Question :
Multiple Choice – Section 03 Three Applications of Supply, Demand, : 1262400
Multiple Choice – Section 03 Three Applications of Supply, Demand, and Elasticity
1. Adecreaseinsupplywillcausethelargestincreaseinpricewhen
a.bothsupplyanddemandareinelastic.
b.bothsupplyanddemandareelastic.
c.demandiselasticandsupplyisinelastic.
d.demandisinelasticandsupplyiselastic.
2.Adecreaseinsupplywillcausethesmallestincreaseinpricewhen
a.bothsupplyanddemandareinelastic.
b.demandiselasticandsupplyisinelastic.
c.bothsupplyanddemandareelastic.
d.demandisinelasticandsupplyiselastic.
3.Thediscoveryofanewhybridwheatwouldincreasethesupplyofwheat.Asaresult,wheatfarmerswouldrealizeanincreaseintotalrevenueifthe
a.supplyofwheatiselastic.
b.supplyofwheatisinelastic.
c.demandforwheatisinelastic.
d.demandforwheatiselastic.
4.Becausethedemandforwheattendstobeinelastic,thedevelopmentofanew,moreproductivehybridwheatwouldtendto
a.increasethetotalrevenueofwheatfarmers.
b.decreasethetotalrevenueofwheatfarmers.
c.decreasethedemandforwheat.
d.decreasethesupplyofwheat.
5.Knowingthatthedemandforwheatisinelastic,ifallfarmersvoluntarilydidnotplantwheaton10percentoftheirland,then
a.consumersofwheatwouldbuymorewheat.
b.wheatfarmerswouldsufferareductionintheirtotalrevenue.
c.wheatfarmerswouldexperienceanincreaseintheirtotalrevenue.
d.thedemandforwheatwoulddecrease.
6.SupposeresearchersattheUniversityofWisconsindiscoveranewvitaminthatincreasesthemilkproductionofdairycows.Ifthedemandformilkisrelativelyinelastic,thediscoverywill
a.raisebothpriceandtotalrevenues.
b.lowerbothpriceandtotalrevenues.
c.raisepriceandlowertotalrevenues.
d.lowerpriceandraisetotalrevenues.
7.Supposethatcornfarmerswanttoincreasetheirtotalrevenue.Knowingthatthedemandforcornisinelastic,cornfarmersshould
a.plantmorecornsothattheywouldbeabletosellmoreeachyear.
b.increasespendingonfertilizerinanattempttoproducemorecornontheacrestheyfarm.
c.reducethenumberofacresonwhichtheyplantcorn.
d.contributetoafundthatpromotestechnologicaladvancesincornproduction.
8.Goodnewsforfarmingcanbebadnewsforfarmersbecausethe
a.supplycurveforanindividualfarmerisusuallyperfectlyelastic.
b.supplycurveforanindividualfarmerisusuallyperfectlyinelastic.
c.demandforbasicfoodstuffsisusuallyinelastic,meaningthatfactorsthatshiftsupplytotherightdecreasetotalrevenuestosellers.
d.demandforbasicfoodstuffsisusuallyelastic,meaningthatfactorsthatshiftsupplytotherightincreasetotalrevenuestosellers.
9.Ifsoybeanfarmersknowthatthedemandforsoybeansisinelastic,inordertoincreasetheirtotalrevenuestheyshould
a.usemorefertilizersandweedkillerstoincreasetheiryields.
b.plantadditionalacrestoincreasetheiroutput.
c.reducethenumberofacrestheyplanttodecreasetheiroutput.
d.Bothaandbarecorrect.
10.Farmprogramsthatpayfarmersnottoplantcropsonalltheirland
a.hurtfarmersbyloweringtheirtotalrevenueandhurtconsumersbycausingshortagesofsomefooditems.
b.helpfarmersbycuttingcosts,whichhelpsconsumersbyloweringfoodprices.
c.helpfarmersbyincreasingtotalrevenueinthemarketbuthurtconsumersbyraisingfoodprices.
d.helpfarmersdirectlysincetheyreceivegovernmentpaymentsbuthavenorealeffectsonconsumers.