1. Taxes on goods with __________ demand curves will tend to raise more tax revenue for the government than taxes on goods with __________ demand curves.
A: inelastic; elastic
2. The portion of your income given up to buy something is a factor influencing its price elasticity of demand.
A: True
3. If the percent change in quantity demanded is less than the percent change in price, economists label the demand for the good as elastic.
A: False
4. When you chose to get out of bed this morning, the opportunity cost of going to school was both watching TV and going to the mall.
A: False
5. nterpret the following statement: “An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market.”
A: The statement is correct.
6. The law of demand tells us precisely how much more or less consumers will buy when the price of a good or service changes.
A: False
7. When demand is inelastic:
A: consumers are not very responsive to changes in price.
8. Because of their relatively small national economies, which of the following is most likely considered to be the most important factor for Belgium, Korea, and Canada to take full advantage of specialization?
A: international trade
9. Consider a firm deciding to invest in a new production line. Based on the podcast’s discussion of opportunity cost, what would be the most accurate representation of its opportunity cost?
A: The profit from the most profitable alternative investment project that was not chosen.
10. The opportunity cost of attending university is likely to include all except which of the following?
A: the cost of haircuts received during the school term