Question 1

If the demand for golf is price inelastic and your local public golf course increases the greens fees for using the course, you would expect:

Accepted Answer

A)  a decrease in total revenue received by the course. 
B)  an increase in total revenue received by the course. 
C)  an increase in the amount of golf played on the course. 
D)  no change in the amount of golf played on the course. 
A)  a decrease in total revenue received by the course. 
B)  an increase in total revenue received by the course. 
C)  an increase in the amount of golf played on the course. 
D)  no change in the amount of golf played on the course.

Question 2

If the income elasticity of demand for a good is positive, the good is said to be a(n):

Accepted Answer

A)  inferior good. 
B)  substitute good. 
C)  normal good. 
D)  positive good. 
A)  inferior good. 
B)  substitute good. 
C)  normal good. 
D)  positive good.

Question 3

If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when your income increases from $19,000 to $21,000 a year, then, for you, shoes are considered a(n):

Accepted Answer

A)  normal good. 
B)  inferior good. 
C)  complementary good. 
D)  substitute good. 
A)  normal good. 
B)  inferior good. 
C)  complementary good. 
D)  substitute good.

Question 4

The Demand for Bungalow Bob's Bagels
  
-(Exhibit: The Demand for Bungalow Bob's Bagels) Demand is price elastic between:

Accepted Answer

A)  $0.30 and $0.40. 
B)  $0.40 and $0.50. 
C)  $0.50 and $0.60. 
D)  $0.60 and $0.70. 
A)  $0.30 and $0.40. 
B)  $0.40 and $0.50. 
C)  $0.50 and $0.60. 
D)  $0.60 and $0.70.

Question 5

-(Exhibit: Demand and Price Elasticity 2) The demand curve going from point D to E:

Accepted Answer

A)  is price inelastic. 
B)  is price elastic. 
C)  has a slope of +1. 
D)  has a slope of -2. 
A)  is price inelastic. 
B)  is price elastic. 
C)  has a slope of +1. 
D)  has a slope of -2.

Question 6

An upward movement along a linear demand curve from lower prices to higher prices will result in:

Accepted Answer

A)  constant price elasticity. 
B)  lower price elasticity. 
C)  increasing price elasticity. 
D)  unit price elasticity along the entire curve. 
A)  constant price elasticity. 
B)  lower price elasticity. 
C)  increasing price elasticity. 
D)  unit price elasticity along the entire curve.

Question 7

Based on the determinants of the price elasticity of demand, discuss the relative price elasticity of demand for sugar, carrots, agricultural output in general, ballpoint pens, Rolex watches, and porterhouse steaks.

Accepted Answer

The price elasticity of demand for sugar

Question 8

The price elasticity of supply measures:

Accepted Answer

A)  the response of a supply shift to changes in technology. 
B)  how much supply changes when the prices of inputs change. 
C)  the responsiveness of quantity supplied to changes in prices. 
D)  all of the above. 
A)  the response of a supply shift to changes in technology. 
B)  how much supply changes when the prices of inputs change. 
C)  the responsiveness of quantity supplied to changes in prices. 
D)  all of the above.

Question 9

Suppose at a price of $10 the quantity demanded is 100. When price falls to $8, the quantity demanded increases to 130. The price elasticity of demand between the prices of $10 and $8 is approximately:

Accepted Answer

A)  -1.17. 
B)  -1.50. 
C)  -0.85. 
D)  -1.00. 
A)  -1.17. 
B)  -1.50. 
C)  -0.85. 
D)  -1.00.

Question 10

The slope of a line is another method of measuring elasticity.

Accepted Answer

A) True 
 B)False

Question 11

A linear demand curve will have a price elasticity of demand whose absolute value:

Accepted Answer

A)  increases as price decreases. 
B)  decreases as price decreases. 
C)  is constant. 
D)  is -1 at all prices. 
A)  increases as price decreases. 
B)  decreases as price decreases. 
C)  is constant. 
D)  is -1 at all prices.

Question 12

Assuming a linear demand curve, lower prices would result in:

Accepted Answer

A)  less price elastic demand. 
B)  more price elastic demand. 
C)  an increase in demand. 
D)  none of the above. 
A)  less price elastic demand. 
B)  more price elastic demand. 
C)  an increase in demand. 
D)  none of the above.

Question 13

The terms elastic and inelastic apply to and are used to describe:

Accepted Answer

A)  price elasticity of demand. 
B)  income elasticity of demand. 
C)  cross price elasticity of demand. 
D)  all of the above. 
A)  price elasticity of demand. 
B)  income elasticity of demand. 
C)  cross price elasticity of demand. 
D)  all of the above.

Question 14

If your income increases and your consumption of bagels increases, bagels are considered a(n):

Accepted Answer

A)  negative good. 
B)  positive good. 
C)  inferior good. 
D)  normal good. 
A)  negative good. 
B)  positive good. 
C)  inferior good. 
D)  normal good.

Question 15

If the price elasticity of supply is greater than 1, then:

Accepted Answer

A)  supply is price elastic. 
B)  supply is price inelastic. 
C)  supply is unit price elastic. 
D)  quantity supplied is relatively unresponsive to price changes. 
A)  supply is price elastic. 
B)  supply is price inelastic. 
C)  supply is unit price elastic. 
D)  quantity supplied is relatively unresponsive to price changes.

Question 16

Supply curves tend to be more ________ the greater the time period facing the producer.

Accepted Answer

A)  price inelastic 
B)  price elastic 
C)  steeply sloped 
D)  inflexible 
A)  price inelastic 
B)  price elastic 
C)  steeply sloped 
D)  inflexible

Question 17

The percentage change in quantity demanded divided by the percentage change in income, all other things unchanged, is:

Accepted Answer

A)  price elasticity of demand. 
B)  quantity elasticity of demand. 
C)  income elasticity of demand. 
D)  cross price elasticity of demand. 
A)  price elasticity of demand. 
B)  quantity elasticity of demand. 
C)  income elasticity of demand. 
D)  cross price elasticity of demand.

Question 18

According to the Case in Point on Stop Lights, Professors Bar-Ilan and Sacerdote concluded that the response to increased fines:

Accepted Answer

A)  was larger for drivers under the age of 30 than for those over 30. 
B)  was larger for drivers over the age of 30 than for those under 30. 
C)  was roughly equal for drivers under the age of 30 and for those over 30. 
D)  could not be measured for drivers of different age groups. 
A)  was larger for drivers under the age of 30 than for those over 30. 
B)  was larger for drivers over the age of 30 than for those under 30. 
C)  was roughly equal for drivers under the age of 30 and for those over 30. 
D)  could not be measured for drivers of different age groups.

Question 19

If the income elasticity of demand for a good is negative, the good is said to be a(n):

Accepted Answer

A)  inferior good. 
B)  negative good. 
C)  positive good. 
D)  normal good. 
A)  inferior good. 
B)  negative good. 
C)  positive good. 
D)  normal good.

Question 20

If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when your income increases from $19,000 to $21,000 a year, then your income elasticity of demand for shoes is:

Accepted Answer

A)  2. 
B)  -0.67. 
C)  0. 
D)  0.67. 
A)  2. 
B)  -0.67. 
C)  0. 
D)  0.67.

Exam 5: Elasticity

If the demand for golf is price inelastic and your local public golf course increases the greens fees for using the course, you would expect:

If the income elasticity of demand for a good is positive, the good is said to be a(n):

If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when your income increases from $19,000 to $21,000 a year, then, for you, shoes are considered a(n):

The Demand for Bungalow Bob's Bagels -(Exhibit: The Demand for Bungalow Bob's Bagels) Demand is price elastic between:

-(Exhibit: Demand and Price Elasticity 2) The demand curve going from point D to E:

An upward movement along a linear demand curve from lower prices to higher prices will result in:

Based on the determinants of the price elasticity of demand, discuss the relative price elasticity of demand for sugar, carrots, agricultural output in general, ballpoint pens, Rolex watches, and porterhouse steaks.

The price elasticity of supply measures:

Suppose at a price of $10 the quantity demanded is 100. When price falls to $8, the quantity demanded increases to 130. The price elasticity of demand between the prices of $10 and $8 is approximately:

The slope of a line is another method of measuring elasticity.

A linear demand curve will have a price elasticity of demand whose absolute value:

Assuming a linear demand curve, lower prices would result in:

The terms elastic and inelastic apply to and are used to describe:

If your income increases and your consumption of bagels increases, bagels are considered a(n):

If the price elasticity of supply is greater than 1, then:

Supply curves tend to be more ________ the greater the time period facing the producer.

The percentage change in quantity demanded divided by the percentage change in income, all other things unchanged, is:

According to the Case in Point on Stop Lights, Professors Bar-Ilan and Sacerdote concluded that the response to increased fines:

If the income elasticity of demand for a good is negative, the good is said to be a(n):

If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when your income increases from $19,000 to $21,000 a year, then your income elasticity of demand for shoes is:

Welcome to Economics

Demand and Supply

Labor and Financial Markets

Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Information, Risk, and Insurance

Financial Markets

Public Economy

The Macroeconomic Perspective

Economic Growth

Unemployment

Inflation

The International Trade and Capital Flows

The Aggregate Demandaggregate Supply Model

The Keynesian Perspective

The Neoclassical Perspective

Money and Banking

Monetary Policy and Bank Regulation

Exchange Rates and International Capital Flows

Government Budgets and Fiscal Policy

The Impacts of Government Borrowing

Macroeconomic Policy Around the World

International Trade

Globalization and Protectionism

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