Question 1

On a linear demand curve that intersects both axes

Accepted Answer

A)  the elasticity exceeds 1.00 at all prices. 
B)  the elasticity is less than 1.00 at all prices. 
C)  the elasticity equals 1.00 at all prices. 
D)  the elasticity decreases as the price falls and quantity increases. 
A)  the elasticity exceeds 1.00 at all prices. 
B)  the elasticity is less than 1.00 at all prices. 
C)  the elasticity equals 1.00 at all prices. 
D)  the elasticity decreases as the price falls and quantity increases.

Question 2

"The price elasticity of demand is a measure of how sensitive demanders are to changes in the price of a product." Is this statement true or false?

Accepted Answer

The assertion is true. All elasticities

Question 3

-The table above gives the demand schedule for snow peas. If the price of snow peas falls from $4.00 to $3.00 a bushel, total revenue will

Accepted Answer

A)  increase because demand is elastic in this range. 
B)  decrease because demand is elastic in this range. 
C)  increase because demand is inelastic in this range. 
D)  decrease because demand is inelastic in this range. 
A)  increase because demand is elastic in this range. 
B)  decrease because demand is elastic in this range. 
C)  increase because demand is inelastic in this range. 
D)  decrease because demand is inelastic in this range.

Question 4

-The figure above illustrates a linear demand curve. If the price rises from $6 to $8 demand is ________ and if the price falls from $8 to $6 demand is ________.

Accepted Answer

A)  elastic; elastic 
B)  elastic; inelastic 
C)  inelastic; elastic 
D)  inelastic; inelastic 
A)  elastic; elastic 
B)  elastic; inelastic 
C)  inelastic; elastic 
D)  inelastic; inelastic

Question 5

Most college courses have a required textbook. Previously, textbooks were only available through the campus bookstore, but now, these texts can be purchased from online retailers, other bookstores, or students can buy an electronic version of the text. Because of this, we can predict the price elasticity of demand for textbooks from the campus bookstore is

Accepted Answer

A)  increasing. 
B)  decreasing. 
C)  staying the same. 
D)  increasing and then decreasing. 
A)  increasing. 
B)  decreasing. 
C)  staying the same. 
D)  increasing and then decreasing.

Question 6

For baseball memorabilia fans, the baseball with which Hank Aaron hit his 735th career home run is perfectly inelastic in supply and in demand.

Accepted Answer

A) True 
 B)False

Question 7

If the price elasticity of demand for airline travel is 0.52 in the short run and 1.46 in the long run, then the demand for airline travel is ________ in the short run and ________ in the long run.

Accepted Answer

A)  elastic; elastic 
B)  elastic; inelastic 
C)  inelastic; elastic 
D)  inelastic; inelastic 
A)  elastic; elastic 
B)  elastic; inelastic 
C)  inelastic; elastic 
D)  inelastic; inelastic

Question 8

Unit elastic demand means that the

Accepted Answer

A)  ratio of a change in the quantity demanded to a change in the price equals 1. 
B)  ratio of a percentage change in the quantity demanded to a percentage change in the price equals 1. 
C)  demand curve is vertical. 
D)  demand curve is horizontal. 
A)  ratio of a change in the quantity demanded to a change in the price equals 1. 
B)  ratio of a percentage change in the quantity demanded to a percentage change in the price equals 1. 
C)  demand curve is vertical. 
D)  demand curve is horizontal.

Question 9

On a straight-line downward-sloping demand curve, the maximum elasticity of demand occurs

Accepted Answer

A)  at its vertical intercept. 
B)  at its midpoint. 
C)  at its horizontal intercept. 
D)  where it intersects the supply curve. 
A)  at its vertical intercept. 
B)  at its midpoint. 
C)  at its horizontal intercept. 
D)  where it intersects the supply curve.

Question 10

Suppose that the quantity of root beer demanded declines from 103,000 gallons per week to 97,000 gallons per week as a consequence of a 10 percent increase in the price of root beer. The price elasticity of demand is

Accepted Answer

A)  0.60. 
B)  1.40. 
C)  1.66. 
D)  6.00. 
A)  0.60. 
B)  1.40. 
C)  1.66. 
D)  6.00.

Question 11

If the quantity demanded changes by an infinitely large amount for a given change in price, then demand is

Accepted Answer

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

Question 12

A 10 percent increase in income increases the quantity of orange juice demanded from 19,200 to 20,800 gallons. The income elasticity of demand for orange juice is

Accepted Answer

A)  0.5. 
B)  0.8. 
C)  1.0. 
D)  1.2. 
A)  0.5. 
B)  0.8. 
C)  1.0. 
D)  1.2.

Question 13

Taco Bell's economists determine that the price elasticity of demand for their tacos is 2.0. So, if Taco Bell raises the price of its tacos by 6.0 percent, the quantity demanded will decrease by ________ percent.

Accepted Answer

A)  2.0 
B)  3.0 
C)  6.0 
D)  12.0 
A)  2.0 
B)  3.0 
C)  6.0 
D)  12.0

Question 14

-The above table gives the demand schedule for Billy Bob's BBQ ribs. An increase in the price of a pound of ribs will lead to a decrease in total revenue when

Accepted Answer

A)  demand is inelastic. 
B)  the demand curve is vertical. 
C)  the price increase occurs over the price range of 0 to $5. 
D)  the price increase occurs over the price range of $5 to $10. 
A)  demand is inelastic. 
B)  the demand curve is vertical. 
C)  the price increase occurs over the price range of 0 to $5. 
D)  the price increase occurs over the price range of $5 to $10.

Question 15

Demand is price elastic if a

Accepted Answer

A)  relatively large price increase leads to a relatively small decrease in the quantity demanded. 
B)  relatively small price increase leads to a relatively large decrease in the quantity demanded. 
C)  price increase leads to a decrease in the quantity demanded. 
D)  price increase leads to an increase in the quantity demanded. 
A)  relatively large price increase leads to a relatively small decrease in the quantity demanded. 
B)  relatively small price increase leads to a relatively large decrease in the quantity demanded. 
C)  price increase leads to a decrease in the quantity demanded. 
D)  price increase leads to an increase in the quantity demanded.

Question 16

Specialty chocolate bars with a high cocoa content have been drawing a lot of attention in gourmet circles in 2008 but the price of cocoa beans has increased more than 44 percent in this time period. In response to the increase in the price of cocoa beans, Rogue Chocolatier has increased the price of their gourmet chocolate bars by 20 percent. Rogue observes the quantity of their bars sold decreased by 15 percent. This means the price elasticity of demand for gourmet chocolate bars is

Accepted Answer

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

Question 17

-The above figure shows a linear (straight-line) demand curve. Starting at point A and then moving to point B and then point C, the price elasticity of demand

Accepted Answer

A)  increases. 
B)  decreases. 
C)  increases and then decreases. 
D)  decreases and then increases. 
A)  increases. 
B)  decreases. 
C)  increases and then decreases. 
D)  decreases and then increases.

Question 18

-The figure shows the relationship between Moira's income and the quantity of macaroni that she demands. When income is less than $350 per month, macaroni

Accepted Answer

A)  is an inferior good. 
B)  is a normal good. 
C)  has many substitutes. 
D)  has negative income elasticity. 
A)  is an inferior good. 
B)  is a normal good. 
C)  has many substitutes. 
D)  has negative income elasticity.

Question 19

Demand is inelastic if

Accepted Answer

A)  a large change in quantity demanded results in a small change in price. 
B)  the quantity demanded is very responsive to changes in price. 
C)  the price elasticity of demand is less than 1. 
D)  the price elasticity of demand is greater than 1. 
A)  a large change in quantity demanded results in a small change in price. 
B)  the quantity demanded is very responsive to changes in price. 
C)  the price elasticity of demand is less than 1. 
D)  the price elasticity of demand is greater than 1.

Question 20

Suppose that the cross elasticity of demand for Dell computers with respect to Hewlett Packard computers is 2.1. If Hewlett-Packard lowers its price by 5 percent, other things being equal, what will be the percentage change in the quantity of Dell computers demanded?

Accepted Answer

A)  2.4 percent 
B)  -10.5 percent 
C)  10.5 percent 
D)  -42 percent 
A)  2.4 percent 
B)  -10.5 percent 
C)  10.5 percent 
D)  -42 percent

On a linear demand curve that intersects both axes

"The price elasticity of demand is a measure of how sensitive demanders are to changes in the price of a product." Is this statement true or false?

-The table above gives the demand schedule for snow peas. If the price of snow peas falls from $4.00 to $3.00 a bushel, total revenue will

-The figure above illustrates a linear demand curve. If the price rises from $6 to $8 demand is and if the price falls from $8 to $6 demand is .

For baseball memorabilia fans, the baseball with which Hank Aaron hit his 735th career home run is perfectly inelastic in supply and in demand.

If the price elasticity of demand for airline travel is 0.52 in the short run and 1.46 in the long run, then the demand for airline travel is in the short run and in the long run.

Unit elastic demand means that the

On a straight-line downward-sloping demand curve, the maximum elasticity of demand occurs

Suppose that the quantity of root beer demanded declines from 103,000 gallons per week to 97,000 gallons per week as a consequence of a 10 percent increase in the price of root beer. The price elasticity of demand is

If the quantity demanded changes by an infinitely large amount for a given change in price, then demand is

A 10 percent increase in income increases the quantity of orange juice demanded from 19,200 to 20,800 gallons. The income elasticity of demand for orange juice is

Taco Bell's economists determine that the price elasticity of demand for their tacos is 2.0. So, if Taco Bell raises the price of its tacos by 6.0 percent, the quantity demanded will decrease by ________ percent.

-The above table gives the demand schedule for Billy Bob's BBQ ribs. An increase in the price of a pound of ribs will lead to a decrease in total revenue when

Demand is price elastic if a

-The above figure shows a linear (straight-line) demand curve. Starting at point A and then moving to point B and then point C, the price elasticity of demand

-The figure shows the relationship between Moira's income and the quantity of macaroni that she demands. When income is less than $350 per month, macaroni

Demand is inelastic if

Suppose that the cross elasticity of demand for Dell computers with respect to Hewlett Packard computers is 2.1. If Hewlett-Packard lowers its price by 5 percent, other things being equal, what will be the percentage change in the quantity of Dell computers demanded?

What Is Economics

The Economic Problem

Demand and Supply

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 4: Elasticity

On a linear demand curve that intersects both axes

"The price elasticity of demand is a measure of how sensitive demanders are to changes in the price of a product." Is this statement true or false?

-The table above gives the demand schedule for snow peas. If the price of snow peas falls from $4.00 to $3.00 a bushel, total revenue will

-The figure above illustrates a linear demand curve. If the price rises from $6 to $8 demand is ________ and if the price falls from $8 to $6 demand is ________.

For baseball memorabilia fans, the baseball with which Hank Aaron hit his 735th career home run is perfectly inelastic in supply and in demand.

If the price elasticity of demand for airline travel is 0.52 in the short run and 1.46 in the long run, then the demand for airline travel is ________ in the short run and ________ in the long run.

Unit elastic demand means that the

On a straight-line downward-sloping demand curve, the maximum elasticity of demand occurs

Suppose that the quantity of root beer demanded declines from 103,000 gallons per week to 97,000 gallons per week as a consequence of a 10 percent increase in the price of root beer. The price elasticity of demand is

If the quantity demanded changes by an infinitely large amount for a given change in price, then demand is

A 10 percent increase in income increases the quantity of orange juice demanded from 19,200 to 20,800 gallons. The income elasticity of demand for orange juice is

Taco Bell's economists determine that the price elasticity of demand for their tacos is 2.0. So, if Taco Bell raises the price of its tacos by 6.0 percent, the quantity demanded will decrease by ________ percent.

-The above table gives the demand schedule for Billy Bob's BBQ ribs. An increase in the price of a pound of ribs will lead to a decrease in total revenue when

Demand is price elastic if a

-The above figure shows a linear (straight-line) demand curve. Starting at point A and then moving to point B and then point C, the price elasticity of demand

-The figure shows the relationship between Moira's income and the quantity of macaroni that she demands. When income is less than $350 per month, macaroni

Demand is inelastic if

Suppose that the cross elasticity of demand for Dell computers with respect to Hewlett Packard computers is 2.1. If Hewlett-Packard lowers its price by 5 percent, other things being equal, what will be the percentage change in the quantity of Dell computers demanded?

What Is Economics

The Economic Problem

Demand and Supply

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-The figure above illustrates a linear demand curve. If the price rises from $6 to $8 demand is and if the price falls from $8 to $6 demand is .

If the price elasticity of demand for airline travel is 0.52 in the short run and 1.46 in the long run, then the demand for airline travel is in the short run and in the long run.