Question 1

-Refer to Figure 5.5.Using the midpoint method,if the price of a gardenburger is increased from $6 to $8,the price elasticity of demand equals:

Accepted Answer

A) 0.024. 
B) 1.75. 
C) 1.9. 
D) 2.0. 
A) 0.024. 
B) 1.75. 
C) 1.9. 
D) 2.0.

Question 2

If the price elasticity of demand is .5 and the price elasticity of supply is 1,then a 9% increase in the demand for the product can be expected to increase the price by 6%.

Accepted Answer

A) True 
 B)False

Question 3

Price and total revenue are inversely related when demand is:

Accepted Answer

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

Question 4

Recall the Application regarding how the price elasticity of demand for gasoline varies over time.Based on the application,in the long run consumers have time respond to changes in price and the demand for gasoline is:

Accepted Answer

A) more elastic. 
B) inelastic. 
C) unit elastic. 
D) less elastic 
A) more elastic. 
B) inelastic. 
C) unit elastic. 
D) less elastic

Question 5

When Luna Hair Salon raised its hair cut prices by 10% because of an increase in rent cost,it lost a quarter of its customers.The price elasticity of demand for its hair cut is:

Accepted Answer

A) 4. 
B) 0.25. 
C) 0.4. 
D) 2.5. 
A) 4. 
B) 0.25. 
C) 0.4. 
D) 2.5.

Question 6

If the price elasticity of demand is exactly 1,then a decrease in the price will result in an increase in total revenue.

Accepted Answer

A) True 
 B)False

Question 7

How does one determine whether demand is elastic,inelastic,or unitary elastic?

Accepted Answer

If the price elasticity of dem

Question 8

If the price elasticity of demand for peanuts is 0.4,then the demand is inelastic.

Accepted Answer

A) True 
 B)False

Question 9

Last semester there were 5000 parking spaces available on campus.The price of a parking permit was $80 per semester,and the quantity demanded equaled the quantity supplied at this price.Suppose the number of parking spaces increases by 10% and the elasticity of demand for parking is 0.5.Parking Services should ________ the price of a permit by ________ to guarantee that quantity demanded will equal quantity supplied.

Accepted Answer

A) decrease;10% 
B) decrease;20% 
C) decrease;5% 
D) increase;10% 
A) decrease;10% 
B) decrease;20% 
C) decrease;5% 
D) increase;10%

Question 10

-Refer to Figure 5.2.Using the initial-value method,the value of the price elasticity of demand from point A to point B can be described as:

Accepted Answer

A) elastic. 
B) inelastic. 
C) unitary. 
D) zero. 
A) elastic. 
B) inelastic. 
C) unitary. 
D) zero.

Question 11

What does it mean for a good to have a perfectly elastic demand? Draw a demand curve of this type.Explain why it has the shape that it does.

Accepted Answer

If a product has a perfectly elastic dem

Question 12

The price elasticity of supply measures the responsiveness of the quantity supplied to changes in demand.

Accepted Answer

A) True 
 B)False

Question 13

The price elasticity of demand is constant along a downward-sloping linear demand curve.

Accepted Answer

A) True 
 B)False

Question 14

-Refer to Figure 5.6.The demand for milkshakes is unitary elastic at point C.If the price of a milkshake is reduced from   to   total revenue:

Accepted Answer

A) will increase. 
B) will decrease. 
C) will remain constant. 
D) could either increase or decrease. 
A) will increase. 
B) will decrease. 
C) will remain constant. 
D) could either increase or decrease.

Question 15

When the price of toothpaste increases by 15 percent,the quantity of toothpaste demanded falls by 30 percent.Calculate the price elasticity of demand.Is the demand for toothpaste elastic,inelastic,or unit elastic?

Accepted Answer

Price elasticity of demand = [

Question 16

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is increased from $6 to $8,the price elasticity of demand equals:

Accepted Answer

A) 0.7. 
B) 5.0. 
C) 1.0. 
D) 2.0. 
A) 0.7. 
B) 5.0. 
C) 1.0. 
D) 2.0.

Question 17

When the price of a car is $25,000,car sales are 10,000 per month.When the price of a car increases to $29,000,car sales fall to 8,000 per month.Using the initial-value method,the demand for cars is:

Accepted Answer

A) elastic. 
B) inelastic. 
C) unit elastic. 
D) It is not possible to say based on the data given. 
A) elastic. 
B) inelastic. 
C) unit elastic. 
D) It is not possible to say based on the data given.

Question 18

-Refer to Figure 5.4.The demand for tickets is:

Accepted Answer

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

Question 19

Suppose that a 5% increase in the price of gasoline leads to a 15% decrease in the quantity demanded of SUVs.The cross-price elasticity of demand for SUVs is:

Accepted Answer

A) 3.0. 
B) 3.3. 
C) .33. 
D) 33. 
A) 3.0. 
B) 3.3. 
C) .33. 
D) 33.

Question 20

Is demand more elastic in the short run or the long run? Why?

Accepted Answer

Demand is more elastic in the

-Refer to Figure 5.5.Using the midpoint method,if the price of a gardenburger is increased from $6 to $8,the price elasticity of demand equals:

If the price elasticity of demand is .5 and the price elasticity of supply is 1,then a 9% increase in the demand for the product can be expected to increase the price by 6%.

Price and total revenue are inversely related when demand is:

Recall the Application regarding how the price elasticity of demand for gasoline varies over time.Based on the application,in the long run consumers have time respond to changes in price and the demand for gasoline is:

When Luna Hair Salon raised its hair cut prices by 10% because of an increase in rent cost,it lost a quarter of its customers.The price elasticity of demand for its hair cut is:

If the price elasticity of demand is exactly 1,then a decrease in the price will result in an increase in total revenue.

How does one determine whether demand is elastic,inelastic,or unitary elastic?

If the price elasticity of demand for peanuts is 0.4,then the demand is inelastic.

-Refer to Figure 5.2.Using the initial-value method,the value of the price elasticity of demand from point A to point B can be described as:

What does it mean for a good to have a perfectly elastic demand? Draw a demand curve of this type.Explain why it has the shape that it does.

The price elasticity of supply measures the responsiveness of the quantity supplied to changes in demand.

The price elasticity of demand is constant along a downward-sloping linear demand curve.

-Refer to Figure 5.6.The demand for milkshakes is unitary elastic at point C.If the price of a milkshake is reduced from to total revenue:

When the price of toothpaste increases by 15 percent,the quantity of toothpaste demanded falls by 30 percent.Calculate the price elasticity of demand.Is the demand for toothpaste elastic,inelastic,or unit elastic?

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is increased from $6 to $8,the price elasticity of demand equals:

When the price of a car is $25,000,car sales are 10,000 per month.When the price of a car increases to $29,000,car sales fall to 8,000 per month.Using the initial-value method,the demand for cars is:

-Refer to Figure 5.4.The demand for tickets is:

Suppose that a 5% increase in the price of gasoline leads to a 15% decrease in the quantity demanded of SUVs.The cross-price elasticity of demand for SUVs is:

Is demand more elastic in the short run or the long run? Why?

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

-Refer to Figure 5.5.Using the midpoint method,if the price of a gardenburger is increased from $6 to $8,the price elasticity of demand equals:

If the price elasticity of demand is .5 and the price elasticity of supply is 1,then a 9% increase in the demand for the product can be expected to increase the price by 6%.

Price and total revenue are inversely related when demand is:

Recall the Application regarding how the price elasticity of demand for gasoline varies over time.Based on the application,in the long run consumers have time respond to changes in price and the demand for gasoline is:

When Luna Hair Salon raised its hair cut prices by 10% because of an increase in rent cost,it lost a quarter of its customers.The price elasticity of demand for its hair cut is:

If the price elasticity of demand is exactly 1,then a decrease in the price will result in an increase in total revenue.

How does one determine whether demand is elastic,inelastic,or unitary elastic?

If the price elasticity of demand for peanuts is 0.4,then the demand is inelastic.

-Refer to Figure 5.2.Using the initial-value method,the value of the price elasticity of demand from point A to point B can be described as:

What does it mean for a good to have a perfectly elastic demand? Draw a demand curve of this type.Explain why it has the shape that it does.

The price elasticity of supply measures the responsiveness of the quantity supplied to changes in demand.

The price elasticity of demand is constant along a downward-sloping linear demand curve.

-Refer to Figure 5.6.The demand for milkshakes is unitary elastic at point C.If the price of a milkshake is reduced from to total revenue:

When the price of toothpaste increases by 15 percent,the quantity of toothpaste demanded falls by 30 percent.Calculate the price elasticity of demand.Is the demand for toothpaste elastic,inelastic,or unit elastic?

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is increased from $6 to $8,the price elasticity of demand equals:

When the price of a car is $25,000,car sales are 10,000 per month.When the price of a car increases to $29,000,car sales fall to 8,000 per month.Using the initial-value method,the demand for cars is:

-Refer to Figure 5.4.The demand for tickets is:

Suppose that a 5% increase in the price of gasoline leads to a 15% decrease in the quantity demanded of SUVs.The cross-price elasticity of demand for SUVs is:

Is demand more elastic in the short run or the long run? Why?

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