Question 1

The price elasticity of demand for gasoline measures the

Accepted Answer

A)  responsiveness of gasoline producers to changes in the quality of gasoline. 
B)  responsiveness of customers to changes in the price of gasoline. 
C)  responsiveness of consumer preferences to changes in the quality of gasoline. 
D)  both a and c above. 
A)  responsiveness of gasoline producers to changes in the quality of gasoline. 
B)  responsiveness of customers to changes in the price of gasoline. 
C)  responsiveness of consumer preferences to changes in the quality of gasoline. 
D)  both a and c above.

Question 2

A 15 percent increase in the price of beef reduces the quantity of beef consumed by 30 percent. Thus, the demand for beef is ____, and total consumer expenditure (or total firm revenue) will ____ as a result of the price increase. (Fill in the blanks.)

Accepted Answer

A)  elastic; increase 
B)  elastic; decrease 
C)  inelastic; increase 
D)  inelastic; decrease 
A)  elastic; increase 
B)  elastic; decrease 
C)  inelastic; increase 
D)  inelastic; decrease

Question 3

If the price of gasoline goes up, and Dan now buys fewer candy bars because he has to spend more on gas, this would best be explained by

Accepted Answer

A)  the substitution effect. 
B)  the income effect. 
C)  the highly elastic demand for gasoline. 
D)  all of the above. 
A)  the substitution effect. 
B)  the income effect. 
C)  the highly elastic demand for gasoline. 
D)  all of the above.

The price elasticity of demand for gasoline measures the

A 15 percent increase in the price of beef reduces the quantity of beef consumed by 30 percent. Thus, the demand for beef is , and total consumer expenditure (or total firm revenue) will as a result of the price increase. (Fill in the blanks.)

If the price of gasoline goes up, and Dan now buys fewer candy bars because he has to spend more on gas, this would best be explained by

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters

Exam 7: Consumer Choice and Elasticity

The price elasticity of demand for gasoline measures the

A 15 percent increase in the price of beef reduces the quantity of beef consumed by 30 percent. Thus, the demand for beef is ____, and total consumer expenditure (or total firm revenue) will ____ as a result of the price increase. (Fill in the blanks.)

If the price of gasoline goes up, and Dan now buys fewer candy bars because he has to spend more on gas, this would best be explained by

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters

A 15 percent increase in the price of beef reduces the quantity of beef consumed by 30 percent. Thus, the demand for beef is , and total consumer expenditure (or total firm revenue) will as a result of the price increase. (Fill in the blanks.)