Question 1

The price elasticity of demand is measured by dividing the percentage change in quantity demanded by the percentage change in price.

Accepted Answer

A) True 
 B)False  True

Question 2

The price elasticity of demand for bagels is 1.7 and the price elasticity of supply of bagels is 2.0.If the demand for bagels rises by 30%,what will happen to the price of bagels?

Accepted Answer

percentage change in price = [30]/[1.7 + 2.0] = [30]/[3.7] = 8.1.
The price of bagels will rise by 8.1%.

Question 3

If the supply curve is a vertical line,then supply is perfectly elastic.

Accepted Answer

A) True 
 B)False  False

Question 4

If the demand for a product is perfectly elastic,then which of the following is most likely to be FALSE?

Accepted Answer

A) The product has many substitutes. 
B) The demand curve for the good is horizontal. 
C) The price elasticity of demand for that product is infinity. 
D) None of the above is false. 
A) The product has many substitutes. 
B) The demand curve for the good is horizontal. 
C) The price elasticity of demand for that product is infinity. 
D) None of the above is false.

Question 5

The more substitutes there are for a product:

Accepted Answer

A) the less price elastic the demand for the product is. 
B) the more price elastic the demand for the product is. 
C) the greater the income elasticity for the product. 
D) the smaller the income elasticity for the product. 
A) the less price elastic the demand for the product is. 
B) the more price elastic the demand for the product is. 
C) the greater the income elasticity for the product. 
D) the smaller the income elasticity for the product.

Question 6

When the price of charcoal grills increases,total revenue increases for charcoal grill retailers.From this information,we can conclude that:

Accepted Answer

A) the law of demand does not hold. 
B) the demand for charcoal grills is inelastic. 
C) the supply of charcoal grills is inelastic. 
D) corporations are greedy. 
A) the law of demand does not hold. 
B) the demand for charcoal grills is inelastic. 
C) the supply of charcoal grills is inelastic. 
D) corporations are greedy.

Question 7

Comment on the following statement: "Elasticity is constant along a straight-line demand curve."

Accepted Answer

The statement is false.While the slope i

Question 8

Good X and good Y are substitutes if the:

Accepted Answer

A) income elasticity of each is negative. 
B) income elasticity of each is positive. 
C) cross-price elasticity is negative. 
D) cross-price elasticity is positive. 
A) income elasticity of each is negative. 
B) income elasticity of each is positive. 
C) cross-price elasticity is negative. 
D) cross-price elasticity is positive.

Question 9

An increase in supply caused no change in the equilibrium quantity bought and sold.Thus,demand must be:

Accepted Answer

A) perfectly inelastic. 
B) horizontal. 
C) elastic. 
D) unitary elastic. 
A) perfectly inelastic. 
B) horizontal. 
C) elastic. 
D) unitary elastic.

Question 10

A perfectly elastic supply curve is a horizontal line.

Accepted Answer

A) True 
 B)False

Question 11

If the elasticity of supply is .5,then a 10% decrease in price will result in a 5% increase in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 12

The income elasticity of demand for popcorn is -1.1.Therefore,if income increases,the demand for popcorn will increase.

Accepted Answer

A) True 
 B)False

Question 13

A medicine such as insulin would most likely have a price elasticity of demand:

Accepted Answer

A) equal to one. 
B) close to zero. 
C) greater than one in absolute value. 
D) close to infinity. 
A) equal to one. 
B) close to zero. 
C) greater than one in absolute value. 
D) close to infinity.

Question 14

If demand for a good is elastic and price rises,total revenue will fall.

Accepted Answer

A) True 
 B)False

Question 15

The price elasticity of supply for hotdogs is 1.2 and the price elasticity of demand of hotdogs is 2.0.If the demand for hotdogs rises by 20%,what will happen to the price of hotdogs?

Accepted Answer

percentage change in price = [

Question 16

If the price of laptop computers decreases from $550 to $500 and the quantity supplied decreases from 15,000 to 12,000 per week.Using the initial price method the price elasticity of supply is:

Accepted Answer

A) 1.2. 
B) 2.2. 
C) .2. 
D) 2. 
A) 1.2. 
B) 2.2. 
C) .2. 
D) 2.

Question 17

If the demand for pineapples is unit elastic,the value of the price elasticity of demand for pineapples is:

Accepted Answer

A) 20. 
B) 2.0. 
C) 10.0. 
D) 1.0. 
A) 20. 
B) 2.0. 
C) 10.0. 
D) 1.0.

Question 18

Suppose that a coffee shop faces a demand curve that is liner and that the current price for its cup of coffee is set at a point where the price elasticity is 1.2.If the local dry cleaner shop increases the price per garment:

Accepted Answer

A) the demand becomes more elastic and the total revenue decreases. 
B) the demand becomes less elastic and the total revenue decreases. 
C) the demand becomes less elastic and the total revenue increases. 
D) the demand becomes more elastic and the total revenue increases. 
A) the demand becomes more elastic and the total revenue decreases. 
B) the demand becomes less elastic and the total revenue decreases. 
C) the demand becomes less elastic and the total revenue increases. 
D) the demand becomes more elastic and the total revenue increases.

Question 19

The short run price elasticity of demand for gasoline is 0.5,and the long run price elasticity of demand for gasoline is 1.1.Demand for gasoline is ________ in the short run and ________ in the long run.

Accepted Answer

A) elastic;inelastic 
B) inelastic;elastic 
C) elastic;unitarily elastic 
D) inelastic;unitarily inelastic 
A) elastic;inelastic 
B) inelastic;elastic 
C) elastic;unitarily elastic 
D) inelastic;unitarily inelastic

Question 20

If the demand for horse race tickets is inelastic,then as the price of horse race tickets increases,quantity demanded of horse race tickets will ________ and total revenue will ________.

Accepted Answer

A) decrease significantly;increase 
B) decrease slightly;increase 
C) increase slightly;decrease 
D) increase significantly;decrease 
A) decrease significantly;increase 
B) decrease slightly;increase 
C) increase slightly;decrease 
D) increase significantly;decrease

The price elasticity of demand is measured by dividing the percentage change in quantity demanded by the percentage change in price.

The price elasticity of demand for bagels is 1.7 and the price elasticity of supply of bagels is 2.0.If the demand for bagels rises by 30%,what will happen to the price of bagels?

If the supply curve is a vertical line,then supply is perfectly elastic.

If the demand for a product is perfectly elastic,then which of the following is most likely to be FALSE?

The more substitutes there are for a product:

When the price of charcoal grills increases,total revenue increases for charcoal grill retailers.From this information,we can conclude that:

Comment on the following statement: "Elasticity is constant along a straight-line demand curve."

Good X and good Y are substitutes if the:

An increase in supply caused no change in the equilibrium quantity bought and sold.Thus,demand must be:

A perfectly elastic supply curve is a horizontal line.

If the elasticity of supply is .5,then a 10% decrease in price will result in a 5% increase in quantity supplied.

The income elasticity of demand for popcorn is -1.1.Therefore,if income increases,the demand for popcorn will increase.

A medicine such as insulin would most likely have a price elasticity of demand:

If demand for a good is elastic and price rises,total revenue will fall.

The price elasticity of supply for hotdogs is 1.2 and the price elasticity of demand of hotdogs is 2.0.If the demand for hotdogs rises by 20%,what will happen to the price of hotdogs?

If the price of laptop computers decreases from $550 to $500 and the quantity supplied decreases from 15,000 to 12,000 per week.Using the initial price method the price elasticity of supply is:

If the demand for pineapples is unit elastic,the value of the price elasticity of demand for pineapples is:

Suppose that a coffee shop faces a demand curve that is liner and that the current price for its cup of coffee is set at a point where the price elasticity is 1.2.If the local dry cleaner shop increases the price per garment:

The short run price elasticity of demand for gasoline is 0.5,and the long run price elasticity of demand for gasoline is 1.1.Demand for gasoline is in the short run and in the long run.

If the demand for horse race tickets is inelastic,then as the price of horse race tickets increases,quantity demanded of horse race tickets will and total revenue will .

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 5: Elasticity: a Measure of Responsiveness

The price elasticity of demand is measured by dividing the percentage change in quantity demanded by the percentage change in price.

The price elasticity of demand for bagels is 1.7 and the price elasticity of supply of bagels is 2.0.If the demand for bagels rises by 30%,what will happen to the price of bagels?

If the supply curve is a vertical line,then supply is perfectly elastic.

If the demand for a product is perfectly elastic,then which of the following is most likely to be FALSE?

The more substitutes there are for a product:

When the price of charcoal grills increases,total revenue increases for charcoal grill retailers.From this information,we can conclude that:

Comment on the following statement: "Elasticity is constant along a straight-line demand curve."

Good X and good Y are substitutes if the:

An increase in supply caused no change in the equilibrium quantity bought and sold.Thus,demand must be:

A perfectly elastic supply curve is a horizontal line.

If the elasticity of supply is .5,then a 10% decrease in price will result in a 5% increase in quantity supplied.

The income elasticity of demand for popcorn is -1.1.Therefore,if income increases,the demand for popcorn will increase.

A medicine such as insulin would most likely have a price elasticity of demand:

If demand for a good is elastic and price rises,total revenue will fall.

The price elasticity of supply for hotdogs is 1.2 and the price elasticity of demand of hotdogs is 2.0.If the demand for hotdogs rises by 20%,what will happen to the price of hotdogs?

If the price of laptop computers decreases from $550 to $500 and the quantity supplied decreases from 15,000 to 12,000 per week.Using the initial price method the price elasticity of supply is:

If the demand for pineapples is unit elastic,the value of the price elasticity of demand for pineapples is:

Suppose that a coffee shop faces a demand curve that is liner and that the current price for its cup of coffee is set at a point where the price elasticity is 1.2.If the local dry cleaner shop increases the price per garment:

The short run price elasticity of demand for gasoline is 0.5,and the long run price elasticity of demand for gasoline is 1.1.Demand for gasoline is ________ in the short run and ________ in the long run.

If the demand for horse race tickets is inelastic,then as the price of horse race tickets increases,quantity demanded of horse race tickets will ________ and total revenue will ________.

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

The short run price elasticity of demand for gasoline is 0.5,and the long run price elasticity of demand for gasoline is 1.1.Demand for gasoline is in the short run and in the long run.

If the demand for horse race tickets is inelastic,then as the price of horse race tickets increases,quantity demanded of horse race tickets will and total revenue will .