Question 1

Luxury goods tend to have income elasticities of demand that are

Accepted Answer

A) greater than 1. 
B) greater than zero but less than 1. 
C) less than the income elasticities of demand for necessities. 
D) negative. 
E) first positive and then negative as income increases. 
A) greater than 1. 
B) greater than zero but less than 1. 
C) less than the income elasticities of demand for necessities. 
D) negative. 
E) first positive and then negative as income increases.

Question 2

Use the table below to answer the following questions.
Table 4.1.1
Demand schedule for good A.  
-Refer to Table 4.1.1.The price elasticity of demand when the price is $6 is

Accepted Answer

A) 1.0. 
B) 2.0. 
C) 2.6. 
D) 0.5. 
E) 2,000. 
A) 1.0. 
B) 2.0. 
C) 2.6. 
D) 0.5. 
E) 2,000.

Question 3

The income elasticity of demand is largest for

Accepted Answer

A) food. 
B) clothing. 
C) shelter. 
D) used cars. 
E) luxury cars. 
A) food. 
B) clothing. 
C) shelter. 
D) used cars. 
E) luxury cars.

Question 4

A good has an income elasticity of +0.5.An increase in income from $15,000 to $25,000 will lead to a

Accepted Answer

A) 2.5 percent increase in the quantity demanded of the good. 
B) 5 percent increase in the quantity demanded of the good. 
C) 5 percent decrease in the quantity demanded of the good. 
D) 25 percent decrease in the quantity demanded of the good. 
E) 25 percent increase in the quantity demanded of the good. 
A) 2.5 percent increase in the quantity demanded of the good. 
B) 5 percent increase in the quantity demanded of the good. 
C) 5 percent decrease in the quantity demanded of the good. 
D) 25 percent decrease in the quantity demanded of the good. 
E) 25 percent increase in the quantity demanded of the good.

Question 5

This winter France had unusually cold weather.Next year's grape crop will be substantially reduced.Select the best statement.

Accepted Answer

A) The French wine supply increases as price rises. 
B) If the demand for French wine is elastic,wine producers experience an increase in total revenue. 
C) The initial change in the market creates a surplus of French wine. 
D) In the final equilibrium,price and quantity are higher. 
E) If the demand for French wine is inelastic,wine producers experience an increase in total revenue. 
A) The French wine supply increases as price rises. 
B) If the demand for French wine is elastic,wine producers experience an increase in total revenue. 
C) The initial change in the market creates a surplus of French wine. 
D) In the final equilibrium,price and quantity are higher. 
E) If the demand for French wine is inelastic,wine producers experience an increase in total revenue.

Question 6

If a 10 percent increase in income results in a 10 percent decrease in the consumption of widgets,then

Accepted Answer

A) the price elasticity of demand for widgets equals 1. 
B) the income elasticity of demand for widgets is negative. 
C) the income elasticity of demand for widgets equals 1. 
D) widgets are a normal good. 
E) the price elasticity of demand for widgets is negative. 
A) the price elasticity of demand for widgets equals 1. 
B) the income elasticity of demand for widgets is negative. 
C) the income elasticity of demand for widgets equals 1. 
D) widgets are a normal good. 
E) the price elasticity of demand for widgets is negative.

Question 7

Demand will be more elastic the

Accepted Answer

A) lower the price of the good. 
B) greater the quantity demanded of the good. 
C) longer the passage of time after a price increase. 
D) fewer substitutes for the good that are available. 
E) smaller the fraction of income spent on the good. 
A) lower the price of the good. 
B) greater the quantity demanded of the good. 
C) longer the passage of time after a price increase. 
D) fewer substitutes for the good that are available. 
E) smaller the fraction of income spent on the good.

Question 8

When Erika's income increases by 6 percent,her demand for tickets to professional hockey games increases by 3 percent.Erika's demand for tickets is income ________.For Erika,hockey tickets are ________ good.

Accepted Answer

A) elastic;a normal 
B) inelastic;an inferior 
C) elastic;an inferior 
D) inelastic;a normal 
E) inelastic;a normative 
A) elastic;a normal 
B) inelastic;an inferior 
C) elastic;an inferior 
D) inelastic;a normal 
E) inelastic;a normative

Question 9

If a 10 percent increase in price increases the quantity supplied by 18 percent,the elasticity of supply is

Accepted Answer

A) 0.3. 
B) 0.6. 
C) 1.2. 
D) 1.8. 
E) 9.0. 
A) 0.3. 
B) 0.6. 
C) 1.2. 
D) 1.8. 
E) 9.0.

Question 10

When the price of a t-shirt is $9,the quantity supplied is 9,500.When the price of a t-shirt is $11,the quantity supplied is 10,500.At the price of $10 a t-shirt,the

Accepted Answer

A) supply of t-shirts is elastic. 
B) supply of t-shirts is inelastic. 
C) supply of t-shirts is unit elastic. 
D) demand for t-shirts is elastic. 
E) supply of t-shirts is perfectly inelastic. 
A) supply of t-shirts is elastic. 
B) supply of t-shirts is inelastic. 
C) supply of t-shirts is unit elastic. 
D) demand for t-shirts is elastic. 
E) supply of t-shirts is perfectly inelastic.

Question 11

When the price of good A rises from $100 to $120 a unit,the quantity supplied increases from 10,000 to 12,000 units.The elasticity of supply at a price of $110 a unit is

Accepted Answer

A) 0.625. 
B) 0.8. 
C) 1.25. 
D) 0.2. 
E) 1.0. 
A) 0.625. 
B) 0.8. 
C) 1.25. 
D) 0.2. 
E) 1.0.

Question 12

When a good has a vertical demand curve,the price elasticity of demand for the good is

Accepted Answer

A) zero. 
B) greater than zero but less than 1. 
C) 1. 
D) greater than 1. 
E) negative. 
A) zero. 
B) greater than zero but less than 1. 
C) 1. 
D) greater than 1. 
E) negative.

Question 13

Figure 4.1.4
-Figure 4.1.4 shows the demand curve for pizza.What is the price elasticity of demand when the price of a pizza is $20?

Accepted Answer

A) 0.25 
B) 2.0 
C) 4.0 
D) 20 
E) 0.05 
A) 0.25 
B) 2.0 
C) 4.0 
D) 20 
E) 0.05

Question 14

Fred's income increases from $1,950 per week to $2,050 per week.As a result,he decides to increase the number of movies he attends each month by 10 percent.Fred's demand for movies is

Accepted Answer

A) price elastic. 
B) price inelastic. 
C) income elastic. 
D) income inelastic. 
E) income inferior. 
A) price elastic. 
B) price inelastic. 
C) income elastic. 
D) income inelastic. 
E) income inferior.

Question 15

In the market for farm crops,momentary supply is ________ and short-run supply is ________.

Accepted Answer

A) less elastic than short-run supply;less elastic than long-run supply 
B) more elastic than short-run supply;more elastic than long-run supply 
C) perfectly elastic;unit elastic 
D) unit elastic;perfectly elastic 
E) perfectly elastic;perfectly inelastic 
A) less elastic than short-run supply;less elastic than long-run supply 
B) more elastic than short-run supply;more elastic than long-run supply 
C) perfectly elastic;unit elastic 
D) unit elastic;perfectly elastic 
E) perfectly elastic;perfectly inelastic

Question 16

A negative value for

Accepted Answer

A) price elasticity of supply implies an upward-sloping supply curve. 
B) cross elasticity of demand implies that the goods are complements. 
C) price elasticity of demand implies an inferior good. 
D) income elasticity of demand implies a normal good. 
E) income elasticity of demand implies an error in your calculation. 
A) price elasticity of supply implies an upward-sloping supply curve. 
B) cross elasticity of demand implies that the goods are complements. 
C) price elasticity of demand implies an inferior good. 
D) income elasticity of demand implies a normal good. 
E) income elasticity of demand implies an error in your calculation.

Question 17

For which one of the following will demand be the most price elastic?

Accepted Answer

A) daily newspapers 
B) Ontario newspapers 
C) Toronto newspapers 
D) the Toronto Star 
E) Each of the above will exhibit the same price elasticity of demand. 
A) daily newspapers 
B) Ontario newspapers 
C) Toronto newspapers 
D) the Toronto Star 
E) Each of the above will exhibit the same price elasticity of demand.

Question 18

Suppose your annual income is $65,000 and you pay $30 a year for your favourite magazine.Your demand for the magazine is likely to be

Accepted Answer

A) perfectly elastic. 
B) inelastic. 
C) unit elastic. 
D) elastic. 
E) elastic - the same as your demand for all other goods. 
A) perfectly elastic. 
B) inelastic. 
C) unit elastic. 
D) elastic. 
E) elastic - the same as your demand for all other goods.

Question 19

All normal goods have

Accepted Answer

A) an income elasticity of demand greater than 1.0. 
B) a price elasticity of demand greater than 1.0. 
C) a negative price elasticity of demand. 
D) a positive income elasticity of demand. 
E) a negative cross elasticity of demand. 
A) an income elasticity of demand greater than 1.0. 
B) a price elasticity of demand greater than 1.0. 
C) a negative price elasticity of demand. 
D) a positive income elasticity of demand. 
E) a negative cross elasticity of demand.

Question 20

The price elasticity of demand depends on

Accepted Answer

A) the units used to measure price and the units used to measure quantity. 
B) the units used to measure price but not the units used to measure quantity. 
C) the units used to measure quantity but not the units used to measure price. 
D) neither the units used to measure price nor the units used to measure quantity. 
E) the relative price of the good. 
A) the units used to measure price and the units used to measure quantity. 
B) the units used to measure price but not the units used to measure quantity. 
C) the units used to measure quantity but not the units used to measure price. 
D) neither the units used to measure price nor the units used to measure quantity. 
E) the relative price of the good.

Luxury goods tend to have income elasticities of demand that are

Use the table below to answer the following questions. Table 4.1.1 Demand schedule for good A. -Refer to Table 4.1.1.The price elasticity of demand when the price is $6 is

The income elasticity of demand is largest for

A good has an income elasticity of +0.5.An increase in income from $15,000 to $25,000 will lead to a

This winter France had unusually cold weather.Next year's grape crop will be substantially reduced.Select the best statement.

If a 10 percent increase in income results in a 10 percent decrease in the consumption of widgets,then

Demand will be more elastic the

When Erika's income increases by 6 percent,her demand for tickets to professional hockey games increases by 3 percent.Erika's demand for tickets is income .For Erika,hockey tickets are good.

If a 10 percent increase in price increases the quantity supplied by 18 percent,the elasticity of supply is

When the price of a t-shirt is $9,the quantity supplied is 9,500.When the price of a t-shirt is $11,the quantity supplied is 10,500.At the price of $10 a t-shirt,the

When the price of good A rises from $100 to $120 a unit,the quantity supplied increases from 10,000 to 12,000 units.The elasticity of supply at a price of $110 a unit is

When a good has a vertical demand curve,the price elasticity of demand for the good is

Figure 4.1.4 -Figure 4.1.4 shows the demand curve for pizza.What is the price elasticity of demand when the price of a pizza is $20?

Fred's income increases from $1,950 per week to $2,050 per week.As a result,he decides to increase the number of movies he attends each month by 10 percent.Fred's demand for movies is

In the market for farm crops,momentary supply is and short-run supply is .

A negative value for

For which one of the following will demand be the most price elastic?

Suppose your annual income is $65,000 and you pay $30 a year for your favourite magazine.Your demand for the magazine is likely to be

All normal goods have

The price elasticity of demand depends on

What Is Economics

The Economic Problem

Demand and Supply

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 4: Elasticity

Luxury goods tend to have income elasticities of demand that are

Use the table below to answer the following questions. Table 4.1.1 Demand schedule for good A. -Refer to Table 4.1.1.The price elasticity of demand when the price is $6 is

The income elasticity of demand is largest for

A good has an income elasticity of +0.5.An increase in income from $15,000 to $25,000 will lead to a

This winter France had unusually cold weather.Next year's grape crop will be substantially reduced.Select the best statement.

If a 10 percent increase in income results in a 10 percent decrease in the consumption of widgets,then

Demand will be more elastic the

When Erika's income increases by 6 percent,her demand for tickets to professional hockey games increases by 3 percent.Erika's demand for tickets is income ________.For Erika,hockey tickets are ________ good.

If a 10 percent increase in price increases the quantity supplied by 18 percent,the elasticity of supply is

When the price of a t-shirt is $9,the quantity supplied is 9,500.When the price of a t-shirt is $11,the quantity supplied is 10,500.At the price of $10 a t-shirt,the

When the price of good A rises from $100 to $120 a unit,the quantity supplied increases from 10,000 to 12,000 units.The elasticity of supply at a price of $110 a unit is

When a good has a vertical demand curve,the price elasticity of demand for the good is

Figure 4.1.4 -Figure 4.1.4 shows the demand curve for pizza.What is the price elasticity of demand when the price of a pizza is $20?

Fred's income increases from $1,950 per week to $2,050 per week.As a result,he decides to increase the number of movies he attends each month by 10 percent.Fred's demand for movies is

In the market for farm crops,momentary supply is ________ and short-run supply is ________.

A negative value for

For which one of the following will demand be the most price elastic?

Suppose your annual income is $65,000 and you pay $30 a year for your favourite magazine.Your demand for the magazine is likely to be

All normal goods have

The price elasticity of demand depends on

What Is Economics

The Economic Problem

Demand and Supply

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

When Erika's income increases by 6 percent,her demand for tickets to professional hockey games increases by 3 percent.Erika's demand for tickets is income .For Erika,hockey tickets are good.

In the market for farm crops,momentary supply is and short-run supply is .