Question 1

A good with a horizontal demand curve has a demand

Accepted Answer

A)  with an income elasticity of demand equal to 0. 
B)  with a price elasticity of demand equal to 0. 
C)  with a price elasticity of demand equal to infinity. 
D)  for which there are no substitutes. 
A)  with an income elasticity of demand equal to 0. 
B)  with a price elasticity of demand equal to 0. 
C)  with a price elasticity of demand equal to infinity. 
D)  for which there are no substitutes.

Question 2

When the price of perfume changes from $24 to $26, the quantity supplied increases from 100 jars to 150 jars. What is the elasticity of supply of perfume?

Accepted Answer

A)  0.04 
B)  25.0 
C)  5.0 
D)  0.2 
A)  0.04 
B)  25.0 
C)  5.0 
D)  0.2

Question 3

-The above table gives the demand schedule for Billy Bob's BBQ ribs. The price elasticity of demand for Billy Bob's ribs over the price range of $3 to $1 is equal to

Accepted Answer

A)  4.00. 
B)  2.00. 
C)  0.50. 
D)  0.25. 
A)  4.00. 
B)  2.00. 
C)  0.50. 
D)  0.25.

Question 4

If the price elasticity of demand for a good is 0.8, then a

Accepted Answer

A)  1 percent rise in the price leads to a 0.8 percent decrease in the quantity demanded. 
B)  one dollar rise in the price leads to a 0.8 percent decrease in the quantity demanded. 
C)  1 percent rise in the price leads to an 80 percent decrease in the quantity demanded. 
D)  1 percent rise in the price leads to an 8 percent decrease in the quantity demanded. 
A)  1 percent rise in the price leads to a 0.8 percent decrease in the quantity demanded. 
B)  one dollar rise in the price leads to a 0.8 percent decrease in the quantity demanded. 
C)  1 percent rise in the price leads to an 80 percent decrease in the quantity demanded. 
D)  1 percent rise in the price leads to an 8 percent decrease in the quantity demanded.

Question 5

If hot dog vendors at baseball games want to maximize their total sales revenue, they will have to

Accepted Answer

A)  be willing to experience reduced hot dog expenditure by baseball fans. 
B)  set the price of their hot dogs so that the demand is unit elastic. 
C)  sell as many hot dogs as they can, even if it means lowering price. 
D)  raise their price, even if it means selling fewer hot dogs. 
A)  be willing to experience reduced hot dog expenditure by baseball fans. 
B)  set the price of their hot dogs so that the demand is unit elastic. 
C)  sell as many hot dogs as they can, even if it means lowering price. 
D)  raise their price, even if it means selling fewer hot dogs.

Question 6

Demand is income elastic if

Accepted Answer

A)  a large percentage increase in income results in a small percentage increase in quantity demanded. 
B)  a small percentage increase in income results in a large percentage increase in quantity demanded. 
C)  an increase in income does not affect the quantity demanded. 
D)  the good in question has close substitutes. 
A)  a large percentage increase in income results in a small percentage increase in quantity demanded. 
B)  a small percentage increase in income results in a large percentage increase in quantity demanded. 
C)  an increase in income does not affect the quantity demanded. 
D)  the good in question has close substitutes.

Question 7

When the price of milk goes up as a result of a rightward shift of the demand curve for milk, the total revenue collected by milk producers will

Accepted Answer

A)  increase only if milk is inelastic in supply. 
B)  decrease only if milk is elastic in supply. 
C)  remain constant only if milk has a unitary price elasticity of supply. 
D)  none of the above 
A)  increase only if milk is inelastic in supply. 
B)  decrease only if milk is elastic in supply. 
C)  remain constant only if milk has a unitary price elasticity of supply. 
D)  none of the above

Question 8

Suppose the price elasticity of demand for bouquets of flowers is 4.0. You are charging $8 per bouquet. If you want to increase the quantity of bouquets you sell by 20 percent, what price should you charge?

Accepted Answer

The price elasticity of demand = (percen

Question 9

-The figure illustrates Anne's demand for books. At ________ a book, Anne's demand for books is inelastic.

Accepted Answer

A)  all prices between $15 and $30 
B)  all prices between $10 and $15 
C)  all prices between $10 and $20 
D)  all prices below $30 
A)  all prices between $15 and $30 
B)  all prices between $10 and $15 
C)  all prices between $10 and $20 
D)  all prices below $30

Question 10

If a hot dog vendor on a street corner experiences an increase in total revenue after lowering the price of a hot dog, then the demand for the hot dogs must be elastic.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following items has the largest price elasticity of demand?

Accepted Answer

A)  food 
B)  fruit 
C)  oranges 
D)  oranges from a Wal-Mart SuperCenter 
A)  food 
B)  fruit 
C)  oranges 
D)  oranges from a Wal-Mart SuperCenter

Question 12

The price elasticity of demand for corn is 0.4. A new hybrid of corn is discovered and all farmers start to use it, which increases the quantity of corn they can produce from each acre. What happens to the farmers' total revenue?

Accepted Answer

A)  The total revenue will increase. 
B)  The total revenue will decrease. 
C)  The total revenue will not change. 
D)  There is not enough information to determine what happens to the total revenue. 
A)  The total revenue will increase. 
B)  The total revenue will decrease. 
C)  The total revenue will not change. 
D)  There is not enough information to determine what happens to the total revenue.

Question 13

Sara's Strawberry Market maximizes its total revenue by selling strawberries for $1.25 a basket. At a price of $1.25, you predict that

Accepted Answer

A)  the demand for strawberries is inelastic. 
B)  Sara's sells most of the strawberries that she grows. 
C)  the demand for strawberries is elastic. 
D)  the demand for strawberries is unit elastic. 
A)  the demand for strawberries is inelastic. 
B)  Sara's sells most of the strawberries that she grows. 
C)  the demand for strawberries is elastic. 
D)  the demand for strawberries is unit elastic.

Question 14

When the quantity of coal is measured in kilograms instead of pounds, the demand for coal becomes

Accepted Answer

A)  more elastic. 
B)  less elastic. 
C)  neither more nor less elastic. 
D)  undefined. 
A)  more elastic. 
B)  less elastic. 
C)  neither more nor less elastic. 
D)  undefined.

Question 15

What kind of elasticity is relevant when you are trying to figure out how a price cut by the burger shop next door will affect the demand for your pizza? Explain.

Accepted Answer

The cross elasticity of demand is the re

Question 16

The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in the

Accepted Answer

A)  quantity of oil demanded will result from a 0.5 percent increase in the price of oil. 
B)  quantity of oil demanded will result from a 0.5 percent decrease in the price of oil. 
C)  price of oil will increase the quantity of oil demanded by 0.5 percent. 
D)  price of oil will decrease the quantity of oil demanded by 0.5 percent. 
A)  quantity of oil demanded will result from a 0.5 percent increase in the price of oil. 
B)  quantity of oil demanded will result from a 0.5 percent decrease in the price of oil. 
C)  price of oil will increase the quantity of oil demanded by 0.5 percent. 
D)  price of oil will decrease the quantity of oil demanded by 0.5 percent.

Question 17

The cross elasticity of demand between Coca-Cola and Pepsi-Cola is ________ so that Coke and Pepsi are ________.

Accepted Answer

A)  positive; complements 
B)  positive; substitutes 
C)  negative; normal goods 
D)  negative; substitutes 
A)  positive; complements 
B)  positive; substitutes 
C)  negative; normal goods 
D)  negative; substitutes

Question 18

Producers' total revenue will decrease if

Accepted Answer

A)  income increases and the good is a normal good. 
B)  the price rises and demand is elastic. 
C)  the price rises and demand is inelastic. 
D)  income falls and the good is an inferior good. 
A)  income increases and the good is a normal good. 
B)  the price rises and demand is elastic. 
C)  the price rises and demand is inelastic. 
D)  income falls and the good is an inferior good.

Question 19

A 10 percent decrease in the price of a Pepsi decreases the demand for a Coca-Cola by 50 percent. The cross elasticity of demand between a Pepsi and Coca-Cola is

Accepted Answer

A)  50. 
B)  10. 
C)  5. 
D)  0.20. 
A)  50. 
B)  10. 
C)  5. 
D)  0.20.

Question 20

The elasticity of supply for paintings by Monet is

Accepted Answer

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

A good with a horizontal demand curve has a demand

When the price of perfume changes from $24 to $26, the quantity supplied increases from 100 jars to 150 jars. What is the elasticity of supply of perfume?

-The above table gives the demand schedule for Billy Bob's BBQ ribs. The price elasticity of demand for Billy Bob's ribs over the price range of $3 to $1 is equal to

If the price elasticity of demand for a good is 0.8, then a

If hot dog vendors at baseball games want to maximize their total sales revenue, they will have to

Demand is income elastic if

When the price of milk goes up as a result of a rightward shift of the demand curve for milk, the total revenue collected by milk producers will

Suppose the price elasticity of demand for bouquets of flowers is 4.0. You are charging $8 per bouquet. If you want to increase the quantity of bouquets you sell by 20 percent, what price should you charge?

-The figure illustrates Anne's demand for books. At ________ a book, Anne's demand for books is inelastic.

If a hot dog vendor on a street corner experiences an increase in total revenue after lowering the price of a hot dog, then the demand for the hot dogs must be elastic.

Which of the following items has the largest price elasticity of demand?

The price elasticity of demand for corn is 0.4. A new hybrid of corn is discovered and all farmers start to use it, which increases the quantity of corn they can produce from each acre. What happens to the farmers' total revenue?

Sara's Strawberry Market maximizes its total revenue by selling strawberries for $1.25 a basket. At a price of $1.25, you predict that

When the quantity of coal is measured in kilograms instead of pounds, the demand for coal becomes

What kind of elasticity is relevant when you are trying to figure out how a price cut by the burger shop next door will affect the demand for your pizza? Explain.

The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in the

The cross elasticity of demand between Coca-Cola and Pepsi-Cola is so that Coke and Pepsi are .

Producers' total revenue will decrease if

A 10 percent decrease in the price of a Pepsi decreases the demand for a Coca-Cola by 50 percent. The cross elasticity of demand between a Pepsi and Coca-Cola is

The elasticity of supply for paintings by Monet is

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

A good with a horizontal demand curve has a demand

When the price of perfume changes from $24 to $26, the quantity supplied increases from 100 jars to 150 jars. What is the elasticity of supply of perfume?

-The above table gives the demand schedule for Billy Bob's BBQ ribs. The price elasticity of demand for Billy Bob's ribs over the price range of $3 to $1 is equal to

If the price elasticity of demand for a good is 0.8, then a

If hot dog vendors at baseball games want to maximize their total sales revenue, they will have to

Demand is income elastic if

When the price of milk goes up as a result of a rightward shift of the demand curve for milk, the total revenue collected by milk producers will

Suppose the price elasticity of demand for bouquets of flowers is 4.0. You are charging $8 per bouquet. If you want to increase the quantity of bouquets you sell by 20 percent, what price should you charge?

-The figure illustrates Anne's demand for books. At ________ a book, Anne's demand for books is inelastic.

If a hot dog vendor on a street corner experiences an increase in total revenue after lowering the price of a hot dog, then the demand for the hot dogs must be elastic.

Which of the following items has the largest price elasticity of demand?

The price elasticity of demand for corn is 0.4. A new hybrid of corn is discovered and all farmers start to use it, which increases the quantity of corn they can produce from each acre. What happens to the farmers' total revenue?

Sara's Strawberry Market maximizes its total revenue by selling strawberries for $1.25 a basket. At a price of $1.25, you predict that

When the quantity of coal is measured in kilograms instead of pounds, the demand for coal becomes

What kind of elasticity is relevant when you are trying to figure out how a price cut by the burger shop next door will affect the demand for your pizza? Explain.

The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in the

The cross elasticity of demand between Coca-Cola and Pepsi-Cola is ________ so that Coke and Pepsi are ________.

Producers' total revenue will decrease if

A 10 percent decrease in the price of a Pepsi decreases the demand for a Coca-Cola by 50 percent. The cross elasticity of demand between a Pepsi and Coca-Cola is

The elasticity of supply for paintings by Monet is

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 cross elasticity of demand between Coca-Cola and Pepsi-Cola is so that Coke and Pepsi are .