Question 1

What factors determine the magnitude of the price elasticity of demand?

Accepted Answer

There factors determine the magnitude of

Question 2

-The demand curve in the figure above illustrates the demand for a product with

Accepted Answer

A)  zero price elasticity of demand at all prices. 
B)  infinite price elasticity of demand. 
C)  unit price elasticity of demand at all prices. 
D)  a price elasticity of demand that is different at all prices. 
A)  zero price elasticity of demand at all prices. 
B)  infinite price elasticity of demand. 
C)  unit price elasticity of demand at all prices. 
D)  a price elasticity of demand that is different at all prices.

Question 3

At a local ice cream parlor, when the price of half-gallons of chocolate ice cream was lowered by fifty cents per half-gallon, total revenue from the sale of chocolate ice cream decreased. This result indicates that

Accepted Answer

A)  there are more people who like vanilla ice cream than there are people who like chocolate ice cream. 
B)  the demand for chocolate ice cream is inelastic. 
C)  the demand for chocolate ice cream is elastic. 
D)  None of the above answers is correct. 
A)  there are more people who like vanilla ice cream than there are people who like chocolate ice cream. 
B)  the demand for chocolate ice cream is inelastic. 
C)  the demand for chocolate ice cream is elastic. 
D)  None of the above answers is correct.

Question 4

If a good is inferior, its income elasticity will be

Accepted Answer

A)  0. 
B)  1.0. 
C)  negative. 
D)  positive. 
A)  0. 
B)  1.0. 
C)  negative. 
D)  positive.

Question 5

Goods or services that can be produced only by using unique or rare productive resources tend to have a low elasticity of supply.

Accepted Answer

A) True 
 B)False

Question 6

-June makes holiday wreaths and sells them during the holiday season. The figure above shows her supply curve of wreaths per week. Use the midpoint method in this problem.
a) Calculate the percentage change in quantity between points A and B.
b) Calculate the percentage change in price between points A and B.
c) Calculate the price elasticity of supply between points A and B.

Accepted Answer

a) The percentage change in qu

Question 7

What happens to the price elasticity of demand moving down along a downward-sloping, linear demand curve?

Accepted Answer

Moving down along a downward-sloping, li

Question 8

A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is

Accepted Answer

A)  0.5. 
B)  2.0. 
C)  10.0. 
D)  20.0. 
A)  0.5. 
B)  2.0. 
C)  10.0. 
D)  20.0.

Question 9

For baseball card collectors, Babe Ruth baseball cards from 1927 would most likely have a perfectly

Accepted Answer

A)  inelastic demand. 
B)  inelastic supply. 
C)  elastic demand. 
D)  elastic supply. 
A)  inelastic demand. 
B)  inelastic supply. 
C)  elastic demand. 
D)  elastic supply.

Question 10

Explain why the number of substitutes influences the price elasticity of demand.

Accepted Answer

The price elasticity of demand is a meas

Question 11

The ________ the portion of your income spent on a good, the ________ is your demand for the good.

Accepted Answer

A)  larger; more income elastic 
B)  larger; more price elastic 
C)  smaller; less price elastic 
D)  smaller; more income elastic 
A)  larger; more income elastic 
B)  larger; more price elastic 
C)  smaller; less price elastic 
D)  smaller; more income elastic

Question 12

If the price of oil is $60 per barrel, the quantity of oil supplied is 70 million barrels per day. If the price is $40 per barrel, the quantity of oil supplied is 69 million barrels per day. This implies that the

Accepted Answer

A)  supply of oil is elastic. 
B)  supply of oil is inelastic. 
C)  demand for oil is inelastic. 
D)  demand for oil is elastic. 
A)  supply of oil is elastic. 
B)  supply of oil is inelastic. 
C)  demand for oil is inelastic. 
D)  demand for oil is elastic.

Question 13

If the demand for a good is elastic, when the price increases, the

Accepted Answer

A)  demand will decrease. 
B)  quantity demanded will increase. 
C)  quantity demanded will decrease by a smaller percentage than the price increased. 
D)  quantity demanded will decrease by a greater percentage than the price increased. 
A)  demand will decrease. 
B)  quantity demanded will increase. 
C)  quantity demanded will decrease by a smaller percentage than the price increased. 
D)  quantity demanded will decrease by a greater percentage than the price increased.

Question 14

The demand for food is most elastic in countries

Accepted Answer

A)  with low income levels. 
B)  with intermediate income levels. 
C)  with high income levels. 
D)  that are highly urbanized. 
A)  with low income levels. 
B)  with intermediate income levels. 
C)  with high income levels. 
D)  that are highly urbanized.

Question 15

The more substitutes available for a product, the

Accepted Answer

A)  larger is its price elasticity of demand. 
B)  smaller is its income elasticity of demand. 
C)  smaller is its price elasticity of demand. 
D)  larger is its income elasticity of demand. 
A)  larger is its price elasticity of demand. 
B)  smaller is its income elasticity of demand. 
C)  smaller is its price elasticity of demand. 
D)  larger is its income elasticity of demand.

Question 16

A rise in the price of cabbage from $14 to $18 per bushel increases the quantity supplied from 4,000 to 6,000 bushels. The elasticity of supply is

Accepted Answer

A)  0.6. 
B)  0.8. 
C)  1.0. 
D)  1.6. 
A)  0.6. 
B)  0.8. 
C)  1.0. 
D)  1.6.

Question 17

For inferior goods, the income elasticity of demand is negative.

Accepted Answer

A) True 
 B)False

Question 18

If the long-run supply of rice is perfectly elastic, then

Accepted Answer

A)  as people's incomes rise, the quantity of rice supplied decreases. 
B)  as the price of corn falls, the quantity of rice demanded decreases. 
C)  in the long run, a large rise in the price of rice causes no change in the quantity of rice supplied. 
D)  in the long run, an increase in the demand for rice leaves the price of rice unchanged. 
A)  as people's incomes rise, the quantity of rice supplied decreases. 
B)  as the price of corn falls, the quantity of rice demanded decreases. 
C)  in the long run, a large rise in the price of rice causes no change in the quantity of rice supplied. 
D)  in the long run, an increase in the demand for rice leaves the price of rice unchanged.

Question 19

-The demand curve in the figure above illustrates a product whose demand has a price elasticity of demand equal to

Accepted Answer

A)  zero at all prices. 
B)  infinity. 
C)  one at all prices. 
D)  a different amount at different prices. 
A)  zero at all prices. 
B)  infinity. 
C)  one at all prices. 
D)  a different amount at different prices.

Question 20

-In the figure above, when the price of a disk is $B, total revenue is shown in the graph by area

Accepted Answer

A)  BCF0. 
B)  AGF0. 
C)  FCDE. 
D)  ADE0. 
A)  BCF0. 
B)  AGF0. 
C)  FCDE. 
D)  ADE0.

What factors determine the magnitude of the price elasticity of demand?

-The demand curve in the figure above illustrates the demand for a product with

At a local ice cream parlor, when the price of half-gallons of chocolate ice cream was lowered by fifty cents per half-gallon, total revenue from the sale of chocolate ice cream decreased. This result indicates that

If a good is inferior, its income elasticity will be

Goods or services that can be produced only by using unique or rare productive resources tend to have a low elasticity of supply.

What happens to the price elasticity of demand moving down along a downward-sloping, linear demand curve?

A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is

For baseball card collectors, Babe Ruth baseball cards from 1927 would most likely have a perfectly

Explain why the number of substitutes influences the price elasticity of demand.

The the portion of your income spent on a good, the is your demand for the good.

If the price of oil is $60 per barrel, the quantity of oil supplied is 70 million barrels per day. If the price is $40 per barrel, the quantity of oil supplied is 69 million barrels per day. This implies that the

If the demand for a good is elastic, when the price increases, the

The demand for food is most elastic in countries

The more substitutes available for a product, the

A rise in the price of cabbage from $14 to $18 per bushel increases the quantity supplied from 4,000 to 6,000 bushels. The elasticity of supply is

For inferior goods, the income elasticity of demand is negative.

If the long-run supply of rice is perfectly elastic, then

-The demand curve in the figure above illustrates a product whose demand has a price elasticity of demand equal to

-In the figure above, when the price of a disk is $B, total revenue is shown in the graph by area

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

What factors determine the magnitude of the price elasticity of demand?

-The demand curve in the figure above illustrates the demand for a product with

At a local ice cream parlor, when the price of half-gallons of chocolate ice cream was lowered by fifty cents per half-gallon, total revenue from the sale of chocolate ice cream decreased. This result indicates that

If a good is inferior, its income elasticity will be

Goods or services that can be produced only by using unique or rare productive resources tend to have a low elasticity of supply.

What happens to the price elasticity of demand moving down along a downward-sloping, linear demand curve?

A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is

For baseball card collectors, Babe Ruth baseball cards from 1927 would most likely have a perfectly

Explain why the number of substitutes influences the price elasticity of demand.

The ________ the portion of your income spent on a good, the ________ is your demand for the good.

If the price of oil is $60 per barrel, the quantity of oil supplied is 70 million barrels per day. If the price is $40 per barrel, the quantity of oil supplied is 69 million barrels per day. This implies that the

If the demand for a good is elastic, when the price increases, the

The demand for food is most elastic in countries

The more substitutes available for a product, the

A rise in the price of cabbage from $14 to $18 per bushel increases the quantity supplied from 4,000 to 6,000 bushels. The elasticity of supply is

For inferior goods, the income elasticity of demand is negative.

If the long-run supply of rice is perfectly elastic, then

-The demand curve in the figure above illustrates a product whose demand has a price elasticity of demand equal to

-In the figure above, when the price of a disk is $B, total revenue is shown in the graph by area

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 the portion of your income spent on a good, the is your demand for the good.