Question 1

If the income elasticity of demand is 1.2,the good will be a(n):

Accepted Answer

A) complement good. 
B) substitute good. 
C) necessity good. 
D) inferior good. 
E) luxury good. 
A) complement good. 
B) substitute good. 
C) necessity good. 
D) inferior good. 
E) luxury good.

Question 2

Shawna wins the lottery and her income increases by 60%.She used to buy 10 pints of cottage cheese per month and now she buys 12 pints.Her income elasticity of demand for cottage cheese is ________,making it a(n)________ good.

Accepted Answer

A) 3; luxury 
B) 3.59; normal 
C) 0.33; necessity 
D) 0.28; inferior 
E) -0.33; inferior 
A) 3; luxury 
B) 3.59; normal 
C) 0.33; necessity 
D) 0.28; inferior 
E) -0.33; inferior

Question 3

A professional hockey arena has a maximum seating capacity of 20,000 people.The price elasticity of supply is:

Accepted Answer

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

Question 4

If the elasticity of demand for Good A is -3,a 33% decrease in quantity demanded of Good A results from a(n):

Accepted Answer

A) 99% decrease in the price of Good A. 
B) 99% increase in the price of Good A. 
C) 11% decrease in the price of Good A. 
D) 11% increase in the price of Good A. 
E) 33% decrease in the price of Good A. 
A) 99% decrease in the price of Good A. 
B) 99% increase in the price of Good A. 
C) 11% decrease in the price of Good A. 
D) 11% increase in the price of Good A. 
E) 33% decrease in the price of Good A.

Question 5

The introduction of new gaming systems that can compete effectively with the Nintendo console will make the demand for the Nintendo console become:

Accepted Answer

A) more price elastic. 
B) more price inelastic. 
C) perfectly price elastic. 
D) perfectly price inelastic. 
E) unchanged. 
A) more price elastic. 
B) more price inelastic. 
C) perfectly price elastic. 
D) perfectly price inelastic. 
E) unchanged.

Question 6

The government estimates that the demand curve for DVDs is represented by the equation
Qd = -5P + 20
a.Graph the demand curve.
b.Using prices of $2 and $3,determine the price elasticity of demand.

Accepted Answer

@#IMG-DLM& b.At price = $2,quantity dema

Question 7

If you know that the price elasticity of demand is:
a.-5,graph the demand curve.
b.-1/2,graph the demand curve.
c.infinite,graph the demand curve.

Accepted Answer

@#IMG-DLM& A price elasticity demand of -5 indicat

Question 8

If the income elasticity of demand is 0.5,the good will be a(n):

Accepted Answer

A) complement good. 
B) substitute good. 
C) necessity good. 
D) inferior good. 
E) luxury good. 
A) complement good. 
B) substitute good. 
C) necessity good. 
D) inferior good. 
E) luxury good.

Question 9

If the cross-price elasticity of demand between Good A and Good B is 3,the price of Good B increases,and the price elasticity of demand for Good B is inelastic,we can expect to see a ________ change in the quantity demanded for Good A:

Accepted Answer

A) positive,zero 
B) positive,small 
C) negative,infinite 
D) negative,one-for-one 
E) positive,large 
A) positive,zero 
B) positive,small 
C) negative,infinite 
D) negative,one-for-one 
E) positive,large

Question 10

Assume that the market for pencils is in equilibrium and that demand is very price elastic.The popularity of digital tablets and electronic pens increases and demand for pencils declines.The equilibrium change in quantity demanded is:

Accepted Answer

A) 0 (zero). 
B) relatively small. 
C) proportional to the shift in demand. 
D) relatively large. 
E) infinite. 
A) 0 (zero). 
B) relatively small. 
C) proportional to the shift in demand. 
D) relatively large. 
E) infinite.

Question 11

For which of the following products should sellers raise the price in order to increase total revenue from college students?

Accepted Answer

A) blue hooded sweatshirts 
B) Gatorade 
C) concert tickets 
D) textbooks 
E) spaghetti sauce 
A) blue hooded sweatshirts 
B) Gatorade 
C) concert tickets 
D) textbooks 
E) spaghetti sauce

Question 12

If the income elasticity of demand for laptops is 3.5,you know that laptops are a(n):

Accepted Answer

A) substitute good. 
B) inferior good. 
C) luxury good. 
D) necessity good. 
E) complement good. 
A) substitute good. 
B) inferior good. 
C) luxury good. 
D) necessity good. 
E) complement good.

Question 13

Zumba classes sell all 20 participant spots at a price of $4.50 each.When the instructor raised the prices to $5.50,10 people attended the class.From the midpoint method,the price elasticity of demand for Zumba is:

Accepted Answer

A) -0.50. 
B) -3.33. 
C) -2.50. 
D) 0.20. 
E) -0.20. 
A) -0.50. 
B) -3.33. 
C) -2.50. 
D) 0.20. 
E) -0.20.

Question 14

The government is exploring ways to increase revenues through taxation.You are an economic adviser to public policy makers,and they pose to you the following question: Should the government tax yachts or should it tax gasoline? Explain your answer using price elasticity of demand.

Accepted Answer

It is likely that yachts are a luxury go

Question 15

Suppose that the supply curve for televisions is linear and has a slope of 1.Graph the effect of the following on the supply curve and explain each:
a.The availability of inputs (LED screens and wires)for increases for televisions.
b.The time period of supply under consideration shortens to the upcoming week.

Accepted Answer

@#IMG-DLM& The increased availability of inputs al

Question 16

From the accompanying table,we would expect that,for recreational skaters,the price elasticity of demand for ice skates between $10 and $20 to be ________ than that of hockey players because ________.

Accepted Answer

A) more elastic; ice skates are a normal good 
B) less elastic; ice skates are an inferior good 
C) the same; they both skate 
D) more elastic; recreational skaters can substitute other activities 
E) less elastic; hockey players need skates 
A) more elastic; ice skates are a normal good 
B) less elastic; ice skates are an inferior good 
C) the same; they both skate 
D) more elastic; recreational skaters can substitute other activities 
E) less elastic; hockey players need skates

Question 17

When the price of a basketball is $15,the quantity supplied is 5,000.When the price increases to $20,the quantity supplied is 10,000.The price elasticity of supply is:

Accepted Answer

A) 2.33. 
B) 0.67. 
C) 0.33. 
D) 0.43. 
E) 0.29. 
A) 2.33. 
B) 0.67. 
C) 0.33. 
D) 0.43. 
E) 0.29.

Question 18

If the percentage change in the quantity consumed of pizza is 8% and the percentage change in income is 2%,what is the income elasticity of demand for pizza?

Accepted Answer

A) -0.25 
B) 4 
C) 0.25 
D) -4 
E) -1 
A) -0.25 
B) 4 
C) 0.25 
D) -4 
E) -1

Question 19

When the price of erasers increases from $1.50 to $2.50,the quantity demanded of pencils is unchanged.The cross-price elasticity of demand between erasers and pencils is ________ because erasers and pencils ________.

Accepted Answer

A) 1; are substitutes 
B) 1/2; are complements 
C) 0; are normal goods 
D) 0; are unrelated 
E) -1/2; are complements 
A) 1; are substitutes 
B) 1/2; are complements 
C) 0; are normal goods 
D) 0; are unrelated 
E) -1/2; are complements

Question 20

If the cross-price elasticity of demand is -5,Good A and Good B are:

Accepted Answer

A) inferior goods. 
B) complements. 
C) substitutes. 
D) normal goods. 
E) luxury goods. 
A) inferior goods. 
B) complements. 
C) substitutes. 
D) normal goods. 
E) luxury goods.

If the income elasticity of demand is 1.2,the good will be a(n):

Shawna wins the lottery and her income increases by 60%.She used to buy 10 pints of cottage cheese per month and now she buys 12 pints.Her income elasticity of demand for cottage cheese is ,making it a(n) good.

A professional hockey arena has a maximum seating capacity of 20,000 people.The price elasticity of supply is:

If the elasticity of demand for Good A is -3,a 33% decrease in quantity demanded of Good A results from a(n):

The introduction of new gaming systems that can compete effectively with the Nintendo console will make the demand for the Nintendo console become:

The government estimates that the demand curve for DVDs is represented by the equation Q_d = -5P + 20 a.Graph the demand curve. b.Using prices of $2 and $3,determine the price elasticity of demand.

If you know that the price elasticity of demand is: a.-5,graph the demand curve. b.-1/2,graph the demand curve. c.infinite,graph the demand curve.

If the income elasticity of demand is 0.5,the good will be a(n):

If the cross-price elasticity of demand between Good A and Good B is 3,the price of Good B increases,and the price elasticity of demand for Good B is inelastic,we can expect to see a ________ change in the quantity demanded for Good A:

Assume that the market for pencils is in equilibrium and that demand is very price elastic.The popularity of digital tablets and electronic pens increases and demand for pencils declines.The equilibrium change in quantity demanded is:

For which of the following products should sellers raise the price in order to increase total revenue from college students?

If the income elasticity of demand for laptops is 3.5,you know that laptops are a(n):

Zumba classes sell all 20 participant spots at a price of $4.50 each.When the instructor raised the prices to $5.50,10 people attended the class.From the midpoint method,the price elasticity of demand for Zumba is:

The government is exploring ways to increase revenues through taxation.You are an economic adviser to public policy makers,and they pose to you the following question: Should the government tax yachts or should it tax gasoline? Explain your answer using price elasticity of demand.

From the accompanying table,we would expect that,for recreational skaters,the price elasticity of demand for ice skates between $10 and $20 to be than that of hockey players because .

When the price of a basketball is $15,the quantity supplied is 5,000.When the price increases to $20,the quantity supplied is 10,000.The price elasticity of supply is:

If the percentage change in the quantity consumed of pizza is 8% and the percentage change in income is 2%,what is the income elasticity of demand for pizza?

When the price of erasers increases from $1.50 to $2.50,the quantity demanded of pencils is unchanged.The cross-price elasticity of demand between erasers and pencils is because erasers and pencils .

If the cross-price elasticity of demand is -5,Good A and Good B are:

The Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters

Exam 4: Elasticity

If the income elasticity of demand is 1.2,the good will be a(n):

Shawna wins the lottery and her income increases by 60%.She used to buy 10 pints of cottage cheese per month and now she buys 12 pints.Her income elasticity of demand for cottage cheese is ________,making it a(n)________ good.

A professional hockey arena has a maximum seating capacity of 20,000 people.The price elasticity of supply is:

If the elasticity of demand for Good A is -3,a 33% decrease in quantity demanded of Good A results from a(n):

The introduction of new gaming systems that can compete effectively with the Nintendo console will make the demand for the Nintendo console become:

The government estimates that the demand curve for DVDs is represented by the equation Qd = -5P + 20 a.Graph the demand curve. b.Using prices of $2 and $3,determine the price elasticity of demand.

If you know that the price elasticity of demand is: a.-5,graph the demand curve. b.-1/2,graph the demand curve. c.infinite,graph the demand curve.

If the income elasticity of demand is 0.5,the good will be a(n):

If the cross-price elasticity of demand between Good A and Good B is 3,the price of Good B increases,and the price elasticity of demand for Good B is inelastic,we can expect to see a ________ change in the quantity demanded for Good A:

Assume that the market for pencils is in equilibrium and that demand is very price elastic.The popularity of digital tablets and electronic pens increases and demand for pencils declines.The equilibrium change in quantity demanded is:

For which of the following products should sellers raise the price in order to increase total revenue from college students?

If the income elasticity of demand for laptops is 3.5,you know that laptops are a(n):

Zumba classes sell all 20 participant spots at a price of $4.50 each.When the instructor raised the prices to $5.50,10 people attended the class.From the midpoint method,the price elasticity of demand for Zumba is:

The government is exploring ways to increase revenues through taxation.You are an economic adviser to public policy makers,and they pose to you the following question: Should the government tax yachts or should it tax gasoline? Explain your answer using price elasticity of demand.

From the accompanying table,we would expect that,for recreational skaters,the price elasticity of demand for ice skates between $10 and $20 to be ________ than that of hockey players because ________.

When the price of a basketball is $15,the quantity supplied is 5,000.When the price increases to $20,the quantity supplied is 10,000.The price elasticity of supply is:

If the percentage change in the quantity consumed of pizza is 8% and the percentage change in income is 2%,what is the income elasticity of demand for pizza?

When the price of erasers increases from $1.50 to $2.50,the quantity demanded of pencils is unchanged.The cross-price elasticity of demand between erasers and pencils is ________ because erasers and pencils ________.

If the cross-price elasticity of demand is -5,Good A and Good B are:

The Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters

Shawna wins the lottery and her income increases by 60%.She used to buy 10 pints of cottage cheese per month and now she buys 12 pints.Her income elasticity of demand for cottage cheese is ,making it a(n) good.

The government estimates that the demand curve for DVDs is represented by the equation Q_d = -5P + 20 a.Graph the demand curve. b.Using prices of $2 and $3,determine the price elasticity of demand.

From the accompanying table,we would expect that,for recreational skaters,the price elasticity of demand for ice skates between $10 and $20 to be than that of hockey players because .

When the price of erasers increases from $1.50 to $2.50,the quantity demanded of pencils is unchanged.The cross-price elasticity of demand between erasers and pencils is because erasers and pencils .