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## Chapter 4 & 5 End 0f Chapter Quiz_Review

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Chapter 4 & 5End 0f Chapter Quiz/Review
Practice What You Know
Supposethat the price of candy bars increases by 100%. As a result of this, you decide to purchase 50% less candy bars. How would you describe your demand for candy bars?Demand is elastic.Demand is unit elastic.Demand is inelastic.Demand is perfectly inelastic.
Practice What You Know
Suppose that Doug receives a pay increase at work, and his income increases by 20%. As a result, Doug decides to buy 12% less ground beef. For Doug, ground beef is a(n) ________.luxury goodnecessity goodnormal goodinferior good
Practice What You Know
Economists have studied that when the price of chicken increases, people purchase less rice. With these two goods, which of the following is true?(EC= Cross-price elasticity)EC< 0, chicken and rice are complements.EC> 0, chicken and rice are complements.EC< 0, chicken and rice are substitutes.EC> 0, chicken and rice are substitutes.
Practice What You Know
In terms of price elasticity of demand, which of the following goods do you think is the least elastic (most inelastic)?new houseelectricity to power your homea specific brand of breakfast cerealnew vehicle
Practice What You Know
Suppose a firm is selling a product at a price on the inelastic portion of the demand line. This firm could increase revenue by doing what?lowering the price, selling more unitslowering the price, selling less unitsincreasing the price, selling more unitsincreasing the price, selling less units
Practice What You Know
What will be the effect of a non-binding price ceiling?A surplus will be created.A shortage will be created.There will be no effect.The effect is unknown.
Practice What You Know
In the event of a binding price ceiling, what is one function that a black market serves?reduces the shortage caused by the price ceilingdecreases the price even furthercreates a monopolycauses a surplus of the good
Practice What You Know
What is one unintended consequence of rent control?People in rent-controlled units will relocate more often.Landlords may not maintain rental units.Too many apartments will be built, creating a surplus of units.People will choose not to live in big cities.
Practice What You Know
Which of the following is true about labor markets?The minimum wage is a price ceiling.Unemployment is a labor shortage.Firms supply the labor.None of the above.
Practice What You Know
Supply and demand generally become more elastic in the long run. This means that shortages caused by price ceilings _________ in the long run.disappear completelybecome smallerbecome largerbecome infinitely large

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