ECN 2110 Week 2 Quiz

ECN 2110 Week 2 Quiz | Baker College

Module 2 Quiz

Question 1

The “law of supply” functions in labor markets; that is, a higher ___________ for labor leads to a higher quantity of labor supplied.

·         price

·         demand

·         supply

·         quantity

Question 2

If the demand for software engineers ____________ slower than does supply, then wages of software engineers will

·         increases; remain constant

·         increases, rise

·         increases; fall

·         decreases; fall

Question 3

Many economists believe that the trend toward greater wage inequality across the U.S. economy was primarily caused by ___________________.

·         the recessionCorrect!

·         new technologies

·         the rise of global markets

·         inflation

Question 4

The imposition of a price ceiling on a market often, but not always results in:

·         an increase in investment in the industry.

·         a surplus

·         a shortage

·         a decrease in discrimination on the part of sellers.

Question 5

Table 5-1

Refer to Table 5-1. If D2 and S2 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are ________ and _________, respectively.

Price      D1           D2           S1           S2

$12         5              9              19           14

$10         8              12           17           12

$8           11           15           15           10

$6           13           18           13           8

$4           16           21           11           6

$2           18           24           9              4

·         $12; 12

·         $10; 12

·         $8; 15

·         $6; 18

Question 6

The price elasticity of demand measures the:

·         responsiveness of quantity demanded to a change in quantity supplied.

·         responsiveness of price to a change in quantity demanded.

·         responsiveness of quantity demanded to a change in price.

·         responsiveness of quantity demanded to a change in income.

Question 7

Billy Bob's Barber Shop knows that a 5 percent increase in the price of their haircuts results in a 15 percent decrease in the number of haircuts purchased.  What is the elasticity of demand facing Billy Bob's Barber Shop?

·         0.15

·         3.0

·         0.10

·         0.05

Question 8

Refer to Figure 5-1. With reference to Graph A, at a price of $10, total revenue equals:

·         $1000

·         $500

·         $400

·         $200

Question 9

A 25 percent decrease in the price of breakfast cereal leads to a 20 percent increase in the quantity of cereal demanded. As a result:

·         total revenue will decrease.

·         total revenue will increase.

·         total revenue will remain constant.

·         the elasticity of demand will increase.

Question 10

Supply is said to be ____________ when the quantity supplied is very responsive to changes in price.

·         independent

·         inelastic

·         inelastic

·         elastic