Question

43.   Economists would classify all the following as land except:
a)   2000 acres of virgin land
b)   Crude oil reserves
c)   A hydro electric dam
d)   Iron ore deposits
44.   As a student of economics, when you speak of scarcity, you are referring to the ability of society to:
a)   Employ all of its resources
b)   Consume all that is produced
c)   Satisfy economic wants given scarce resources
d)   Continually make technological advances and increase production
45.   Airlines charge business travelers more than leisure travelers because there is more:
a)   Elastic supply of business travel
b)   Inelastic supply of business travel
c)   Elastic demand for business travel
d)   Inelastic demand for business travel
46.   For which product is the income elasticity of demand most likely to be negative:
a)   Computer software
b)   Used clothing
c)   Basketballs
d)   Bread
47.   For which product is the income elasticity of demand most likely to be positive: a) Re-treaded tires
b)   Cabbage
c)   Used clothing
d)   Computers
48.   A study reported that the coefficient of the cross elasticity of popcorn and potato chips is positive. Based on this report, you can conclude that popcorn and potato chips are: a) Normal goods
b)   Complementary goods
c)   Independent goods
d)   Substitute goods

Quantity   Total Utility-
Movies   Total Utility -
Books
1   50   22
2   80   42
3   100   52
4   110   57
5   116   60
6   121   62
7   123   63
Based on the table above:
49.   Suppose the price of Movies is $8 each and price of books is $20 each. If the consumer had $80 to spend, how much of each product should the consumer buy to achieve maximum total utility?
a)   7 movies and 4 books
b)   5 movies and 2 books
c)   4 movies and 2 books
d)   Cannot be determined
50.   If the price of the books fell to $10 and the price of movies stayed the same, he or she would purchase:
a)   The same amount of the two goods
b)   More books and fewer movies
c)   More books and more movies
d)   More books and the same amount of movies

Answer 1

Q-43 :: ANSWER :: (C) A hydro electric dam

=> Explanation ::

In economics Land Refers to The Natural Things Not Human Mad Things Consider As The Land. So All The Natural Resources Are Land In Economics But A Hydro Electric Dam Is Not Considered As A Land

Q-44 :: ANSWER :: (C) Satisfy economic wants given scarce resources

=> Explanation ::

In Economics Scarcity Means In society They are unlimited Wants But At The Other Hand Resources Are Limited So Gap Of Between Those Is called Scarcity. So Satisfy Economic Wants Given Scarce Resources.

Q-45 :: ANSWER :: (D) Inelastic demand for business travel

=> Explanation ::

Business travel Is Necessary Travel so for That Demand For Business Travel Is Inelastic. It Means Change In The Price Of Ticket Does Not Change The Demand Of Business Travel so for that Airlines charge business travelers more than leisure travelers because there is more.

Q-46 :: ANSWER :: (B) Used clothing

=> Explanation ::

Computer Software, Basketballs And Bread Has Positive Income Elasticity Of Demand But Used Clothing Has A negative Inelasticity Of Demand. So Rising Income Drop The Demand For Used Clothing

Q- 47 :: ANSWER :: (D) Computer

=> Explanation ::

Income Elasticity Of Demand For Computer is positive it Means increase In Income Increase The Demand For Computer In The Market.