Question 1

Table: Price Elasticity     (Table: Price Elasticity) Look again at the table Price Elasticity.What is the price elasticity of demand between $1.25 and $1.00?

Accepted Answer

A) 0.60 
B) 0.82 
C) 1.0 
D) 1.6 
A) 0.60 
B) 0.82 
C) 1.0 
D) 1.6

Question 2

Figure: The Demand for Shirts
(Figure: The Demand for Shirts) Look at the figure The Demand for Shirts.The price elasticity of demand for the segment AB, using the midpoint method, is:

Accepted Answer

A) 13. 
B) 11. 
C) 0.91. 
D) 0.1. 
A) 13. 
B) 11. 
C) 0.91. 
D) 0.1.

Question 3

Suppose the income elasticity for cross-country bus trips is equal to -2 and the income elasticity for cross-country plane trips is equal to +2.Does this make sense? Explain your answer.

Accepted Answer

Answer
Yes, it makes sense.With a negati

Question 4

You are the manager of a supermarket, and you know that the cross-price elasticity of peanut butter to jelly is exactly -2.0.Because of a bad grape harvest, grape jelly prices are expected to rise by 10% next year.To account for the change in demand, you should stock 10% more peanut butter.

Accepted Answer

A) True 
 B)False

Question 5

If the consumption of a certain good increases when income decreases, that good is considered:
A.a substitute good.
B.a complementary good.
C.a normal good.
D.an inferior good.

Accepted Answer

The answer of If the consumption of a certain good...

Question 6

If the price elasticity of demand equals 0, then this means the demand curve is:
A.horizontal.
B.vertical.
C.upward sloping.
D.unit-elastic.

Accepted Answer

The answer of If the price elasticity of demand equals...

Question 7

If demand is perfectly inelastic, changes in price leave total revenue unchanged.

Accepted Answer

A) True 
 B)False

Question 8

Table: Price Elasticity
(Table: Price Elasticity) Look at the table Price Elasticity.What is the price elasticity of demand (using the midpoint formula) between $2.50 and $2.25?
A.9
B.19
C.119
D.0.5

Accepted Answer

The answer of Table: Price Elasticity
(Table: Price Elasticity) Look at...

Question 9

(Table: Market for Pizza) If income changes from $1,000 to $1,400 per month, the income elasticity of demand at a price of $10 per pizza is:
A.1.2
B.-1.2
C.0.825
D.0.40

Accepted Answer

The answer of (Table: Market for Pizza) If income changes...

Question 10

The income elasticity of demand measures:
A.how much the quantity demanded changes in response to a price change.
B.how much a consumer can buy at given income levels.
C.how much consumer purchasing power is affected when prices change.
D.how the demand for a good changes in response to changes in income.

Accepted Answer

how the demand for a

Question 11

A newspaper typically consumes a smaller fraction of a consumer's budget than a home entertainment system.Therefore, you would expect the demand for:
A.a home entertainment system to be more price-elastic.
B.a home entertainment system to be more price-inelastic.
C.newspapers to be more price-elastic.
D.the two to be equally price-elastic.

Accepted Answer

a home entertainment

Question 12

The price elasticity of demand is computed as the percentage change in the:
A.quantity demanded divided by the percentage change in the quantity supplied.
B.price divided by the percentage change in the quantity demanded.
C.quantity demanded divided by the percentage change in income.
D.quantity demanded divided by the percentage change in the price.

Accepted Answer

quantity demanded di

Question 13

A good is likely to have an inelastic demand curve if:
A.the consumer has significant time to respond to the price change.
B.the good has few available substitutes.
C.the good is a luxury.
D.the good accounts for a large share of consumer income.

Accepted Answer

the good h

Question 14

The income elasticity of demand of an inferior good:
A.is less than 0.
B.is equal to 0.
C.is greater than 0.
D.cannot be determined.

Accepted Answer

The answer of The income elasticity of demand of an...

Question 15

If the price of chocolate-covered peanuts decreases from $1.15 to $1.05 and the quantity demanded increases from 190 bags to 220 bags, then the price elasticity of demand (using the midpoint method) is:

Accepted Answer

A) 0.5. 
B) 1. 
C) 2. 
D) greater than 1. 
A) 0.5. 
B) 1. 
C) 2. 
D) greater than 1.

Question 16

Suppose the price elasticity of demand for electricity is equal to 0.15 in the short run but is equal to 0.5 in the long run.What explains this difference, and what does this imply about the demand curve for electricity in the short run versus the long run?

Accepted Answer

Answer
The demand for electricity in the

Question 17

Since the price of walnuts increases as the demand for cashews increases, we can assume that these two goods are:
A.unrelated goods.
B.superior goods.
C.inferior goods.
D.substitute goods.

Accepted Answer

The answer of Since the price of walnuts increases as...

Question 18

A perfectly inelastic demand curve for insulin would mean that the quantity demanded does
not respond at all to changes in the price of insulin.

Accepted Answer

A) True 
 B)False

Question 19

Table: Price Elasticity
(Table: Price Elasticity) Look again at the table Price Elasticity.What is the price elasticity of demand between $2.00 and $1.75?

Accepted Answer

A) 2.33 
B) 3.00 
C) 4.00 
D) 0.125 
A) 2.33 
B) 3.00 
C) 4.00 
D) 0.125

Question 20

Decreases in input costs and a longer time since a price change will tend to:
A.increase the price elasticity of supply.
B.decrease price elasticity of supply.
C.have no impact on the price elasticity of supply.
D.increase price elasticity of supply with decreases in input costs but decrease price elasticity of supply with length of time.

Accepted Answer

increase t

Table: Price Elasticity (Table: Price Elasticity) Look again at the table Price Elasticity.What is the price elasticity of demand between $1.25 and $1.00?

Figure: The Demand for Shirts (Figure: The Demand for Shirts) Look at the figure The Demand for Shirts.The price elasticity of demand for the segment AB, using the midpoint method, is:

Suppose the income elasticity for cross-country bus trips is equal to -2 and the income elasticity for cross-country plane trips is equal to +2.Does this make sense? Explain your answer.

You are the manager of a supermarket, and you know that the cross-price elasticity of peanut butter to jelly is exactly -2.0.Because of a bad grape harvest, grape jelly prices are expected to rise by 10% next year.To account for the change in demand, you should stock 10% more peanut butter.

If the consumption of a certain good increases when income decreases, that good is considered: A.a substitute good. B.a complementary good. C.a normal good. D.an inferior good.

If the price elasticity of demand equals 0, then this means the demand curve is: A.horizontal. B.vertical. C.upward sloping. D.unit-elastic.

If demand is perfectly inelastic, changes in price leave total revenue unchanged.

Table: Price Elasticity (Table: Price Elasticity) Look at the table Price Elasticity.What is the price elasticity of demand (using the midpoint formula) between $2.50 and $2.25? A.9 B.19 C.119 D.0.5

(Table: Market for Pizza) If income changes from $1,000 to $1,400 per month, the income elasticity of demand at a price of $10 per pizza is: A.1.2 B.-1.2 C.0.825 D.0.40

A good is likely to have an inelastic demand curve if: A.the consumer has significant time to respond to the price change. B.the good has few available substitutes. C.the good is a luxury. D.the good accounts for a large share of consumer income.

The income elasticity of demand of an inferior good: A.is less than 0. B.is equal to 0. C.is greater than 0. D.cannot be determined.

If the price of chocolate-covered peanuts decreases from $1.15 to $1.05 and the quantity demanded increases from 190 bags to 220 bags, then the price elasticity of demand (using the midpoint method) is:

Suppose the price elasticity of demand for electricity is equal to 0.15 in the short run but is equal to 0.5 in the long run.What explains this difference, and what does this imply about the demand curve for electricity in the short run versus the long run?

Since the price of walnuts increases as the demand for cashews increases, we can assume that these two goods are: A.unrelated goods. B.superior goods. C.inferior goods. D.substitute goods.

A perfectly inelastic demand curve for insulin would mean that the quantity demanded does not respond at all to changes in the price of insulin.

Table: Price Elasticity (Table: Price Elasticity) Look again at the table Price Elasticity.What is the price elasticity of demand between $2.00 and $1.75?

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Exam 6: Elasticity

Table: Price Elasticity (Table: Price Elasticity) Look again at the table Price Elasticity.What is the price elasticity of demand between $1.25 and $1.00?

Figure: The Demand for Shirts (Figure: The Demand for Shirts) Look at the figure The Demand for Shirts.The price elasticity of demand for the segment AB, using the midpoint method, is:

Suppose the income elasticity for cross-country bus trips is equal to -2 and the income elasticity for cross-country plane trips is equal to +2.Does this make sense? Explain your answer.

You are the manager of a supermarket, and you know that the cross-price elasticity of peanut butter to jelly is exactly -2.0.Because of a bad grape harvest, grape jelly prices are expected to rise by 10% next year.To account for the change in demand, you should stock 10% more peanut butter.

If the consumption of a certain good increases when income decreases, that good is considered: A.a substitute good. B.a complementary good. C.a normal good. D.an inferior good.

If the price elasticity of demand equals 0, then this means the demand curve is: A.horizontal. B.vertical. C.upward sloping. D.unit-elastic.

If demand is perfectly inelastic, changes in price leave total revenue unchanged.

Table: Price Elasticity (Table: Price Elasticity) Look at the table Price Elasticity.What is the price elasticity of demand (using the midpoint formula) between $2.50 and $2.25? A.9 B.19 C.119 D.0.5

(Table: Market for Pizza) If income changes from $1,000 to $1,400 per month, the income elasticity of demand at a price of $10 per pizza is: A.1.2 B.-1.2 C.0.825 D.0.40

A good is likely to have an inelastic demand curve if: A.the consumer has significant time to respond to the price change. B.the good has few available substitutes. C.the good is a luxury. D.the good accounts for a large share of consumer income.

The income elasticity of demand of an inferior good: A.is less than 0. B.is equal to 0. C.is greater than 0. D.cannot be determined.

If the price of chocolate-covered peanuts decreases from $1.15 to $1.05 and the quantity demanded increases from 190 bags to 220 bags, then the price elasticity of demand (using the midpoint method) is:

Suppose the price elasticity of demand for electricity is equal to 0.15 in the short run but is equal to 0.5 in the long run.What explains this difference, and what does this imply about the demand curve for electricity in the short run versus the long run?

Since the price of walnuts increases as the demand for cashews increases, we can assume that these two goods are: A.unrelated goods. B.superior goods. C.inferior goods. D.substitute goods.

A perfectly inelastic demand curve for insulin would mean that the quantity demanded does not respond at all to changes in the price of insulin.

Table: Price Elasticity (Table: Price Elasticity) Look again at the table Price Elasticity.What is the price elasticity of demand between $2.00 and $1.75?

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters