Question 1

Exhibit 19-7 ​
 
Refer to Exhibit 19-7. Which of the graphs shows a perfectly elastic demand curve?

Accepted Answer

A) (1) 
B) (2) 
C) (3)and (4) 
D) There is not enough information provided to answer this question. 
A) (1) 
B) (2) 
C) (3)and (4) 
D) There is not enough information provided to answer this question.

Question 2

Exhibit 19-7 ​
 
Refer to Exhibit 19-7. As a producer, if you had a choice, which of the depicted markets would you operate in?

Accepted Answer

A) (1) 
B) (2) 
C) (3) 
D) (4) 
A) (1) 
B) (2) 
C) (3) 
D) (4)

Question 3

Suppose that when the price of a good falls from $12 to $9, the quantity demanded of that good rises from 310 units to 350 units.  What is the approximate price elasticity of demand between these two prices?

Accepted Answer

A) 0.42 
B) 2.36 
C) 0.68 
D) 3.80 
E) 1.12 
A) 0.42 
B) 2.36 
C) 0.68 
D) 3.80 
E) 1.12

Question 4

If demand for a given good is perfectly elastic, it follows that

Accepted Answer

A) as price changes, quantity demanded does not change. 
B) as price changes, quantity demanded changes by a larger percentage. 
C) as price changes only a small percentage, quantity demanded falls to zero. 
D) as income changes only a small percentage, quantity demanded changes by a very large percentage. 
A) as price changes, quantity demanded does not change. 
B) as price changes, quantity demanded changes by a larger percentage. 
C) as price changes only a small percentage, quantity demanded falls to zero. 
D) as income changes only a small percentage, quantity demanded changes by a very large percentage.

Question 5

Exhibit 19-8 ​
 
Refer to Exhibit 19-8. The market for good X is initially at point A. A tax is then placed on the production of good X. As a result, the equilibrium price changes to __________, and sellers now receive __________ per unit they sell and they get to keep __________ for each unit they sell.

Accepted Answer

A) $11; $10; $9 
B) $11; $11; $9 
C) $12; $11; $10 
D) $12; $11; $9 
E) $11; $12; $10 
A) $11; $10; $9 
B) $11; $11; $9 
C) $12; $11; $10 
D) $12; $11; $9 
E) $11; $12; $10

Question 6

Exhibit 19-7 ​
 
Refer to Exhibit 19-7. If the government is contemplating imposing a per-unit tax and it wants the tax to have as small a negative effect on consumers as possible, it should choose a good for which the market is depicted on graph

Accepted Answer

A) (1). 
B) (2). 
C) (3). 
D) (4). 
A) (1). 
B) (2). 
C) (3). 
D) (4).

Question 7

If the price of good X falls and the demand for good X is unit elastic, then the percentage rise in quantity demanded is __________ the percentage fall in price, and total revenue __________.

Accepted Answer

A) greater than; rises 
B) less than; falls 
C) equal to; remains constant 
D) greater than; falls 
E) less than; rises 
A) greater than; rises 
B) less than; falls 
C) equal to; remains constant 
D) greater than; falls 
E) less than; rises

Question 8

Exhibit 19-3   Refer to Exhibit 19-3. When price decreases from $3.50 to $2.50, the price elasticity of supply is

Accepted Answer

A) 0. 
B) 1.0. 
C) 5.0. 
D) 0.1. 
E) 0.5. 
A) 0. 
B) 1.0. 
C) 5.0. 
D) 0.1. 
E) 0.5.

Question 9

Exhibit 19-6 ​
 
Refer to Exhibit 19-6. Let S1 be the supply curve of a producer. If S2 is the supply curve of the same producer after the government imposes a per-unit tax, the tax revenue generated will be

Accepted Answer

A) greater if D1 is the demand curve facing the firm. 
B) greater if D2 is the demand curve facing the firm. 
C) the same regardless of which demand curve the firm faces. 
D) less if D1 is the demand curve facing the firm. 
A) greater if D1 is the demand curve facing the firm. 
B) greater if D2 is the demand curve facing the firm. 
C) the same regardless of which demand curve the firm faces. 
D) less if D1 is the demand curve facing the firm.

Question 10

If the demand for cocaine is inelastic and people commit crimes to buy drugs, then a drug bust can increase the amount of drug-related crime.

Accepted Answer

A) True 
 B)False

Question 11

If the supply curve for good X is vertical, then the demand for good X must be perfectly inelastic.

Accepted Answer

A) True 
 B)False

Question 12

Cross elasticity of demand measures consumer responsiveness to a change in the price of one good, in terms of the quantity demanded of some other good.

Accepted Answer

A) True 
 B)False

Question 13

If a small increase in the price of a good reduces quantity demanded to zero, demand is ________________ and the price elasticity of demand is equal to _______________.

Accepted Answer

A) perfectly inelastic; zero 
B) perfectly elastic; infinity 
C) unit elastic; one 
D) perfectly elastic; zero 
A) perfectly inelastic; zero 
B) perfectly elastic; infinity 
C) unit elastic; one 
D) perfectly elastic; zero

Question 14

Exhibit 19-2 ​
 
Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S1 to S2. What is the per-unit tax equal to?

Accepted Answer

A) $1.00 
B) $2.25 
C) $0.25 
D) $4.00 
E) $1.25 
A) $1.00 
B) $2.25 
C) $0.25 
D) $4.00 
E) $1.25

Question 15

What does price elasticity of supply measure?  Explain the relationship that exists between price elasticity of supply and the length of time sellers have to adjust to the price change.

Accepted Answer

Price elasticity of supply measures the

Question 16

Exhibit 19-3   Refer to Exhibit 19-3. When price decreases from $1.50 to $0.50, the price elasticity of supply is

Accepted Answer

A) 0. 
B) 1.0. 
C) 5.0. 
D) 0.1. 
E) 0.5. 
A) 0. 
B) 1.0. 
C) 5.0. 
D) 0.1. 
E) 0.5.

Question 17

Demand for a given good is elastic, which means that the percentage change in __________ is greater than the percentage change in __________.

Accepted Answer

A) quantity demanded; income 
B) quantity demanded; price 
C) price; quantity demanded 
D) income; price 
A) quantity demanded; income 
B) quantity demanded; price 
C) price; quantity demanded 
D) income; price

Question 18

Exhibit 19-9 ​
 
Refer to Exhibit 19-9.  What is the price elasticity of supply between $2 and $4?

Accepted Answer

A) 2.0 
B) 0.75 
C) 1.33 
D) 0.50 
A) 2.0 
B) 0.75 
C) 1.33 
D) 0.50

Question 19

When a good is perfectly inelastic in demand, or perfectly elastic in supply, the buyers will pay the full tax that is placed on the sellers.

Accepted Answer

A) True 
 B)False

Question 20

If the percentage change in quantity demanded is equal to the percentage change in price for good Z,  then demand for good Z is

Accepted Answer

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

Exam 6: Elasticity

Exhibit 19-7 ​ Refer to Exhibit 19-7. Which of the graphs shows a perfectly elastic demand curve?

Exhibit 19-7 ​ Refer to Exhibit 19-7. As a producer, if you had a choice, which of the depicted markets would you operate in?

Suppose that when the price of a good falls from $12 to $9, the quantity demanded of that good rises from 310 units to 350 units. What is the approximate price elasticity of demand between these two prices?

If demand for a given good is perfectly elastic, it follows that

Exhibit 19-7 ​ Refer to Exhibit 19-7. If the government is contemplating imposing a per-unit tax and it wants the tax to have as small a negative effect on consumers as possible, it should choose a good for which the market is depicted on graph

If the price of good X falls and the demand for good X is unit elastic, then the percentage rise in quantity demanded is __________ the percentage fall in price, and total revenue __________.

Exhibit 19-3 Refer to Exhibit 19-3. When price decreases from $3.50 to $2.50, the price elasticity of supply is

Exhibit 19-6 ​ Refer to Exhibit 19-6. Let S1 be the supply curve of a producer. If S2 is the supply curve of the same producer after the government imposes a per-unit tax, the tax revenue generated will be

If the demand for cocaine is inelastic and people commit crimes to buy drugs, then a drug bust can increase the amount of drug-related crime.

If the supply curve for good X is vertical, then the demand for good X must be perfectly inelastic.

Cross elasticity of demand measures consumer responsiveness to a change in the price of one good, in terms of the quantity demanded of some other good.

If a small increase in the price of a good reduces quantity demanded to zero, demand is ________________ and the price elasticity of demand is equal to _______________.

Exhibit 19-2 ​ Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S1 to S2. What is the per-unit tax equal to?

What does price elasticity of supply measure? Explain the relationship that exists between price elasticity of supply and the length of time sellers have to adjust to the price change.

Exhibit 19-3 Refer to Exhibit 19-3. When price decreases from $1.50 to $0.50, the price elasticity of supply is

Demand for a given good is elastic, which means that the percentage change in __________ is greater than the percentage change in __________.

Exhibit 19-9 ​ Refer to Exhibit 19-9. What is the price elasticity of supply between $2 and $4?

When a good is perfectly inelastic in demand, or perfectly elastic in supply, the buyers will pay the full tax that is placed on the sellers.

If the percentage change in quantity demanded is equal to the percentage change in price for good Z, then demand for good Z is

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages, Union, and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Filters

Exhibit 19-7 Refer to Exhibit 19-7. Which of the graphs shows a perfectly elastic demand curve?

Exhibit 19-7 Refer to Exhibit 19-7. As a producer, if you had a choice, which of the depicted markets would you operate in?

Exhibit 19-7 Refer to Exhibit 19-7. If the government is contemplating imposing a per-unit tax and it wants the tax to have as small a negative effect on consumers as possible, it should choose a good for which the market is depicted on graph

If the price of good X falls and the demand for good X is unit elastic, then the percentage rise in quantity demanded is the percentage fall in price, and total revenue .

Exhibit 19-6 Refer to Exhibit 19-6. Let S₁ be the supply curve of a producer. If S₂ is the supply curve of the same producer after the government imposes a per-unit tax, the tax revenue generated will be

If a small increase in the price of a good reduces quantity demanded to zero, demand is __ and the price elasticity of demand is equal to _.

Exhibit 19-2 Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. What is the per-unit tax equal to?

Demand for a given good is elastic, which means that the percentage change in is greater than the percentage change in .

Exhibit 19-9 Refer to Exhibit 19-9. What is the price elasticity of supply between $2 and $4?