Question 1

When demand is inelastic,

Accepted Answer

A) quantity sold does not increase when price decreases. 
B) selling one more unit of output causes marginal revenue to increase. 
C) selling one more unit of output cause total revenue to increase. 
D) buyers are not very responsive to changes in the price of the product. 
E) the percentage change in quantity demanded will exceed the percentage change in price (in absolute value). 
A) quantity sold does not increase when price decreases. 
B) selling one more unit of output causes marginal revenue to increase. 
C) selling one more unit of output cause total revenue to increase. 
D) buyers are not very responsive to changes in the price of the product. 
E) the percentage change in quantity demanded will exceed the percentage change in price (in absolute value). D

Question 2

When demand is elastic,

Accepted Answer

A) marginal revenue is negative. 
B) the percentage change in price exceeds the percentage change in quantity. 
C) an increase in price causes total revenue to rise. 
D) both b and c 
E) none of the above 
A) marginal revenue is negative. 
B) the percentage change in price exceeds the percentage change in quantity. 
C) an increase in price causes total revenue to rise. 
D) both b and c 
E) none of the above E

Question 3

Consider the statement: "When the British government tripled university fees for foreign students in Great Britain,about one-half of them left to study in other countries." This move will ___________ university revenues from foreign students in Great Britain.

Accepted Answer

A) decrease 
B) not change 
C) increase 
D) cannot determine without further information 
A) decrease 
B) not change 
C) increase 
D) cannot determine without further information C

Question 4

Suppose that the Houston Rockets' management is considering a plan in which fans who donate blood can attend games for $35 instead of the usual $50.If both ticket revenues and blood donations rise with this plan,which of the following is true?

Accepted Answer

A) The demand for Houston Rockets' tickets is price elastic. 
B) The demand for Houston Rockets' tickets is price inelastic. 
C) The demand for blood donations is price elastic. 
D) The demand for blood donations is price inelastic. 
A) The demand for Houston Rockets' tickets is price elastic. 
B) The demand for Houston Rockets' tickets is price inelastic. 
C) The demand for blood donations is price elastic. 
D) The demand for blood donations is price inelastic.

Question 5

Refer to the following graph to answer the question:   Suppose price rises from $90 to $110.Using representative arrows,the quantity effect is a relatively ________ (short,long)arrow pointing _______ (upward,downward).

Accepted Answer

A) short; upward 
B) short; downward 
C) long; upward 
D) long; downward 
A) short; upward 
B) short; downward 
C) long; upward 
D) long; downward

Question 6

To answer the question,refer to the following table showing a demand schedule:   If price falls from $200 to $150,what is the elasticity of demand over this range?

Accepted Answer

A) -0.62 
B) -1.0 
C) -1.17 
D) -2.5 
E) -3.0 
A) -0.62 
B) -1.0 
C) -1.17 
D) -2.5 
E) -3.0

Question 7

the demand for umbrellas is price inelastic,

Accepted Answer

A) changes in price do not affect the number of umbrellas demanded. 
B) if more umbrellas are sold as the result of a price decrease,total expenditures by consumers on umbrellas will decrease. 
C) the percentage change in price is less than the percentage change in quantity demanded. 
D) the percentage change in quantity demanded is greater than the percentage change in price. 
E) none of the above 
A) changes in price do not affect the number of umbrellas demanded. 
B) if more umbrellas are sold as the result of a price decrease,total expenditures by consumers on umbrellas will decrease. 
C) the percentage change in price is less than the percentage change in quantity demanded. 
D) the percentage change in quantity demanded is greater than the percentage change in price. 
E) none of the above

Question 8

Consider the statement: "When the British government tripled university fees for foreign students in Great Britain,about one-half of them left to study in other countries." The implied price elasticity of demand by foreigners for a British education is (in absolute value)

Accepted Answer

A) less than 1. 
B) equal to 1. 
C) between 1.0 and 1.5. 
D) greater than 1.5. 
A) less than 1. 
B) equal to 1. 
C) between 1.0 and 1.5. 
D) greater than 1.5.

Question 9

Refer to the following figure.What is the equation for marginal revenue?

Accepted Answer

A) MR = 4,000 - 0.005P 
B) MR = 4,000- 200Q 
C) MR = 4,000- 200P 
D) MR = 20 - 0.01Q 
E) MR = 20 -200Q 
A) MR = 4,000 - 0.005P 
B) MR = 4,000- 200Q 
C) MR = 4,000- 200P 
D) MR = 20 - 0.01Q 
E) MR = 20 -200Q

Question 10

In the figure above,if price INCREASES from $40 to $60,an arrow representing the PRICE effect

Accepted Answer

A) will point upward. 
B) will point downward. 
C) will be longer than (and in opposite direction of)the arrow representing the quantity effect. 
D) will be shorter than (and in the opposite direction of)the arrow representing the quantity effect. 
E) both a and c 
A) will point upward. 
B) will point downward. 
C) will be longer than (and in opposite direction of)the arrow representing the quantity effect. 
D) will be shorter than (and in the opposite direction of)the arrow representing the quantity effect. 
E) both a and c

Question 11

The demand for good X will be more elastic than the demand for good Y when

Accepted Answer

A) good X has fewer substitutes than good Y. 
B) good X accounts for a larger percentage of a typical consumer's budget than good Y. 
C) consumers have more time to adjust to a change in the price of good X than they have time to adjust to a change in the price of good Y. 
D) both b and c 
E) all of the above 
A) good X has fewer substitutes than good Y. 
B) good X accounts for a larger percentage of a typical consumer's budget than good Y. 
C) consumers have more time to adjust to a change in the price of good X than they have time to adjust to a change in the price of good Y. 
D) both b and c 
E) all of the above

Question 12

Which of the following would tend to INCREASE the elasticity of demand for good X?

Accepted Answer

A) a new discovery allows firms to produce X at a much lower cost. 
B) the percent of a consumer's income spent on good X declines. 
C) a new product,Y,which can be used in place of X,is introduced. 
D) both b and c 
E) all of the above 
A) a new discovery allows firms to produce X at a much lower cost. 
B) the percent of a consumer's income spent on good X declines. 
C) a new product,Y,which can be used in place of X,is introduced. 
D) both b and c 
E) all of the above

Question 13

Use the figure below to calculate the cross-price elasticity of demand for good X when the price of good Y increases from $12 to $14:

Accepted Answer

A) 0.64 
B) 0.42 
C) 0.20 
D) 2.00 
E) 15.38   
A) 0.64 
B) 0.42 
C) 0.20 
D) 2.00 
E) 15.38

Question 14

In the figure above,what is the point price elasticity of demand when price is $80?

Accepted Answer

A) -0.50 
B) -0.75 
C) -1.00 
D) -1.60 
E) -2.00 
A) -0.50 
B) -0.75 
C) -1.00 
D) -1.60 
E) -2.00

Question 15

In the figure above,if price INCREASES from $60 to $80,an arrow representing the PRICE effect

Accepted Answer

A) will point upward. 
B) will point downward. 
C) will be longer than (and in opposite direction of)the arrow representing the quantity effect. 
D) will be shorter than (and in the opposite direction of)the arrow representing the quantity effect. 
E) both a and d 
A) will point upward. 
B) will point downward. 
C) will be longer than (and in opposite direction of)the arrow representing the quantity effect. 
D) will be shorter than (and in the opposite direction of)the arrow representing the quantity effect. 
E) both a and d

Question 16

To answer the question,refer to the following table showing a demand schedule: $\begin{array}{llcc}
\underline{  \text {Price  } }&\underline{ \text { Ouantity } } \
 &\underline{\text {demanded  }} \
\$200 &1000\
150&1400\
100 &1800\
\end{array}$
 As output increases from 1,000 to 1,400 what is marginal revenue?

Accepted Answer

A) $25 
B) $50 
C) -$400 
D) -$25 
E) -$75 
A) $25 
B) $50 
C) -$400 
D) -$25 
E) -$75

Question 17

When marginal revenue is zero,

Accepted Answer

A) P < MR. 
B) P = MR. 
C) a small increase in price causes no change in total revenue. 
D) a small decrease in price causes no change in total revenue. 
E) both c and d 
A) P < MR. 
B) P = MR. 
C) a small increase in price causes no change in total revenue. 
D) a small decrease in price causes no change in total revenue. 
E) both c and d

Question 18

According to the following figure,the equation for marginal revenue is

Accepted Answer

A) MR = 50 - 0.025Q. 
B) MR = 4,000 - 2,000Q. 
C) MR = 4,000 - 100Q. 
D) MR = 50 - 160Q. 
E) none of the above 
A) MR = 50 - 0.025Q. 
B) MR = 4,000 - 2,000Q. 
C) MR = 4,000 - 100Q. 
D) MR = 50 - 160Q. 
E) none of the above

Question 19

the figure below,which shows a linear demand curve and the associated total revenue curve,to answer the question.   The marginal revenue of the 100th unit is $_____.

Accepted Answer

A) 0 
B) 20 
C) 40 
D) 50 
E) cannot tell from the information provided 
A) 0 
B) 20 
C) 40 
D) 50 
E) cannot tell from the information provided

Question 20

The cross-price elasticity of demand between goods X and Y

Accepted Answer

A) measures the responsiveness of the quantity of X demanded to changes in the price of Y. 
B) is the percentage change in the price of Y divided by the percentage change in the quantity of X demanded. 
C) is greater than zero if X and Y are substitutes. 
D) both a and c 
E) all of the above 
A) measures the responsiveness of the quantity of X demanded to changes in the price of Y. 
B) is the percentage change in the price of Y divided by the percentage change in the quantity of X demanded. 
C) is greater than zero if X and Y are substitutes. 
D) both a and c 
E) all of the above

When demand is inelastic,

When demand is elastic,

Consider the statement: "When the British government tripled university fees for foreign students in Great Britain,about one-half of them left to study in other countries." This move will ___________ university revenues from foreign students in Great Britain.

Suppose that the Houston Rockets' management is considering a plan in which fans who donate blood can attend games for $35 instead of the usual $50.If both ticket revenues and blood donations rise with this plan,which of the following is true?

Refer to the following graph to answer the question: Suppose price rises from $90 to $110.Using representative arrows,the quantity effect is a relatively __ (short,long)arrow pointing _ (upward,downward).

To answer the question,refer to the following table showing a demand schedule: If price falls from $200 to $150,what is the elasticity of demand over this range?

the demand for umbrellas is price inelastic,

Consider the statement: "When the British government tripled university fees for foreign students in Great Britain,about one-half of them left to study in other countries." The implied price elasticity of demand by foreigners for a British education is (in absolute value)

Refer to the following figure.What is the equation for marginal revenue?

In the figure above,if price INCREASES from $40 to $60,an arrow representing the PRICE effect

The demand for good X will be more elastic than the demand for good Y when

Which of the following would tend to INCREASE the elasticity of demand for good X?

Use the figure below to calculate the cross-price elasticity of demand for good X when the price of good Y increases from $12 to $14:

In the figure above,what is the point price elasticity of demand when price is $80?

In the figure above,if price INCREASES from $60 to $80,an arrow representing the PRICE effect

To answer the question,refer to the following table showing a demand schedule: \2 00 1000 150 1400 100 1800 As output increases from 1,000 to 1,400 what is marginal revenue?

When marginal revenue is zero,

According to the following figure,the equation for marginal revenue is

the figure below,which shows a linear demand curve and the associated total revenue curve,to answer the question. The marginal revenue of the 100^th unit is $_____.

The cross-price elasticity of demand between goods X and Y

Managers,profits,and Markets

Demand,supply,and Market Equilibrium

Marginal Analysis for Optimal Decisions

Basic Estimation Techniques

Theory of Consumer Behavior

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

Exam 6: Elasticity and Demand

When demand is inelastic,

When demand is elastic,

Consider the statement: "When the British government tripled university fees for foreign students in Great Britain,about one-half of them left to study in other countries." This move will ___________ university revenues from foreign students in Great Britain.

Suppose that the Houston Rockets' management is considering a plan in which fans who donate blood can attend games for $35 instead of the usual $50.If both ticket revenues and blood donations rise with this plan,which of the following is true?

Refer to the following graph to answer the question: Suppose price rises from $90 to $110.Using representative arrows,the quantity effect is a relatively ________ (short,long)arrow pointing _______ (upward,downward).

To answer the question,refer to the following table showing a demand schedule: If price falls from $200 to $150,what is the elasticity of demand over this range?

the demand for umbrellas is price inelastic,

Consider the statement: "When the British government tripled university fees for foreign students in Great Britain,about one-half of them left to study in other countries." The implied price elasticity of demand by foreigners for a British education is (in absolute value)

Refer to the following figure.What is the equation for marginal revenue?

In the figure above,if price INCREASES from $40 to $60,an arrow representing the PRICE effect

The demand for good X will be more elastic than the demand for good Y when

Which of the following would tend to INCREASE the elasticity of demand for good X?

Use the figure below to calculate the cross-price elasticity of demand for good X when the price of good Y increases from $12 to $14:

In the figure above,what is the point price elasticity of demand when price is $80?

In the figure above,if price INCREASES from $60 to $80,an arrow representing the PRICE effect

To answer the question,refer to the following table showing a demand schedule: \2 00 1000 150 1400 100 1800 As output increases from 1,000 to 1,400 what is marginal revenue?

When marginal revenue is zero,

According to the following figure,the equation for marginal revenue is

the figure below,which shows a linear demand curve and the associated total revenue curve,to answer the question. The marginal revenue of the 100th unit is $_____.

The cross-price elasticity of demand between goods X and Y

Managers,profits,and Markets

Demand,supply,and Market Equilibrium

Marginal Analysis for Optimal Decisions

Basic Estimation Techniques

Theory of Consumer Behavior

Demand Estimation and Forecasting

Production and Cost in the Short Run

Production and Cost in the Long Run

Production and Cost Estimation

Managerial Decisions in Competitive Markets

Managerial Decisions for Firms With Market Power

Strategic Decision Making in Oligopoly Markets

Advanced Pricing Techniques

Decisions Under Risk and Uncertainty

Government Regulation of Business

Filters

Refer to the following graph to answer the question: Suppose price rises from $90 to $110.Using representative arrows,the quantity effect is a relatively __ (short,long)arrow pointing _ (upward,downward).

the figure below,which shows a linear demand curve and the associated total revenue curve,to answer the question. The marginal revenue of the 100^th unit is $_____.