Question 1

If the supply curve for housing is perfectly inelastic, then a reduction in demand will cause the equilibrium price to:

Accepted Answer

A)  rise and the equilibrium quantity to fall. 
B)  rise and the equilibrium quantity to stay the same. 
C)  fall and the equilibrium quantity to fall. 
D)  fall and the equilibrium quantity to stay the same. 
A)  rise and the equilibrium quantity to fall. 
B)  rise and the equilibrium quantity to stay the same. 
C)  fall and the equilibrium quantity to fall. 
D)  fall and the equilibrium quantity to stay the same.

Question 2

If the supply curve for aspirin is perfectly elastic, then a reduction in demand will cause the equilibrium price to:

Accepted Answer

A)  stay the same and the equilibrium quantity to fall. 
B)  fall and the equilibrium quantity to fall. 
C)  rise and the equilibrium quantity to stay the same. 
D)  rise and the equilibrium quantity to fall. 
A)  stay the same and the equilibrium quantity to fall. 
B)  fall and the equilibrium quantity to fall. 
C)  rise and the equilibrium quantity to stay the same. 
D)  rise and the equilibrium quantity to fall.

Question 3

What are normal goods and inferior goods? Discuss within the context of income elasticity of demand.

Accepted Answer

For most products, most of the time, the

Question 4

The price elasticity of demand for tickets to local baseball games is estimated to be equal to 0.89. In order to boost ticket revenues, an economist would advise:

Accepted Answer

A)  increasing the price of game tickets because demand is inelastic. 
B)  not changing the price of game tickets because demand is unit elastic. 
C)  increasing the price of game tickets because demand is elastic. 
D)  decreasing the price of game tickets because demand is elastic. 
A)  increasing the price of game tickets because demand is inelastic. 
B)  not changing the price of game tickets because demand is unit elastic. 
C)  increasing the price of game tickets because demand is elastic. 
D)  decreasing the price of game tickets because demand is elastic.

Question 5

Define zero elasticity and describe the resultant demand curve.

Accepted Answer

Zero elasticity refers to the

Question 6

Define wage elasticity of labor supply and differentiate the elasticity between teenage workers and that of middle-aged adult workers in the workforce.

Accepted Answer

The income elasticity of demand is the p

Question 7

Define the elasticity of labor supply.

Accepted Answer

The percentage chang

Question 8

Define cross-price elasticity of demand and discuss within the context of complementary goods and substitute goods.

Accepted Answer

The term “cross-price” refers to the ide

Question 9

The elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in _______.

Accepted Answer

A)  quantity supplied 
B)  the slope of the demand curve 
C)  price 
D)  the slope in the supply curve 
A)  quantity supplied 
B)  the slope of the demand curve 
C)  price 
D)  the slope in the supply curve

Question 10

A price cut will increase the total revenue a firm receives if the demand for its product is:

Accepted Answer

A)  unit inelastic. 
B)  unit elastic. 
C)  inelastic. 
D)  elastic. 
A)  unit inelastic. 
B)  unit elastic. 
C)  inelastic. 
D)  elastic.

Question 11

If cola and iced tea are good substitutes for consumers, then it is likely that:

Accepted Answer

A)  their cross price elasticities are greater than zero. 
B)  their price elasticities of demand are less than one. 
C)  their income elasticities are less than zero. 
D)  their price elasticities of supply are less than one . 
A)  their cross price elasticities are greater than zero. 
B)  their price elasticities of demand are less than one. 
C)  their income elasticities are less than zero. 
D)  their price elasticities of supply are less than one .

Question 12

Suppose that Bobo purchases 1 pizza per month when the price is $19 and 3 pizzas per month when the price is $15. What is the price elasticity of Bobo's demand curve?

Accepted Answer

A)  0.235 
B)  2.00 
C)  4.25 
D)  6.33 
A)  0.235 
B)  2.00 
C)  4.25 
D)  6.33

Question 13

The longer the time period considered, the more the elasticity of supply tends to:

Accepted Answer

A)  decrease 
B)  remain constant 
C)  increase 
D)  converge to zero 
A)  decrease 
B)  remain constant 
C)  increase 
D)  converge to zero

Question 14

If the question is whether a shift in supply will have a greater effect on equilibrium price or quantity, the answer lies not with the elasticity of supply, but with the elasticity of demand. Why is this?

Accepted Answer

The shifting supply curve is m

Question 15

A 25 percent decrease in the price of breakfast cereal leads to a 20 percent increase in the quantity of cereal demanded. As a result:

Accepted Answer

A)  total revenue will decrease. 
B)  total revenue will increase. 
C)  total revenue will remain constant. 
D)  the elasticity of demand will increase. 
A)  total revenue will decrease. 
B)  total revenue will increase. 
C)  total revenue will remain constant. 
D)  the elasticity of demand will increase.

Question 16

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to:

Accepted Answer

A)  rise and the equilibrium quantity to fall. 
B)  rise and the equilibrium quantity to stay the same. 
C)  rise and the equilibrium quantity to rise. 
D)  stay the same and the equilibrium quantity to fall. 
A)  rise and the equilibrium quantity to fall. 
B)  rise and the equilibrium quantity to stay the same. 
C)  rise and the equilibrium quantity to rise. 
D)  stay the same and the equilibrium quantity to fall.

Question 17

Demand is said to be _______ when the quantity demanded is very responsive to changes in price.

Accepted Answer

A)  elastic 
B)  unit elastic 
C)  inelastic 
D)  independent 
A)  elastic 
B)  unit elastic 
C)  inelastic 
D)  independent

Question 18

Demand is said to be _______ when the quantity demanded is not very responsive to changes in price.

Accepted Answer

A)  independent 
B)  inelastic 
C)  unit elastic 
D)  elastic 
A)  independent 
B)  inelastic 
C)  unit elastic 
D)  elastic

Question 19

If the supply curve for a product is vertical, then the elasticity of supply is:

Accepted Answer

A)  equal to zero. 
B)  equal to 1. 
C)  greater than 1 but less than infinity. 
D)  equal to infinity. 
A)  equal to zero. 
B)  equal to 1. 
C)  greater than 1 but less than infinity. 
D)  equal to infinity.

Question 20

Price elasticity of demand is defined as:

Accepted Answer

A)  the slope of the demand curve. 
B)  the slope of the demand curve divided by the price. 
C)  the percentage change in price divided by the percentage change in quantity demanded. 
D)  the percentage change in quantity demanded divided by the percentage change in price. 
A)  the slope of the demand curve. 
B)  the slope of the demand curve divided by the price. 
C)  the percentage change in price divided by the percentage change in quantity demanded. 
D)  the percentage change in quantity demanded divided by the percentage change in price.

If the supply curve for housing is perfectly inelastic, then a reduction in demand will cause the equilibrium price to:

If the supply curve for aspirin is perfectly elastic, then a reduction in demand will cause the equilibrium price to:

What are normal goods and inferior goods? Discuss within the context of income elasticity of demand.

The price elasticity of demand for tickets to local baseball games is estimated to be equal to 0.89. In order to boost ticket revenues, an economist would advise:

Define zero elasticity and describe the resultant demand curve.

Define wage elasticity of labor supply and differentiate the elasticity between teenage workers and that of middle-aged adult workers in the workforce.

Define the elasticity of labor supply.

Define cross-price elasticity of demand and discuss within the context of complementary goods and substitute goods.

The elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in _______.

A price cut will increase the total revenue a firm receives if the demand for its product is:

If cola and iced tea are good substitutes for consumers, then it is likely that:

Suppose that Bobo purchases 1 pizza per month when the price is $19 and 3 pizzas per month when the price is $15. What is the price elasticity of Bobo's demand curve?

The longer the time period considered, the more the elasticity of supply tends to:

If the question is whether a shift in supply will have a greater effect on equilibrium price or quantity, the answer lies not with the elasticity of supply, but with the elasticity of demand. Why is this?

A 25 percent decrease in the price of breakfast cereal leads to a 20 percent increase in the quantity of cereal demanded. As a result:

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to:

Demand is said to be _______ when the quantity demanded is very responsive to changes in price.

Demand is said to be _______ when the quantity demanded is not very responsive to changes in price.

If the supply curve for a product is vertical, then the elasticity of supply is:

Price elasticity of demand is defined as:

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopoly

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

International Trade

Globalization and Protectionism

Filters

Exam 5: Elasticity

If the supply curve for housing is perfectly inelastic, then a reduction in demand will cause the equilibrium price to:

If the supply curve for aspirin is perfectly elastic, then a reduction in demand will cause the equilibrium price to:

What are normal goods and inferior goods? Discuss within the context of income elasticity of demand.

The price elasticity of demand for tickets to local baseball games is estimated to be equal to 0.89. In order to boost ticket revenues, an economist would advise:

Define zero elasticity and describe the resultant demand curve.

Define wage elasticity of labor supply and differentiate the elasticity between teenage workers and that of middle-aged adult workers in the workforce.

Define the elasticity of labor supply.

Define cross-price elasticity of demand and discuss within the context of complementary goods and substitute goods.

The elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in _______.

A price cut will increase the total revenue a firm receives if the demand for its product is:

If cola and iced tea are good substitutes for consumers, then it is likely that:

Suppose that Bobo purchases 1 pizza per month when the price is $19 and 3 pizzas per month when the price is $15. What is the price elasticity of Bobo's demand curve?

The longer the time period considered, the more the elasticity of supply tends to:

If the question is whether a shift in supply will have a greater effect on equilibrium price or quantity, the answer lies not with the elasticity of supply, but with the elasticity of demand. Why is this?

A 25 percent decrease in the price of breakfast cereal leads to a 20 percent increase in the quantity of cereal demanded. As a result:

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to:

Demand is said to be _______ when the quantity demanded is very responsive to changes in price.

Demand is said to be _______ when the quantity demanded is not very responsive to changes in price.

If the supply curve for a product is vertical, then the elasticity of supply is:

Price elasticity of demand is defined as:

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopoly

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

International Trade

Globalization and Protectionism

Filters