Devry ECON 312 Week 2 Quiz Answer

Devry ECON 312 Week 2 Quiz Answer

1. Question: (TCO 2) In presenting the idea of a demand curve, economists presume that the most important variable in determining the quantity demanded is

Student Answer:
the price of the product itself.
consumer income.
the prices of related goods.
consumer tastes.
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.
a change in buyer tastes.
Instructor Explanation: Chapter 3.

Question 3. Question: (TCO 2) If X is a normal good, a rise in money income will shift the

Student Answer:
supply curve for X to the left.
supply curve for X to the right.
demand curve for X to the left.
demand curve for X to the right.
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) A firm’s supply curve is upsloping because

Student Answer:

the expansion of production necessitates the use of qualitatively inferior inputs.
mass production economies are associated with larger levels of output.
consumers envision a positive relationship between price and quality.
beyond some point the production costs of additional units of output will rise.
Instructor Explanation: Chapter 3.

Question 6. Question: (TCO 2) If the demand for bacon is relatively elastic, a 10% decline in the price of bacon will

Student Answer:
decrease the amount demanded by more than 10%.
increase the amount demanded by more than 10%.
decrease the amount demanded by less than 10%.
increase the amount demanded by less than 10%.
Instructor Explanation: Chapter 4.

Question 7. Question: (TCO 2) The price of product X is reduced from $100 to $90 and, as a result, the quantity demanded increases from 50 to 60 units. Therefore, demand for X in this price range

Student Answer:
has declined.
is of unit elasticity.
is inelastic.
is elastic.
Instructor Explanation: Chapter 4.

Question 8. Question: (TCO 2) The concept of price elasticity of demand measures

Student Answer:
the slope of the demand curve.
the number of buyers in a market.
the extent to which the demand curve shifts as the result of a price decline.
the sensitivity of consumer purchases to price changes.
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

Student Answer:
perfectly price inelastic.
perfectly price elastic.
relatively price inelastic.
relatively price elastic.
Instructor Explanation: Chapter 4.

Question 11. Question: (TCO 2) What is the Law of Supply? Why does the supply curve slope upwards?

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