Question 1

Which of the following statements is false ?

Accepted Answer

A) If the income elasticity of demand for a good is less than 1, the demand for the good is income inelastic. 
B) If the income elasticity of demand for a good is greater than 1, the demand for the good is income elastic. 
C) If the income elasticity of demand for a good is equal to 1, the demand for the good is income unit elastic. 
D) If the income elasticity of demand for a good is less than zero, the good is a normal good. 
E) A good can be both a normal good and income inelastic. 
A) If the income elasticity of demand for a good is less than 1, the demand for the good is income inelastic. 
B) If the income elasticity of demand for a good is greater than 1, the demand for the good is income elastic. 
C) If the income elasticity of demand for a good is equal to 1, the demand for the good is income unit elastic. 
D) If the income elasticity of demand for a good is less than zero, the good is a normal good. 
E) A good can be both a normal good and income inelastic.

Question 2

If the percentage change in quantity supplied is greater than the percentage change in price, then supply is elastic.

Accepted Answer

A) True 
 B)False

Question 3

Exhibit 19-1 ​
 
Refer to Exhibit 19-l. The demand for the good represented by demand curve D2 is

Accepted Answer

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

Question 4

Describe what cross elasticity of demand measures. Be specific in your response.

Accepted Answer

Cross elasticity of demand shows the res

Question 5

The quantity demanded of good A rises as income rises. It follows that income elasticity of demand is __________than 0, and good A is a(n)__________ good.

Accepted Answer

A) greater; inferior 
B) greater; normal 
C) greater; substitute 
D) greater; complementary 
E) less; normal 
A) greater; inferior 
B) greater; normal 
C) greater; substitute 
D) greater; complementary 
E) less; normal

Question 6

Price elasticity of supply is perfectly inelastic if the coefficient of price elasticity of supply is

Accepted Answer

A) infinity. 
B) 1. 
C) 0. 
D) -1. 
A) infinity. 
B) 1. 
C) 0. 
D) -1.

Question 7

If the percentage change in quantity demanded of a good is equal to the percentage change in buyer's income, then the good is said to be

Accepted Answer

A) income elastic. 
B) income inelastic. 
C) income unit elastic. 
D) price unit elastic. 
E) price inelastic. 
A) income elastic. 
B) income inelastic. 
C) income unit elastic. 
D) price unit elastic. 
E) price inelastic.

Question 8

Consumers will pay the full tax that is placed on the sellers of a good if demand is __________ or supply is __________.

Accepted Answer

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

Question 9

Exhibit 19-9 ​
 
Refer to Exhibit 19-9.  What is the price elasticity of demand between $4 and $6?

Accepted Answer

A) 0.825 
B) 0.833 
C) 1.25 
D) 1.20 
A) 0.825 
B) 0.833 
C) 1.25 
D) 1.20

Question 10

If the percentage change in quantity demanded is less than the percentage change in price for good Y, then the demand for good Y is

Accepted Answer

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

Question 11

The quantity demanded of good A changes from 100 to 111 when the price of good A changes from $9 to $8. The cross elasticity of demand is

Accepted Answer

A) 1.20. 
B) -1.13. 
C) 2.20. 
D) -0.89. 
E) There is not enough information to answer the question. 
A) 1.20. 
B) -1.13. 
C) 2.20. 
D) -0.89. 
E) There is not enough information to answer the question.

Question 12

If goods A and B have a cross elasticity of demand that is positive, this is evidence that goods A and B are __________ goods.

Accepted Answer

A) complementary 
B) substitute 
C) normal 
D) inferior 
A) complementary 
B) substitute 
C) normal 
D) inferior

Question 13

If the demand for a good is perfectly inelastic, then

Accepted Answer

A) the percentage change in quantity demanded is greater than the percentage change in price. 
B) the percentage change in quantity demanded is less than the percentage change in price. 
C) the percentage change in quantity demanded is equal to the percentage change in price. 
D) quantity demanded is extremely responsive to changes in price. 
E) quantity demanded is not responsive to changes in price. 
A) the percentage change in quantity demanded is greater than the percentage change in price. 
B) the percentage change in quantity demanded is less than the percentage change in price. 
C) the percentage change in quantity demanded is equal to the percentage change in price. 
D) quantity demanded is extremely responsive to changes in price. 
E) quantity demanded is not responsive to changes in price.

Question 14

Price elasticity of supply and price elasticity of demand are likely to be __________ in the __________ than in the __________.

Accepted Answer

A) higher; short run; long run 
B) lower; long run; short run 
C) higher; long run; short run 
D) lower; past; future 
E) higher; past; future 
A) higher; short run; long run 
B) lower; long run; short run 
C) higher; long run; short run 
D) lower; past; future 
E) higher; past; future

Question 15

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 an expression for the tax revenue raised?

Accepted Answer

A) $2.25 x Q2 
B) $1.25 x Q2 
C) $1.00 x Q2 
D) ($1.00 x Q2)+ [$1.25 x (Q1 - Q2)] 
E) $2.25 x (Q1 - Q2) 
A) $2.25 x Q2 
B) $1.25 x Q2 
C) $1.00 x Q2 
D) ($1.00 x Q2)+ [$1.25 x (Q1 - Q2)] 
E) $2.25 x (Q1 - Q2)

Question 16

Exhibit 19-1 ​
 
Refer to Exhibit 19-l. The demand for the good represented by demand curve D3 is

Accepted Answer

A) inelastic. 
B) elastic. 
C) unit elastic. 
D) perfectly elastic. 
E) more elastic at higher prices than at lower prices. 
A) inelastic. 
B) elastic. 
C) unit elastic. 
D) perfectly elastic. 
E) more elastic at higher prices than at lower prices.

Question 17

If the demand for a good is unit elastic, then

Accepted Answer

A) the percentage change in quantity demanded is greater than the percentage change in price. 
B) the percentage change in quantity demanded is less than the percentage change in price. 
C) the percentage change in quantity demanded is equal to the percentage change in price. 
D) quantity demanded is extremely responsive to changes in price. 
E) quantity demanded is not responsive to changes in price. 
A) the percentage change in quantity demanded is greater than the percentage change in price. 
B) the percentage change in quantity demanded is less than the percentage change in price. 
C) the percentage change in quantity demanded is equal to the percentage change in price. 
D) quantity demanded is extremely responsive to changes in price. 
E) quantity demanded is not responsive to changes in price.

Question 18

If supply is inelastic, it follows that

Accepted Answer

A) an increase in price will not change quantity supplied. 
B) a decrease in price will not change quantity supplied. 
C) consumers will pay 100 percent of any tax placed on sellers. 
D) for any given percentage increase in price, quantity supplied will increase by a relatively greater percentage. 
E) for any given percentage increase in price, quantity supplied will increase by a relatively smaller percentage. 
A) an increase in price will not change quantity supplied. 
B) a decrease in price will not change quantity supplied. 
C) consumers will pay 100 percent of any tax placed on sellers. 
D) for any given percentage increase in price, quantity supplied will increase by a relatively greater percentage. 
E) for any given percentage increase in price, quantity supplied will increase by a relatively smaller percentage.

Question 19

The price elasticity of demand tends to be higher for goods

Accepted Answer

A) for which the consumer spends a high percentage of his or her income. 
B) for which the consumer spends a low percentage of his or her income. 
C) that are in abundant supply. 
D) that are in scarce supply. 
A) for which the consumer spends a high percentage of his or her income. 
B) for which the consumer spends a low percentage of his or her income. 
C) that are in abundant supply. 
D) that are in scarce supply.

Question 20

If supply is perfectly inelastic, it follows that a

Accepted Answer

A) rise in price will not change quantity supplied. 
B) fall in price will not change quantity demanded. 
C) rise in price will change quantity supplied by more than a fall in price. 
D) fall in price will change quantity supplied by more than a rise in price. 
A) rise in price will not change quantity supplied. 
B) fall in price will not change quantity demanded. 
C) rise in price will change quantity supplied by more than a fall in price. 
D) fall in price will change quantity supplied by more than a rise in price.

Exam 6: Elasticity

Which of the following statements is false ?

If the percentage change in quantity supplied is greater than the percentage change in price, then supply is elastic.

Exhibit 19-1 ​ Refer to Exhibit 19-l. The demand for the good represented by demand curve D2 is

Describe what cross elasticity of demand measures. Be specific in your response.

The quantity demanded of good A rises as income rises. It follows that income elasticity of demand is __________than 0, and good A is a(n)__________ good.

Price elasticity of supply is perfectly inelastic if the coefficient of price elasticity of supply is

If the percentage change in quantity demanded of a good is equal to the percentage change in buyer's income, then the good is said to be

Consumers will pay the full tax that is placed on the sellers of a good if demand is __________ or supply is __________.

Exhibit 19-9 ​ Refer to Exhibit 19-9. What is the price elasticity of demand between $4 and $6?

If the percentage change in quantity demanded is less than the percentage change in price for good Y, then the demand for good Y is

The quantity demanded of good A changes from 100 to 111 when the price of good A changes from $9 to $8. The cross elasticity of demand is

If goods A and B have a cross elasticity of demand that is positive, this is evidence that goods A and B are __________ goods.

If the demand for a good is perfectly inelastic, then

Price elasticity of supply and price elasticity of demand are likely to be __________ in the __________ than in the __________.

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 an expression for the tax revenue raised?

Exhibit 19-1 ​ Refer to Exhibit 19-l. The demand for the good represented by demand curve D3 is

If the demand for a good is unit elastic, then

If supply is inelastic, it follows that

The price elasticity of demand tends to be higher for goods

If supply is perfectly inelastic, it follows that a

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 19-1 Refer to Exhibit 19-l. The demand for the good represented by demand curve D₂ is

The quantity demanded of good A rises as income rises. It follows that income elasticity of demand is than 0, and good A is a(n) good.

Consumers will pay the full tax that is placed on the sellers of a good if demand is or supply is .

Exhibit 19-9 Refer to Exhibit 19-9. What is the price elasticity of demand between $4 and $6?

Price elasticity of supply and price elasticity of demand are likely to be in the than in the __.

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 an expression for the tax revenue raised?

Exhibit 19-1 Refer to Exhibit 19-l. The demand for the good represented by demand curve D₃ is