MICROECONOMICS REVIEW 1 Beef is a normal good You observe that both the equilibrium price and quantity of beef have fallen over time Which of the following explanations would be most consistent with t[.]
MICROECONOMICS REVIEW Beef is a normal good You observe that both the equilibrium price and quantity of beef have fallen over time Which of the following explanations would be most consistent with this observation? a Consumers have experienced an increase in income and beef-production technology has improved b The price of chicken has risen and the price of steak sauce has fallen c New medical evidence has been released that indicates a negative correlation between a person’s beef consumption and his or her longevity d The demand curve for beef must be positively sloped During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health As a result, there has been a significant decrease in the amount of beef produced Which of the following best explains the decrease in production? a Beef producers, concerned about the health of their customers, decided to produce relatively less beef b Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef c Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the equilibrium price of beef, making it less attractive to produce.=> P decreases d Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace Which of the following events would unambiguously (clear) cause a decrease in the equilibrium price of cotton shirts? a an increase in the price of wool shirts and a decrease in the price of raw cotton b a decrease in the price of wool shirts and a decrease in the price of raw cotton c an increase in the price of wool shirts and an increase in the price of raw cotton d a decrease in the price of wool shirts and an increase in the price of raw cotton Which of the following events would cause the price of oranges to fall? a There is a shortage of oranges b An article is published in which it is claimed that tangerines cause a serious disease, and oranges and tangerines are substitutes c The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation’s oranges d All of the above are correct Which of the following events would definitely result in a higher price in the market for Snickers? a Demand for Snickers increases and supply of Snickers decreases b Demand for Snickers and supply of Snickers both decreases c Demand for Snickers decreases and supply of Snickers increases d Demand for Snickers and supply of Snickers both increase Which of the following sets of events would most likely cause an increase in the price of a new house? a higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future b lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future c lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future d higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future Table 5-1 Good A Price Elasticity of Demand 1.3 Factors Less elastic B 2.1 More elastic Few substitute/ Broadly defined market/ Portions in income to buy/short-run/necessary Refer to Table 5-1 Which of the following is consistent with the elasticities given in Table 5-1? a A is a luxury and B is a necessity b A is a good several years after a price increase, and B is that same good several days after the price increase c A is a Kit Kat bar and B is candy d A has fewer substitutes than B 10 Refer to Table 5-1 Which of the following is consistent with the elasticities given in Table 5-1? a A is grapes and B is fruit b A is T-shirts and B is socks c A is train tickets before cars were invented, and B is train tickets after cars were invented d A is diamond necklaces and B is beds Table 5-2 The following table shows a portion of the demand schedule for a particular good at various levels of income Price $24 $20 $16 $12 $8 $4 Quantity Demanded (Income = $5,000) 10 12 Quantity Demanded (Income = $7,500) 12 15 18 Quantity Demanded (Income = $10,000) 12 16 20 24