Question : 21) You explain to your roommate Surya, who makes beaded : 1244594

 

21) You explain to your roommate Surya, who makes beaded headbands, about an economic theory which asserts that consumers will purchase more of a product at lower prices than they will at higher prices. She contends that the theory is incorrect because over the past two years she has lowered the price of her headbands and yet has seen a decrease in sales. How would you respond to Surya?

A) Surya is right; she has evidence to back her claim. The theory must be erroneous.

B) Surya is making the mistake of assuming that correlation implies causation.

C) I will explain to her that she is making the error of reverse causality: it is the decrease in demand that has caused her to lower her prices.

D) I will explain to her that there are some omitted variables that have contributed to a decrease in her sales such as changes in income.

22) In 2013, Smileytown consumed 12,000 gallons of mouthwash. In 2014, mouthwash consumption rose to 17,000 gallons. Calculate the percentage change in mouthwash consumption.

A) 17.2%

B) 29.4%

C) 41.7%

D) 70.6%

23) If a straight line passes through the point x = 24 and y = 8 and also through the point x = 8 and y = 16, the slope of this line is

A) negative 8 divided by 4.

B) seven tenths.

C) negative one half.

D) one and one half.

24) If the price of gasoline was $3.25 a gallon and it is now $3.75 a gallon, what is the percentage change in price?

A) 7.1 percent

B) 13.3 percent

C) 15.4 percent

D) 33.3 percent

25) At a recent company meeting, Ravi Batra, sales manager of Life’s a Beach, a surfboard producer announced, “We have increased our sales by 13 percent in just 9 months.” Suppose 9 months ago, its sales amounted to $245,000, what is the value of its sales today?

A) $31,850

B) $207,638

C) $276,850

D) $359,905

26) If a graph has a line that shows the quantity of flat-screen televisions sold in the last five years, it is known as

A) a pie chart.

B) a time-series graph.

C) a demand curve for outsourcing.

D) a supply curve of outsourcing.

27) Two-dimensional graphs have a horizontal and a vertical axis and are used in economics to illustrate

A) relationships between two economic variables.

B) one variable.

C) a flow chart.

D) a pie chart.

28) How can the influence of a third variable be shown on a two-dimensional graph?

A) by allowing the relationship to be nonlinear

B) by allowing the position of the relationship line or curve to shift on the graph

C) by drawing a third axis coming out of the two axes

D) by super-imposing the third variable on the two-dimensional graph

29) Which of the following statements is true?

A) An inverse relationship has a positive slope value.

B) A direct relationship has a negative slope value.

C) A curved line has slope values that change at every point.

D) A straight line has a slope of one.

30) The relationship between sales and revenue is

A) an inverse relationship.

B) a direct relationship.

C) a negative relationship.

D) independent.

 

 

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