Table: Elasticity Characteristics \[\begin{array} { l l l } \hline \text { Good X } & \text { Good Y } & \text { Good Z } \\ \hline \text { Few Substitutes } & \text { Many Substitutes } & \text { Few Substitutes } \\ \text { Luxury good } & \text { Luxury good } & \text { Necessary good } \\ \text { Small part of budget } & \text { Large part of budget } & \text { Small part of budget } \\ \hline \end{array}\] The table lists the characteristics of three goods. Good ________ is the most inelastic, and Good ________ is the most elastic.

A) X; Y B) Z; Y C) X; Z D) Y; X A) X; Y B) Z; Y C) X; Z D) Y; X

Table: Elasticities \[\begin{array} { l llll } \hline { \text { I } } & \text { II } & \text { III } & \text { IV } \\ \hline \left| E _ { \mathrm { d } } \right| > 1 \text {, elastic } & \left| E _ { \mathrm { d } } \right| > 1 \text {, inelastic } & \left| E _ { \mathrm { d } } \right| > 1 \text {, unit elastic } &\left| E _ { \mathrm { d } } \right| > 1 \text {, elastic } \\ \left| E _ { \mathrm { d } } \right| < 1 \text {, inelastic } & \left| E _ { \mathrm { d } } \right| < 1 \text {, elastic } & \left| E _ { \mathrm { d } } \right| < 1 \text {, elastic } & \left| E _ { \mathrm { d } } \right| < 1 \text {, unit elastic } \\ \left| E _ { \mathrm { d } } \right| = 1 \text {, unit elastic } & \left| E _ { \mathrm { d } } \right| = 1 \text {, perfectly elastic } &\left| E _ { \mathrm { d } } \right| = 1 \text {, inelastic } & \left| E _ { \mathrm { d } } \right| = 1 \text {, inelastic } \\ \hline \end{array}\] Which column in the table is correct?

A) Column I B) Column II C) Column III D) Column IV A) Column I B) Column II C) Column III D) Column IV

Exam 5: Elasticity and Its Applications

Table: Elasticity Characteristics Good X Good Y Good Z Few Substitutes Many Substitutes Few Substitutes Luxury good Luxury good Necessary good Small part of budget Large part of budget Small part of budget The table lists the characteristics of three goods. Good is the most inelastic, and Good is the most elastic.

(Multiple Choice)

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Question 81

If demand is elastic, a price causes in total revenue.

(Multiple Choice)

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Question 82

Are there more substitutes for Cheerios or for cereal in general? For which good is demand more elastic?

(Multiple Choice)

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Question 83

Goods tend to be more elastic in the short run than in the long run.

(True/False)

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Question 84

Gun buyback programs will be less effective if the:

(Multiple Choice)

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Question 85

The supply curve for manufactured goods is usually more elastic than raw materials because production of manufactured goods can often be:

(Multiple Choice)

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Question 86

When the demand curve for a good is unit elastic, raising the price of the good by 25 percent will change the revenue of the firm by:

(Multiple Choice)

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Question 87

Why is the supply curve for oil rather inelastic?

(Multiple Choice)

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Question 88

Table: Elasticities I II III IV >1 , elastic >1 , inelastic >1 , unit elastic >1 , elastic <1 , inelastic <1 , elastic <1 , elastic <1 , unit elastic =1 , unit elastic =1 , perfectly elastic =1 , inelastic =1 , inelastic Which column in the table is correct?

(Multiple Choice)

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Question 89

Why is the demand curve for oil rather inelastic?

(Multiple Choice)

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Question 90

If the supply of a product is inelastic, a large price increase will:

(Multiple Choice)

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Question 91

The case for drilling oil in ANWR is strengthened when the:

(Multiple Choice)

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Question 92

Supply is more elastic if it is easy to expand production at a constant unit cost.

(True/False)

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Question 93

If the demand for a good is unit elastic, then:

(Multiple Choice)

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Question 94

The most important determinant of the elasticity of demand is the:

(Multiple Choice)

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Question 95

Which of the following statements is FALSE?

(Multiple Choice)

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Question 96

The midpoint method of calculating elasticity yields the same results as other methods.

(True/False)

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Question 97

The per-unit cost of producing Tic Tac candy does not change with increases in production, which means the:

(Multiple Choice)

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Question 98

U.S. Highway 12 is part of a crucial two-lane artery from the seaports in Washington State to the tar sands in Canada. Extracting oil from the tar sands requires very large equipment and transporting it takes up both lanes of U.S. Highway12. In August of 2010, Idaho granted ConocoPhilips a road permit that allowed it to transport four oil-processing units. Without this permit, ConocoPhilips would have had to transport those units a much longer distance to get them to their destination. If permits for this highway were not allowed, how would that affect the elasticity of which curve in the market for oil?

(Multiple Choice)

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Question 99

Suppose the price of a good rises from $10 to $20 and quantity demanded falls from 500 to 400. If you calculate the elasticity of demand WITHOUT using the midpoint method, the answer would be ___. If you calculate the elasticity of demand WITH the midpoint method, the answer would be _. Economists say ___ when calculating elasticity.

(Multiple Choice)

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Question 100

Exam 5: Elasticity and Its Applications

If demand is elastic, a price ________ causes ________ in total revenue.

Are there more substitutes for Cheerios or for cereal in general? For which good is demand more elastic?

Goods tend to be more elastic in the short run than in the long run.

Gun buyback programs will be less effective if the:

The supply curve for manufactured goods is usually more elastic than raw materials because production of manufactured goods can often be:

When the demand curve for a good is unit elastic, raising the price of the good by 25 percent will change the revenue of the firm by:

Why is the supply curve for oil rather inelastic?

Table: Elasticities I II III IV >1 , elastic >1 , inelastic >1 , unit elastic >1 , elastic <1 , inelastic <1 , elastic <1 , elastic <1 , unit elastic =1 , unit elastic =1 , perfectly elastic =1 , inelastic =1 , inelastic Which column in the table is correct?

Why is the demand curve for oil rather inelastic?

If the supply of a product is inelastic, a large price increase will:

The case for drilling oil in ANWR is strengthened when the:

Supply is more elastic if it is easy to expand production at a constant unit cost.

If the demand for a good is unit elastic, then:

The most important determinant of the elasticity of demand is the:

Which of the following statements is FALSE?

The midpoint method of calculating elasticity yields the same results as other methods.

The per-unit cost of producing Tic Tac candy does not change with increases in production, which means the:

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters

If demand is elastic, a price causes in total revenue.