Question 1

Suppose the cross- elasticity of demand for two goods, domestic cheese and imported cheese, is positive. If the price of imported cheese falls, then quantity demanded will

Accepted Answer

A)  rise for domestic cheese and fall for imported cheese. 
B)  rise for both domestic and imported cheese. 
C)  fall for domestic cheese and rise for imported cheese. 
D)  fall for both domestic and imported cheese. 
E)  not enough information to answer this question. 
A)  rise for domestic cheese and fall for imported cheese. 
B)  rise for both domestic and imported cheese. 
C)  fall for domestic cheese and rise for imported cheese. 
D)  fall for both domestic and imported cheese. 
E)  not enough information to answer this question.

Question 2

If two goods, X and Y, have a positive cross- elasticity of demand, then we know that they

Accepted Answer

A)  each have a price elasticity greater than one. 
B)  are complements. 
C)  are substitutes. 
D)  are both inferior goods. 
E)  are both normal goods. 
A)  each have a price elasticity greater than one. 
B)  are complements. 
C)  are substitutes. 
D)  are both inferior goods. 
E)  are both normal goods.

Question 3

If a producer knew his product to be an inferior good and he also knew average household income was falling, he might

Accepted Answer

A)  close down, because inferior goods are the first to be eliminated from household budgets when income falls. 
B)  keep his output the same. 
C)  increase output because the demand for his product would rise. 
D)  cut output immediately because the demand for his product would surely fall. 
E)  decrease output because the demand for his product would rise. 
A)  close down, because inferior goods are the first to be eliminated from household budgets when income falls. 
B)  keep his output the same. 
C)  increase output because the demand for his product would rise. 
D)  cut output immediately because the demand for his product would surely fall. 
E)  decrease output because the demand for his product would rise.

Question 4

The elasticity of supply for a given commodity is calculated as

Accepted Answer

A)  $\frac{\text { perentage change inquantity supplied}}{\text { percentage change in average household income}}$ 
B)  $\frac{\text { percentage change in quantity gupplied of one good }}{\text { percentage change in average price of a different good}}$ 
C)  $\frac{\text {percentage change in quantity supplied }}{\text { perentage change in product price}}$ 
D)  $\frac{\text { percent change in product rice}}{\text { percentage change in quantity supplied}}$ 
E)  $\frac{\text {percentage change in quantity supplied }}{\text {percentage change in inputprices }}$ 
A)  $\frac{\text { perentage change inquantity supplied}}{\text { percentage change in average household income}}$ 
B)  $\frac{\text { percentage change in quantity gupplied of one good }}{\text { percentage change in average price of a different good}}$ 
C)  $\frac{\text {percentage change in quantity supplied }}{\text { perentage change in product price}}$ 
D)  $\frac{\text { percent change in product rice}}{\text { percentage change in quantity supplied}}$ 
E)  $\frac{\text {percentage change in quantity supplied }}{\text {percentage change in inputprices }}$

Suppose the cross- elasticity of demand for two goods, domestic cheese and imported cheese, is positive. If the price of imported cheese falls, then quantity demanded will

If two goods, X and Y, have a positive cross- elasticity of demand, then we know that they

If a producer knew his product to be an inferior good and he also knew average household income was falling, he might

The elasticity of supply for a given commodity is calculated as

Economic Issues and Concepts

Economic Theories, Data, and Graphs

Demand, Supply, and Price

Markets in Action

Consumer Behaviour

Producers in the Short Run

Producers in the Long Run

Competitive Markets

Monopoly, Cartels, and Price Discrimination

Imperfect Competition

Economic Efficiency and Public Policy

How Factor Markets Work

Labour Markets

Interest Rates and the Capital Market

Market Failures and Government Intervention

The Economics of Environmental Protection

Taxation and Public Expenditure

The Gains From International Trade

Trade Policy

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Exam 4: Elasticity

Suppose the cross- elasticity of demand for two goods, domestic cheese and imported cheese, is positive. If the price of imported cheese falls, then quantity demanded will

If two goods, X and Y, have a positive cross- elasticity of demand, then we know that they

If a producer knew his product to be an inferior good and he also knew average household income was falling, he might

The elasticity of supply for a given commodity is calculated as

Economic Issues and Concepts

Economic Theories, Data, and Graphs

Demand, Supply, and Price

Markets in Action

Consumer Behaviour

Producers in the Short Run

Producers in the Long Run

Competitive Markets

Monopoly, Cartels, and Price Discrimination

Imperfect Competition

Economic Efficiency and Public Policy

How Factor Markets Work

Labour Markets

Interest Rates and the Capital Market

Market Failures and Government Intervention

The Economics of Environmental Protection

Taxation and Public Expenditure

The Gains From International Trade

Trade Policy

Filters