Question

43) "The Department of Agriculture came out today with its prediction for food price next year-4 to 5 percent increases on top of this year's already steep gains... Eggs, dairy products and cereals are up 10 percent... But the USDA says another big part of the American diet has seen only moderate price increases. Beef, poultry and pork will be up only 3 percent this year." Suppose the price elasticity of demand for beef is elastic. Consumption would then
A) decrease by less than 3 percent.
B) increase by less than 3 percent.
C) decrease by greater than 3 percent.
D) increase by greater than 3 percent.
44) The vertical axis in a graph
A) is not used in a scatter diagram.
B) is named the y-axis.
C) has no origin.
0) is named the x-axis.

45) An outcome is considered efficient if
A) it is the best available choice for an individual.
B) it results in fair shares for everyone involved.
C) it is possible to make someone better off without making anyone else worse off.
D) it is not possible to make someone better off without making anyone else worse off.

46) Scarcity is represented on a production possibilities frontier figure by
A) technological progress.
B) the fact there are attainable and unattainable points.
C) the fact that there are only two goods in the diagram.
D) the amount of the good on the horizontal axis forgone.

Answer 1

43) C) decrease by greater than 3 percent.
(As demand is elastic so decrease in demand > increase in price.)

44) B) is named the y-axis.
(Vertical axis is the y axis and horizontal axis is the x axis.)

45) D) it is not possible to make someone better off without making anyone else worse off.
(It is efficient when people can't be made better off simultaneously.)

46) B) the fact there are attainable and unattainable points.
(Unattainable points shows they can't be produced because of scarce resources.)