AP (Advanced Placement) Macroeconomics: Questions 27 - 30 of 71

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Question 27

Question MCQ▾

If the price of corn rises 5 percent and the quantity demanded for corn falls 1 percent, then

Choices

Choice (5)Response

a.

and demand is price inelastic.

b.

and demand is price inelastic.

c.

and demand is price elastic.

d.

and demand is price elastic.

e.

and corn is a luxury good.

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Question 28

Question MCQ▾

A small business estimates price elasticity for the product to be 3. To raise total revenue, owners should

Choices

Choice (5)Response

a.

Increase price as demand is elastic.

b.

Decrease price as demand is inelastic.

c.

Do nothing; they are already maximizing total revenue.

d.

Increase price as demand is inelastic

e.

Decrease price as demand is elastic.

Edit

Question 29

Question MCQ▾

Elastic demand can be termed as

Choices

Choice (5)Response

a.

Unitary responsive.

b.

Very less responsive to the change in its price.

c.

Very high responsive to the change in its price.

d.

Cannot be determined.

e.

Fully unresponsive to the change in its price.

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Question 30

Question MCQ▾

The apple market is in equilibrium. Suppose we observe that apple growers are using more pesticides to increase apple production. At the same time, we hear that the price of pears, a substitute for apples, is rising. Which of the following is a reasonable prediction for the new price and quantity of apples?

Choices

Choice (5)Response

a.

Price rises, but quantity is ambiguous.

b.

Price is ambiguous, but quantity rises.

c.

Price falls, but quantity is ambiguous.

d.

Price is ambiguous, but quantity falls.

e.

None of the above

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