Question 1

The demand curve for physician office visits is quite inelastic;therefore, a:

Accepted Answer

A) large increase in price causes quantity demanded to decrease by very little. 
B) large decrease in price causes quantity demanded to decrease by a lot. 
C) small increase in price causes quantity demanded to decrease by a lot. 
D) small decrease in price causes quantity demanded to decrease by very little. 
A) large increase in price causes quantity demanded to decrease by very little. 
B) large decrease in price causes quantity demanded to decrease by a lot. 
C) small increase in price causes quantity demanded to decrease by a lot. 
D) small decrease in price causes quantity demanded to decrease by very little.

Question 2

Figure: Slave Redemption and Elasticity   (Figure: Slave Redemption and Elasticity) Refer to the figure.How many slaves are freed after the redemption program?

Accepted Answer

A) 1,000 
B) 400 
C) 600 
D) 1,400 
A) 1,000 
B) 400 
C) 600 
D) 1,400

Question 3

If the elasticity of demand for cigarettes is 0.75 and theelasticity of supply for cigarettes is 1.25, then a 5 percentdecrease in the demand for cigarettes would cause the price ofcigarettes to:

Accepted Answer

A) increase by 2.5 percent. 
B) increase by 5 percent. 
C) decrease by 2.5 percent. 
D) decrease by 5 percent. 
A) increase by 2.5 percent. 
B) increase by 5 percent. 
C) decrease by 2.5 percent. 
D) decrease by 5 percent.

Question 4

The demand curve is inelastic if the absolute value of theelasticity is:

Accepted Answer

A) greater than 1. 
B) greater than 0. 
C) less than 1. 
D) equal to 1. 
A) greater than 1. 
B) greater than 0. 
C) less than 1. 
D) equal to 1.

Question 5

Demand for necessities is inelastic, while demand for luxuries iselastic.

Accepted Answer

A) True 
 B)False

Question 6

The price of cigars is $10, with a quantity demanded of 1,000per day. If the price increases to $12, the quantity demandeddeclines to 800 per day. What is the absolute value of elasticityof demand?

Accepted Answer

A) 1.00 
B) 0.82 
C) 1.22 
D) 12.2 
A) 1.00 
B) 0.82 
C) 1.22 
D) 12.2

Question 7

When a good has fewer substitutes in consumption, is a smallpart of the consumer's budget, and a long time passes, demandfor such a good is inelastic.

Accepted Answer

A) True 
 B)False

Question 8

Accepted Answer

A) 1.25. 
B) 2.5. 
C) 0.75. 
D) 4/5. 
A) 1.25. 
B) 2.5. 
C) 0.75. 
D) 4/5.

Question 9

If the elasticity of demand for oil is 0.5 and the elasticity ofsupply for oil is 0.3, then a 1 percent increase in the supply ofoil would cause the price of oil to:

Accepted Answer

A) increase by 1.25 percent. 
B) increase by 2.50 percent. 
C) decrease by 1.25 percent. 
D) decrease by 2.50 percent. 
A) increase by 1.25 percent. 
B) increase by 2.50 percent. 
C) decrease by 1.25 percent. 
D) decrease by 2.50 percent.

Question 10

A cross-price elasticity value that is positive will always indicategoods that are substitutes.

Accepted Answer

A) True 
 B)False

Question 11

The demand curve for computer chips is inelastic so revenuesfor the computer chip industry have increased with a decreasein the price of computer chips.

Accepted Answer

A) True 
 B)False

Question 12

If the price of cocoa rises by 10 percent and the elasticity ofsupply is 0.5, then the quantity supplied:

Accepted Answer

A) increases by 5 percent. 
B) increases by 20 percent. 
C) decreases by 5 percent. 
D) decreases by 20 percent. 
A) increases by 5 percent. 
B) increases by 20 percent. 
C) decreases by 5 percent. 
D) decreases by 20 percent.

Question 13

Accepted Answer

A) Supply Curve A 
B) Supply Curve B 
C) Supply Curve C 
D) Supply Curve D 
A) Supply Curve A 
B) Supply Curve B 
C) Supply Curve C 
D) Supply Curve D

Question 14

The supply curve for oil is ________ because ________.

Accepted Answer

A) elastic; per unit costs do not increase when the quantity supplied increases 
B) elastic; oil exploration and drilling is not expensive relative to revenues earned 
C) inelastic; per-unit costs rise quickly when the quantity supplied increases 
D) inelastic; oil exploration and drilling is not expensive relative to revenues earned 
A) elastic; per unit costs do not increase when the quantity supplied increases 
B) elastic; oil exploration and drilling is not expensive relative to revenues earned 
C) inelastic; per-unit costs rise quickly when the quantity supplied increases 
D) inelastic; oil exploration and drilling is not expensive relative to revenues earned

Question 15

The elasticity of demand:

Accepted Answer

A) equals the inverse of price to quantity demanded. 
B) measures how far the demand curve shifts from a change in price. 
C) tells us how responsive consumer purchases are to price changes. 
D) estimates the relationship between quantity demand and production costs. 
A) equals the inverse of price to quantity demanded. 
B) measures how far the demand curve shifts from a change in price. 
C) tells us how responsive consumer purchases are to price changes. 
D) estimates the relationship between quantity demand and production costs.

Question 16

Increases in farm productivity have lowered the prices of manyagricultural products. Farm revenues decreased, which impliesthe:

Accepted Answer

A) demand for many agricultural products is inelastic.(True Answer )Correct 
B) costs of production increased. 
C) demand for many agricultural products is elastic. 
D) costs of production stayed the same. 
A) demand for many agricultural products is inelastic.(True Answer )Correct 
B) costs of production increased. 
C) demand for many agricultural products is elastic. 
D) costs of production stayed the same.

Question 17

Why is the demand curve for oil rather inelastic?

Accepted Answer

A) There are few widely available good substitutes for oil.(True Answer )Correct 
B) To increase the production of oil requires a significant outlay of exploration and drilling costs. 
C) The world supply of oil is low relative to demand. 
D) The demand curve for oil is always perfectly inelastic. 
A) There are few widely available good substitutes for oil.(True Answer )Correct 
B) To increase the production of oil requires a significant outlay of exploration and drilling costs. 
C) The world supply of oil is low relative to demand. 
D) The demand curve for oil is always perfectly inelastic.

Question 18

The price of Good B increases by 4 percent, causing thequantity demanded of Good A to decrease by 6 percent. Thecross-price elasticity of demand is ________, and the goods are________.

Accepted Answer

A) 1.5; substitutes 
B) -1.5; complements 
C) 0.67; complements 
D) -0.67; substitutes 
A) 1.5; substitutes 
B) -1.5; complements 
C) 0.67; complements 
D) -0.67; substitutes

Question 19

Which of the following factors causes a demand curve tobecome more elastic over time?

Accepted Answer

A) New substitutes for the product are discovered.(True Answer )Correct 
B) New and important uses for the product are discovered. 
C) More producers begin to produce the product. 
D) More consumers acquire a desire for the product. 
A) New substitutes for the product are discovered.(True Answer )Correct 
B) New and important uses for the product are discovered. 
C) More producers begin to produce the product. 
D) More consumers acquire a desire for the product.

Question 20

(Figure: Price Decrease and Elasticity) Refer to the figure. Ifprice decreases from $20 to $10, total revenue will:Figure: Price Decrease and Elasticity

Accepted Answer

A) decrease by $1,500, so the demand curve is inelastic. 
B) decrease by $2,500, so the demand curve is inelastic. 
C) increase by $1,500, so the demand curve is elastic.(True Answer )Correct 
D) increase by $2,500, so the demand curve is elastic. 
A) decrease by $1,500, so the demand curve is inelastic. 
B) decrease by $2,500, so the demand curve is inelastic. 
C) increase by $1,500, so the demand curve is elastic.(True Answer )Correct 
D) increase by $2,500, so the demand curve is elastic.

The demand curve for physician office visits is quite inelastic;therefore, a:

Figure: Slave Redemption and Elasticity (Figure: Slave Redemption and Elasticity) Refer to the figure.How many slaves are freed after the redemption program?

If the elasticity of demand for cigarettes is 0.75 and theelasticity of supply for cigarettes is 1.25, then a 5 percentdecrease in the demand for cigarettes would cause the price ofcigarettes to:

The demand curve is inelastic if the absolute value of theelasticity is:

Demand for necessities is inelastic, while demand for luxuries iselastic.

The price of cigars is $10, with a quantity demanded of 1,000per day. If the price increases to $12, the quantity demandeddeclines to 800 per day. What is the absolute value of elasticityof demand?

When a good has fewer substitutes in consumption, is a smallpart of the consumer's budget, and a long time passes, demandfor such a good is inelastic.

If the elasticity of demand for oil is 0.5 and the elasticity ofsupply for oil is 0.3, then a 1 percent increase in the supply ofoil would cause the price of oil to:

A cross-price elasticity value that is positive will always indicategoods that are substitutes.

The demand curve for computer chips is inelastic so revenuesfor the computer chip industry have increased with a decreasein the price of computer chips.

If the price of cocoa rises by 10 percent and the elasticity ofsupply is 0.5, then the quantity supplied:

The supply curve for oil is because .

The elasticity of demand:

Increases in farm productivity have lowered the prices of manyagricultural products. Farm revenues decreased, which impliesthe:

Why is the demand curve for oil rather inelastic?

The price of Good B increases by 4 percent, causing thequantity demanded of Good A to decrease by 6 percent. Thecross-price elasticity of demand is , and the goods are.

Which of the following factors causes a demand curve tobecome more elastic over time?

(Figure: Price Decrease and Elasticity) Refer to the figure. Ifprice decreases from $20 to $10, total revenue will:Figure: Price Decrease and Elasticity

Welcome to Economics

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Consumer Choices

Production, Costs, and Industry Structure

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Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

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Exam 5: Elasticity

The demand curve for physician office visits is quite inelastic;therefore, a:

Figure: Slave Redemption and Elasticity (Figure: Slave Redemption and Elasticity) Refer to the figure.How many slaves are freed after the redemption program?

If the elasticity of demand for cigarettes is 0.75 and theelasticity of supply for cigarettes is 1.25, then a 5 percentdecrease in the demand for cigarettes would cause the price ofcigarettes to:

The demand curve is inelastic if the absolute value of theelasticity is:

Demand for necessities is inelastic, while demand for luxuries iselastic.

The price of cigars is $10, with a quantity demanded of 1,000per day. If the price increases to $12, the quantity demandeddeclines to 800 per day. What is the absolute value of elasticityof demand?

When a good has fewer substitutes in consumption, is a smallpart of the consumer's budget, and a long time passes, demandfor such a good is inelastic.

If the elasticity of demand for oil is 0.5 and the elasticity ofsupply for oil is 0.3, then a 1 percent increase in the supply ofoil would cause the price of oil to:

A cross-price elasticity value that is positive will always indicategoods that are substitutes.

The demand curve for computer chips is inelastic so revenuesfor the computer chip industry have increased with a decreasein the price of computer chips.

If the price of cocoa rises by 10 percent and the elasticity ofsupply is 0.5, then the quantity supplied:

The supply curve for oil is ________ because ________.

The elasticity of demand:

Increases in farm productivity have lowered the prices of manyagricultural products. Farm revenues decreased, which impliesthe:

Why is the demand curve for oil rather inelastic?

The price of Good B increases by 4 percent, causing thequantity demanded of Good A to decrease by 6 percent. Thecross-price elasticity of demand is ________, and the goods are________.

Which of the following factors causes a demand curve tobecome more elastic over time?

(Figure: Price Decrease and Elasticity) Refer to the figure. Ifprice decreases from $20 to $10, total revenue will:Figure: Price Decrease and Elasticity

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Consumer Choices

Production, Costs, and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Labor Markets and Income

Poverty and Economic Inequality

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Consumer Utility and Optimization

Filters

The supply curve for oil is because .

The price of Good B increases by 4 percent, causing thequantity demanded of Good A to decrease by 6 percent. Thecross-price elasticity of demand is , and the goods are.