Question 1

The general term elasticity refers to a relationship between

Accepted Answer

A) quantity demanded and price only 
B) quantity supplied and price only 
C) quantity supplied or demanded and price only 
D) quantity supplied or demanded and anything other than price 
E) percentage changes in any two variables 
A) quantity demanded and price only 
B) quantity supplied and price only 
C) quantity supplied or demanded and price only 
D) quantity supplied or demanded and anything other than price 
E) percentage changes in any two variables

Question 2

If demand is elastic, a decrease in price leads to a decrease in total revenue.

Accepted Answer

A) True 
 B)False

Question 3

Exhibit 5-17   Consider Exhibit 5-17.Demand curves D1, D2 and D3 represent the demand for food, apples and fruit.Which represents which?

Accepted Answer

A) D1 is apples, D2 is fruit and D3 is food 
B) D1 is fruit, D2 is food and D3 is apples 
C) D1 is food, D2 is apples and D3 is food 
D) D1 is food, D2 is fruit and D3 is apples 
E) impossible to tell without more information 
A) D1 is apples, D2 is fruit and D3 is food 
B) D1 is fruit, D2 is food and D3 is apples 
C) D1 is food, D2 is apples and D3 is food 
D) D1 is food, D2 is fruit and D3 is apples 
E) impossible to tell without more information

Question 4

If the cross-price elasticity of demand between good x and good y is 0.4, then

Accepted Answer

A) the demand for good x is highly responsive to changes in the price of good y 
B) a 10 percent increase in the price of good y leads to a 0.4 percent increase in the quantity demanded of good x 
C) a 10 percent decrease in the price of good y leads to a 4 percent decrease in the demand for good y 
D) good x and good y are complements 
E) good x is a normal good and good y is an inferior good 
A) the demand for good x is highly responsive to changes in the price of good y 
B) a 10 percent increase in the price of good y leads to a 0.4 percent increase in the quantity demanded of good x 
C) a 10 percent decrease in the price of good y leads to a 4 percent decrease in the demand for good y 
D) good x and good y are complements 
E) good x is a normal good and good y is an inferior good

The general term elasticity refers to a relationship between

If demand is elastic, a decrease in price leads to a decrease in total revenue.

Exhibit 5-17 Consider Exhibit 5-17.Demand curves D₁, D₂ and D₃ represent the demand for food, apples and fruit.Which represents which?

If the cross-price elasticity of demand between good x and good y is 0.4, then

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

Exam 5: Elasticity of Demand and Supply

The general term elasticity refers to a relationship between

If demand is elastic, a decrease in price leads to a decrease in total revenue.

Exhibit 5-17 Consider Exhibit 5-17.Demand curves D1, D2 and D3 represent the demand for food, apples and fruit.Which represents which?

If the cross-price elasticity of demand between good x and good y is 0.4, then

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

Exhibit 5-17 Consider Exhibit 5-17.Demand curves D₁, D₂ and D₃ represent the demand for food, apples and fruit.Which represents which?