 4.

Question 9. Question :

(TCO 2) If the University Chamber Music Society decides to raise ticket prices to provide more funds to finance concerts, the Society is assuming that the demand for tickets is

Student Answer: parallel to the horizontal axis.

shifting to the left.

inelastic.

elastic.

Instructor Explanation: Chapter 4.

Question 10. Question :

(TCO 2) The demand for a necessity whose cost is a small portion of one's total income is

perfectly price elastic.

relatively price inelastic.

relatively price elastic.

Instructor Explanation: Chapter 4.

Question 11. Question :

(TCO 2) What is the CETERIS PARIBUS assumption, and why is this assumption very important in the definition of Demand or Supply?

Question 12. Question :

(TCO 2) Suppose the price of widgets falls from \$7 to \$5 and consumption of widgets rises from 15 widgets a month to 25 widgets. Calculate your price elasticity of demand of widgets. What can you say about your price elasticity of demand of widgets? Is it Elastic, Inelastic, or Unitary Elastic? Why? Use the Midpoint formula and please show your work.

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1. ## Solution: devry ECON-312 week 2 quiz

Tutorial # 00003645 Posted By: vikas Posted on: 11/21/2013 09:27 PM
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