Question 1

The elasticity of demand is constant along a downward sloping straight-line demand curve.

Accepted Answer

A) True 
 B)False

Question 2

Freezing temperatures in California have sharply reduced the supply of oranges in the U.S. You predict that the price of oranges will ________, and the more elastic the demand for oranges, the ________ will be the effect on the price.

Accepted Answer

A)  fall; smaller 
B)  fall; greater 
C)  rise; smaller 
D)  rise; greater 
A)  fall; smaller 
B)  fall; greater 
C)  rise; smaller 
D)  rise; greater

Question 3

What is the price elasticity of demand and how is it measured?

Accepted Answer

The price elasticity of demand is a unit

Question 4

The demand for ________ is more elastic than the demand for ________.

Accepted Answer

A)  chewing gum; cars 
B)  gasoline; professional services 
C)  all soft beverages; lemonade 
D)  motor vehicles; food 
A)  chewing gum; cars 
B)  gasoline; professional services 
C)  all soft beverages; lemonade 
D)  motor vehicles; food

Question 5

The price elasticity of demand for corn is 0.4. A new hybrid of corn is discovered and all farmers start to use it, which increases the quantity of corn they can produce from each acre. What happens to the farmers' total revenue?

Accepted Answer

A)  The total revenue will increase. 
B)  The total revenue will decrease. 
C)  The total revenue will not change. 
D)  There is not enough information to determine what happens to the total revenue. 
A)  The total revenue will increase. 
B)  The total revenue will decrease. 
C)  The total revenue will not change. 
D)  There is not enough information to determine what happens to the total revenue.

Question 6

-The increase in the demand for widgets, shown in the figure above, is the result of an increase in people's incomes from $28,500 per year to $31,500 per year. Therefore, the income elasticity of demand for widgets is

Accepted Answer

A)  0.25. 
B)  0.75. 
C)  1.33. 
D)  4.00. 
A)  0.25. 
B)  0.75. 
C)  1.33. 
D)  4.00.

Question 7

The price elasticity of demand for a specific model of a luxury car is likely to be

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  0. 
D)  infinite. 
A)  elastic. 
B)  inelastic. 
C)  0. 
D)  infinite.

Question 8

-The figure illustrates Anne's demand for books. At ________ a book, Anne's demand for books is inelastic.

Accepted Answer

A)  all prices between $15 and $30 
B)  all prices between $10 and $15 
C)  all prices between $10 and $20 
D)  all prices below $30 
A)  all prices between $15 and $30 
B)  all prices between $10 and $15 
C)  all prices between $10 and $20 
D)  all prices below $30

Question 9

A university conducts a survey of students, which shows that a 10 percent tuition hike would lead to a 7 percent decrease in the enrollment. If the university wants to increase its total revenue, it should ________ tuition because the demand for education at this university is ________.

Accepted Answer

A)  raise; elastic 
B)  not raise; elastic 
C)  raise; inelastic 
D)  not raise; inelastic 
A)  raise; elastic 
B)  not raise; elastic 
C)  raise; inelastic 
D)  not raise; inelastic

Question 10

-In the figure above, when the price of a disk is $B, total revenue is shown in the graph by area

Accepted Answer

A)  BCF0. 
B)  AGF0. 
C)  FCDE. 
D)  ADE0. 
A)  BCF0. 
B)  AGF0. 
C)  FCDE. 
D)  ADE0.

Question 11

-The above table gives the demand schedule for Billy Bob's BBQ ribs. The price elasticity of demand for Billy Bob's ribs over the price range of $3 to $1 is equal to

Accepted Answer

A)  4.00. 
B)  2.00. 
C)  0.50. 
D)  0.25. 
A)  4.00. 
B)  2.00. 
C)  0.50. 
D)  0.25.

Question 12

One year, the government boosted regulated taxi fares in New York City by 15 percent with the expectation that the total revenue from taxi rides would also increase by 15 percent. The taxi commission that authorized this fare increase must have believed that the demand for taxi service was

Accepted Answer

A)  elastic, but not perfectly elastic. 
B)  inelastic, but not perfectly inelastic. 
C)  unit elastic. 
D)  perfectly inelastic. 
A)  elastic, but not perfectly elastic. 
B)  inelastic, but not perfectly inelastic. 
C)  unit elastic. 
D)  perfectly inelastic.

Question 13

Based on the following pieces of information, which fast food product do consumers see as the closest substitute for Wendy's Hamburgers?

Accepted Answer

A)  Kentucky Fried Chicken, which has a cross elasticity of 1.70 with Wendy's 
B)  McDonald's hamburgers, which have a cross elasticity of 1.01 with Wendy's 
C)  Pizza Hut pizza, which has a cross elasticity of zero with Wendy's 
D)  Taco Bell tacos, which have a cross elasticity of -1.25 with Wendy's 
A)  Kentucky Fried Chicken, which has a cross elasticity of 1.70 with Wendy's 
B)  McDonald's hamburgers, which have a cross elasticity of 1.01 with Wendy's 
C)  Pizza Hut pizza, which has a cross elasticity of zero with Wendy's 
D)  Taco Bell tacos, which have a cross elasticity of -1.25 with Wendy's

The elasticity of demand is constant along a downward sloping straight-line demand curve.

Freezing temperatures in California have sharply reduced the supply of oranges in the U.S. You predict that the price of oranges will , and the more elastic the demand for oranges, the will be the effect on the price.

What is the price elasticity of demand and how is it measured?

The demand for is more elastic than the demand for .

The price elasticity of demand for corn is 0.4. A new hybrid of corn is discovered and all farmers start to use it, which increases the quantity of corn they can produce from each acre. What happens to the farmers' total revenue?

-The increase in the demand for widgets, shown in the figure above, is the result of an increase in people's incomes from $28,500 per year to $31,500 per year. Therefore, the income elasticity of demand for widgets is

The price elasticity of demand for a specific model of a luxury car is likely to be

-The figure illustrates Anne's demand for books. At ________ a book, Anne's demand for books is inelastic.

A university conducts a survey of students, which shows that a 10 percent tuition hike would lead to a 7 percent decrease in the enrollment. If the university wants to increase its total revenue, it should tuition because the demand for education at this university is .

-In the figure above, when the price of a disk is $B, total revenue is shown in the graph by area

-The above table gives the demand schedule for Billy Bob's BBQ ribs. The price elasticity of demand for Billy Bob's ribs over the price range of $3 to $1 is equal to

One year, the government boosted regulated taxi fares in New York City by 15 percent with the expectation that the total revenue from taxi rides would also increase by 15 percent. The taxi commission that authorized this fare increase must have believed that the demand for taxi service was

Based on the following pieces of information, which fast food product do consumers see as the closest substitute for Wendy's Hamburgers?

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

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

Exam 4: Elasticity

The elasticity of demand is constant along a downward sloping straight-line demand curve.

Freezing temperatures in California have sharply reduced the supply of oranges in the U.S. You predict that the price of oranges will ________, and the more elastic the demand for oranges, the ________ will be the effect on the price.

What is the price elasticity of demand and how is it measured?

The demand for ________ is more elastic than the demand for ________.

The price elasticity of demand for corn is 0.4. A new hybrid of corn is discovered and all farmers start to use it, which increases the quantity of corn they can produce from each acre. What happens to the farmers' total revenue?

-The increase in the demand for widgets, shown in the figure above, is the result of an increase in people's incomes from $28,500 per year to $31,500 per year. Therefore, the income elasticity of demand for widgets is

The price elasticity of demand for a specific model of a luxury car is likely to be

-The figure illustrates Anne's demand for books. At ________ a book, Anne's demand for books is inelastic.

A university conducts a survey of students, which shows that a 10 percent tuition hike would lead to a 7 percent decrease in the enrollment. If the university wants to increase its total revenue, it should ________ tuition because the demand for education at this university is ________.

-In the figure above, when the price of a disk is $B, total revenue is shown in the graph by area

-The above table gives the demand schedule for Billy Bob's BBQ ribs. The price elasticity of demand for Billy Bob's ribs over the price range of $3 to $1 is equal to

One year, the government boosted regulated taxi fares in New York City by 15 percent with the expectation that the total revenue from taxi rides would also increase by 15 percent. The taxi commission that authorized this fare increase must have believed that the demand for taxi service was

Based on the following pieces of information, which fast food product do consumers see as the closest substitute for Wendy's Hamburgers?

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

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

Freezing temperatures in California have sharply reduced the supply of oranges in the U.S. You predict that the price of oranges will , and the more elastic the demand for oranges, the will be the effect on the price.

The demand for is more elastic than the demand for .

A university conducts a survey of students, which shows that a 10 percent tuition hike would lead to a 7 percent decrease in the enrollment. If the university wants to increase its total revenue, it should tuition because the demand for education at this university is .