Question 1

The formula for the own-price elasticity of demand for a commodity can be written as which of the following?

Accepted Answer

The answer of The formula for the own-price elasticity of...

Question 2

When the percentage change in quantity demanded resulting from a price change is less than the percentage change in price, demand is said to be

Accepted Answer

A)  perfectly elastic 
B)  zero elastic. 
C)  unit elastic. 
D)  inelastic 
E)  elastic. 
A)  perfectly elastic 
B)  zero elastic. 
C)  unit elastic. 
D)  inelastic 
E)  elastic.

Question 3

The president of a major nickel-producing company says that an increase in the price of nickel would have no effect on the total amount spent on nickel. If this is true, the price elasticity of demand for nickel is

Accepted Answer

A)  not calculable from the information given. 
B)  infinitely elastic. 
C)  more than one. 
D)  less than zero. 
E)  exactly one. 
A)  not calculable from the information given. 
B)  infinitely elastic. 
C)  more than one. 
D)  less than zero. 
E)  exactly one.

Question 4

For which of the following pairs of products would we expect the cross-elasticity of demand to be negative?

Accepted Answer

A)  aceteminophen and ibuprofen 
B)  butter and margarine 
C)  iPhones and Blackberries 
D)  printers and toner cartridges 
E)  HD TVs and plasma TVs 
A)  aceteminophen and ibuprofen 
B)  butter and margarine 
C)  iPhones and Blackberries 
D)  printers and toner cartridges 
E)  HD TVs and plasma TVs

Question 5

Cross-price elasticity of demand may be defined as

Accepted Answer

The answer of Cross-price elasticity of demand may be defined...

Question 6

As the price for some product increases from $4.00 to $5.00 per unit, quantity demanded decreases from 400 to 300 units per month. For this segment of the demand curve, the price elasticity of demand is

Accepted Answer

A)  7. 
B)  9. 
C)  1. 
D)  9/7. 
E)  7/9. 
A)  7. 
B)  9. 
C)  1. 
D)  9/7. 
E)  7/9.

Question 7

If the demand for some good fluctuates, but supply is constant, then which of the following combinations would generally yield the greatest quantity fluctuations?

Accepted Answer

A)  large demand fluctuations and inelastic supply 
B)  small demand fluctuations and elastic supply 
C)  small demand fluctuations and unit elastic supply 
D)  small demand fluctuations and inelastic supply 
E)  large demand fluctuations and elastic supply 
A)  large demand fluctuations and inelastic supply 
B)  small demand fluctuations and elastic supply 
C)  small demand fluctuations and unit elastic supply 
D)  small demand fluctuations and inelastic supply 
E)  large demand fluctuations and elastic supply

Question 8

Which of the following illustrates elastic demand?

Accepted Answer

A)  A 10 percent increase in price causes a 5 percent decrease in quantity demanded. 
B)  A 10 percent increase in price causes a 10 percent reduction in quantity demanded. 
C)  A 10 percent increase in price causes a 20 percent decrease in quantity demanded. 
D)  a price elasticity of 0.8 
E)  a price elasticity of 1.0 
A)  A 10 percent increase in price causes a 5 percent decrease in quantity demanded. 
B)  A 10 percent increase in price causes a 10 percent reduction in quantity demanded. 
C)  A 10 percent increase in price causes a 20 percent decrease in quantity demanded. 
D)  a price elasticity of 0.8 
E)  a price elasticity of 1.0

Question 9

The price elasticity of demand measures the responsiveness of

Accepted Answer

A)  equilibrium changes 
B)  demand to supply changes. 
C)  the price to changes in quantity demanded. 
D)  supply to demand changes. 
E)  quantity demanded to changes in the price. 
A)  equilibrium changes 
B)  demand to supply changes. 
C)  the price to changes in quantity demanded. 
D)  supply to demand changes. 
E)  quantity demanded to changes in the price.

Question 10

If the total expenditure on automobiles increases when the price of automobiles rises, the priceelasticity of demand for automobiles is

Accepted Answer

A)  less than one (demand is inelastic). 
B)  not determinable from the information given. 
C)  greater than one (demand is elastic). 
D)  exactly zero. 
E)  equal to one (demand is unit elastic). 
A)  less than one (demand is inelastic). 
B)  not determinable from the information given. 
C)  greater than one (demand is elastic). 
D)  exactly zero. 
E)  equal to one (demand is unit elastic).

Question 11

If per capita income increases by 10 percent and household expenditure on fur coats increases by 15 percent, one can conclude that the price elasticity of demand for fur coats is

Accepted Answer

A)  elastic. 
B)  not determinable from the information given. 
C)  unity. 
D)  inelastic. 
E)  positive. 
A)  elastic. 
B)  not determinable from the information given. 
C)  unity. 
D)  inelastic. 
E)  positive.

Question 12

If the total expenditure on clothing decreases when the price of clothing falls, the price elasticity ofdemand is

Accepted Answer

A)  greater than one (demand is elastic). 
B)  not determinable from the information given. 
C)  less than one (demand is inelastic). 
D)  unity (demand is unit elastic). 
E)  exactly zero. 
A)  greater than one (demand is elastic). 
B)  not determinable from the information given. 
C)  less than one (demand is inelastic). 
D)  unity (demand is unit elastic). 
E)  exactly zero.

Question 13

Consider the following data for a hypothetical economy.   TABLE 4-5
-Refer to Table 4-5. The cross-price elasticity of demand for transit passes in terms of the price of gasoline is _. We can therefore conclude that these two goods are .

Accepted Answer

A)  0.5; substitutes 
B)  0.33; substitutes 
C)  0.2; substitutes 
D)  5.0; complements 
E)  0.2; complements 
A)  0.5; substitutes 
B)  0.33; substitutes 
C)  0.2; substitutes 
D)  5.0; complements 
E)  0.2; complements

Question 14

A value of zero for the elasticity of supply of some product implies that

Accepted Answer

A)  the supply curve is horizontal. 
B)  the product will not be supplied at any price. 
C)  there is no supply. 
D)  supply is highly responsive to price. 
E)  the supply curve is vertical. 
A)  the supply curve is horizontal. 
B)  the product will not be supplied at any price. 
C)  there is no supply. 
D)  supply is highly responsive to price. 
E)  the supply curve is vertical.

Question 15

Income elasticity measures the change in quantity demanded of some product with respect to changes in

Accepted Answer

A)  its price. 
B)  the demand of the product. 
C)  the price of another related product. 
D)  households' income. 
E)  the supply of the product. 
A)  its price. 
B)  the demand of the product. 
C)  the price of another related product. 
D)  households' income. 
E)  the supply of the product.

Question 16

For an inferior good, the quantity demanded

Accepted Answer

A)  responds directly to changes in income. 
B)  rises when income rises. 
C)  falls when income falls. 
D)  rises when income falls. 
E)  does not change when income rises or falls. 
A)  responds directly to changes in income. 
B)  rises when income rises. 
C)  falls when income falls. 
D)  rises when income falls. 
E)  does not change when income rises or falls.

Question 17

If the value of the price elasticity of demand is 0.6, demand is said to be

Accepted Answer

A)  inelastic. 
B)  partially inelastic. 
C)  somewhat inelastic. 
D)  partially elastic. 
E)  elastic. 
A)  inelastic. 
B)  partially inelastic. 
C)  somewhat inelastic. 
D)  partially elastic. 
E)  elastic.

Question 18

An increase in income will

Accepted Answer

A)  always increase the demand for SUVs. 
B)  increase the supply of SUVs. 
C)  increase the demand for SUVs if SUVs are inferior goods. 
D)  increase the demand for SUVs if SUVs are normal goods. 
E)  decrease the demand for SUVs if SUVs have a very low price. 
A)  always increase the demand for SUVs. 
B)  increase the supply of SUVs. 
C)  increase the demand for SUVs if SUVs are inferior goods. 
D)  increase the demand for SUVs if SUVs are normal goods. 
E)  decrease the demand for SUVs if SUVs have a very low price.

Question 19

Which of the following statements would you expect to be true about price elasticities of demand for T-shirts and clothing?

Accepted Answer

A)  Clothing has a higher price elasticity of demand because it is a necessity. 
B)  Clothing has a lower price elasticity of demand because it is more broadly defined. 
C)  Compared with clothing, T-shirts have a lower price elasticity of demand because they are specifically defined. 
D)  T-shirts would have the same price elasticity of demand as clothing. 
E)  Because T-shirts are clothing, but not all clothing is T-shirts, T-shirts would have a lower price elasticity of demand than clothing. 
A)  Clothing has a higher price elasticity of demand because it is a necessity. 
B)  Clothing has a lower price elasticity of demand because it is more broadly defined. 
C)  Compared with clothing, T-shirts have a lower price elasticity of demand because they are specifically defined. 
D)  T-shirts would have the same price elasticity of demand as clothing. 
E)  Because T-shirts are clothing, but not all clothing is T-shirts, T-shirts would have a lower price elasticity of demand than clothing.

Question 20

The table below shows the demand schedule for museum admissions in a small city.   TABLE 4-1
-Refer to Table 4-1. The elasticity of demand for museum admissions is

Accepted Answer

A)  inelastic at all points on the demand curve. 
B)  greater at lower prices than at higher prices. 
C)  elastic at all points on the demand curve. 
D)  constant at all points on the demand curve. 
E)  greater at higher prices than at lower prices. 
A)  inelastic at all points on the demand curve. 
B)  greater at lower prices than at higher prices. 
C)  elastic at all points on the demand curve. 
D)  constant at all points on the demand curve. 
E)  greater at higher prices than at lower prices.

The formula for the own-price elasticity of demand for a commodity can be written as which of the following?

When the percentage change in quantity demanded resulting from a price change is less than the percentage change in price, demand is said to be

The president of a major nickel-producing company says that an increase in the price of nickel would have no effect on the total amount spent on nickel. If this is true, the price elasticity of demand for nickel is

For which of the following pairs of products would we expect the cross-elasticity of demand to be negative?

Cross-price elasticity of demand may be defined as

As the price for some product increases from $4.00 to $5.00 per unit, quantity demanded decreases from 400 to 300 units per month. For this segment of the demand curve, the price elasticity of demand is

If the demand for some good fluctuates, but supply is constant, then which of the following combinations would generally yield the greatest quantity fluctuations?

Which of the following illustrates elastic demand?

The price elasticity of demand measures the responsiveness of

If the total expenditure on automobiles increases when the price of automobiles rises, the priceelasticity of demand for automobiles is

If per capita income increases by 10 percent and household expenditure on fur coats increases by 15 percent, one can conclude that the price elasticity of demand for fur coats is

If the total expenditure on clothing decreases when the price of clothing falls, the price elasticity ofdemand is

Consider the following data for a hypothetical economy. TABLE 4-5 -Refer to Table 4-5. The cross-price elasticity of demand for transit passes in terms of the price of gasoline is _. We can therefore conclude that these two goods are .

A value of zero for the elasticity of supply of some product implies that

Income elasticity measures the change in quantity demanded of some product with respect to changes in

For an inferior good, the quantity demanded

If the value of the price elasticity of demand is 0.6, demand is said to be

An increase in income will

Which of the following statements would you expect to be true about price elasticities of demand for T-shirts and clothing?

The table below shows the demand schedule for museum admissions in a small city. TABLE 4-1 -Refer to Table 4-1. The elasticity of demand for museum admissions is

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Exam 4: Elasticity

The formula for the own-price elasticity of demand for a commodity can be written as which of the following?

When the percentage change in quantity demanded resulting from a price change is less than the percentage change in price, demand is said to be

The president of a major nickel-producing company says that an increase in the price of nickel would have no effect on the total amount spent on nickel. If this is true, the price elasticity of demand for nickel is

For which of the following pairs of products would we expect the cross-elasticity of demand to be negative?

Cross-price elasticity of demand may be defined as

As the price for some product increases from $4.00 to $5.00 per unit, quantity demanded decreases from 400 to 300 units per month. For this segment of the demand curve, the price elasticity of demand is

If the demand for some good fluctuates, but supply is constant, then which of the following combinations would generally yield the greatest quantity fluctuations?

Which of the following illustrates elastic demand?

The price elasticity of demand measures the responsiveness of

If the total expenditure on automobiles increases when the price of automobiles rises, the priceelasticity of demand for automobiles is

If per capita income increases by 10 percent and household expenditure on fur coats increases by 15 percent, one can conclude that the price elasticity of demand for fur coats is

If the total expenditure on clothing decreases when the price of clothing falls, the price elasticity ofdemand is

Consider the following data for a hypothetical economy. TABLE 4-5 -Refer to Table 4-5. The cross-price elasticity of demand for transit passes in terms of the price of gasoline is _. We can therefore conclude that these two goods are .

A value of zero for the elasticity of supply of some product implies that

Income elasticity measures the change in quantity demanded of some product with respect to changes in

For an inferior good, the quantity demanded

If the value of the price elasticity of demand is 0.6, demand is said to be

An increase in income will

Which of the following statements would you expect to be true about price elasticities of demand for T-shirts and clothing?

The table below shows the demand schedule for museum admissions in a small city. TABLE 4-1 -Refer to Table 4-1. The elasticity of demand for museum admissions is

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

Filters