The demand is highly inelastic for paintings by Vincent van Gogh

Question # 00542879 Posted By: dr.tony Updated on: 06/09/2017 02:28 AM Due on: 06/09/2017
Subject Economics Topic Microeconomics Tutorials:
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Question 11 (5 points)


The demand is highly inelastic for paintings by Vincent van Gogh. When selling paintings by van Gogh, total revenue will be ___ the higher the price is.

Question 11 options:
a)

none of these answers are correct

b)

higher

c)

lower

d)

either a or b are likely to be true


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Question 12 (5 points)


Based on the demand schedule given below for refrigerators . The price elasticity of demand from point C to point D equals ____ ; which means that the demand from point C to point D is ____. (Use the mid-point formula to compute the price elasticity of demand.)

PointPriceQuantity Demanded
A$1001,800
B$1501,400
C$2001,100
D$250900
Question 12 options:
a)

-0.9, perfectly elastic

b)

-1.111, elastic

c)

-1.111, perfectly inelastic

d)

-0.9, inelastic


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Question 13 (5 points)


A firm produces 20 calculators that they sell for $15 each. The average variable cost for the 20 calculators is $13/unit. The fixed cost is $40. What amount of the economic profit does this firm earn?

Question 13 options:
a)

-$20

b)

0

c)

-$2

d)

$20


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Question 14 (5 points)


A television producer must pay fixed cost of $150. He pays an additional $20 to produce every television. The market price is $50 for televisions. How many televisions must be sold in order to break even? (Firms break even when generating economic profit at $0.)

Question 14 options:
a)

5

b)

10

c)

1

d)

15


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Question 15 (5 points)


Which of the formula below will NEVER be used for computing the marginal cost?

Question 15 options:

the change in total cost divided by the change in total output

the change in variable cost divided by the change in total output

total cost divided by the total output

All of the answers given here


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Question 16 (5 points)


The total cost is $1,000 for 500 CD's and $2,000 for 1,000 CD's. Based on this information, the marginal cost of the 1,000th CD is _____.

Question 16 options:
a)

$2.50

b)

$2

c)

$1,200

d)

$2.40


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Question 17 (5 points)


Bob owns a firm that produces cars. He pays fixed cost of $1,000 for the factory. He pays an additional $100 when producing every car. In his firm, the marginal cost of the 5th car is _____.

Question 17 options:
a)

$20

b)

$100

c)

$200

d)

$400


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Question 18 (5 points)


Diminishing marginal returns occur when the marginal product falls as the use of

Question 18 options:
a)

all the inputs increases altogether

b)

leased equipment is changed to be owned equipment

c)

a certain specific input keeps increasing and use of all the other inputs is held unchanged

d)

the resources has not reached efficiency


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Question 19 (5 points)


Below, find the cost information given for the production of tires. What is the marginal cost of the fourth tire?

QuantityVariable Cost
00
210
430
660
Question 19 options:
a)

$60

b)

$30

c)

$10

d)

$15


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Question 20 (5 points)


Economies of scale arise when

Question 20 options:
a)

the total cost triples as total output doubles

b)

the total cost doubles as total output triples

c)

the total cost doubles as total output doubles

d)

the total cost triples as total output triples


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Question 21 (5 points)


Given below is the long run average cost schedule of a firm. Between which two quantities does the long run average cost schedule show constant returns to scale?

Quantity Produced by a FirmLong-Run Average Cost ($ per unit)
300$100
700$60
1,000$50
1,500$50
2,000$55
5,000$110
Question 21 options:
a)

between 1,000 and 2,000 units

b)

between 1,000 and 1,500 units

c)

between 300 and 700 units

d)

between 300 and 5,000 units


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Question 22 (5 points)


When market shows a surplus, the market price is most likely set at where it is ___ the equilibrium price.

Question 22 options:

above

at

below

far below


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Question 23 (5 points)


Consider the market of orange. After Weather Channel forecast that early March frost will massively destroy Florida orange crop. Economists will predict price to ___ for orange.

Question 23 options:

increase in the harvest season

fall in the harvest season

remain unchanged in the harvest season

cause demand to increase


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Question 24 (5 points)


When shopping, you find 9" frozen pizza are priced between $6.99 to $12.99. These pizzas are of different brands and are made of differentiated ingredients. You do not find any brand of frozen pizza priced below $6.99 or over $11.99. Most likely, the market structure of the frozen pizza is a _____.

Question 24 options:

perfect competition

monopoly

oligopoly

monopolistic competition


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Question 25 (5 points)


For the unitary elastic demand, corresponding to 5% change in price, _____% change is expected in quantity sold.

Question 25 options:

5%

-5%

-10%

-1%

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