Question 1

Using the midpoint method,if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to $238,the percentage change in price is

Accepted Answer

A)  1442 percent. 
B)  14.42 percent. 
C)  15.54 percent. 
D)  13.45 percent. 
E)  68.00 percent. 
A)  1442 percent. 
B)  14.42 percent. 
C)  15.54 percent. 
D)  13.45 percent. 
E)  68.00 percent.

Question 2

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per pizza) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (pizzas per day) }
\end{array} \
\hline 10 & 100 \
9 & 125
\end{array}$$
-The data in the table above give two points on the demand curve for pizza.Using the midpoint method,when the price of a pizza falls from $10 to $9,what is the percentage change in the quantity demanded?

Accepted Answer

A)  22.2 percent 
B)  10.0 percent 
C)  15.5 percent 
D)  5.2 percent 
E)  25 percent 
A)  22.2 percent 
B)  10.0 percent 
C)  15.5 percent 
D)  5.2 percent 
E)  25 percent

Question 3

-In the figure above,using the midpoint method,the price elasticity of demand when the price falls from $6 to $5 is equal to

Accepted Answer

A)  2.50. 
B)  1.63. 
C)  1.10. 
D)  0.91. 
E)  1.00. 
A)  2.50. 
B)  1.63. 
C)  1.10. 
D)  0.91. 
E)  1.00.

Question 4

Goods that can be produced at a constant or very gently rising opportunity cost have

Accepted Answer

A)  an elastic demand. 
B)  an inelastic demand. 
C)  an inelastic supply. 
D)  an elastic supply. 
E)  a unit elastic demand. 
A)  an elastic demand. 
B)  an inelastic demand. 
C)  an inelastic supply. 
D)  an elastic supply. 
E)  a unit elastic demand.

Question 5

If a 2 percent change in price leads to a ________ percent change in the quantity demanded,then demand is ________.

Accepted Answer

A)  2; elastic 
B)  1; unit elastic 
C)  3; inelastic 
D)  1; inelastic 
E)  0; perfectly elastic 
A)  2; elastic 
B)  1; unit elastic 
C)  3; inelastic 
D)  1; inelastic 
E)  0; perfectly elastic

Question 6

$\begin{array}{c}
\begin{array}{c}
\text {Price}\
\text {(dollars per cake)}\
\hline 2\
4
\end{array}
\begin{array}{c}
\text {Quantity demanded}\
\text { (gallons of ice cream per week)}\
\hline 10\
6
\end{array}
\end{array}$

-Based on data in the table above,use the midpoint method to determine the cross elasticity of demand for ice cream and cake.

Accepted Answer

A)  The cross elasticity is -0.75. 
B)  The cross elasticity is -1.75. 
C)  The cross elasticity is -0.83. 
D)  The cross elasticity is -4.0. 
E)  The cross elasticity is -1.33. 
A)  The cross elasticity is -0.75. 
B)  The cross elasticity is -1.75. 
C)  The cross elasticity is -0.83. 
D)  The cross elasticity is -4.0. 
E)  The cross elasticity is -1.33.

Question 7

The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ and all other influences on buyers' plans remain the same.

Accepted Answer

A)  income changes 
B)  the price of a related good changes 
C)  the price of the good changes 
D)  the demand alone changes 
E)  both the demand and the supply simultaneously change 
A)  income changes 
B)  the price of a related good changes 
C)  the price of the good changes 
D)  the demand alone changes 
E)  both the demand and the supply simultaneously change

Question 8

If the percentage change in quantity demanded is greater than the percentage change in price,can you determine if the demand is elastic,unit elastic,or inelastic? Explain your answer.

Accepted Answer

The demand is elastic.The formula for th

Question 9

Suppose the demand for rescue services in our national parks is perfectly inelastic.This fact would mean that a 31 percent increase in rescue fees leads to

Accepted Answer

A)  a 31 percent decrease in the quantity demanded. 
B)  a 31 percent increase in demand. 
C)  a 31 percent decrease in demand. 
D)  no change in the quantity demanded. 
E)  a decrease in the quantity demanded to 0 rescues. 
A)  a 31 percent decrease in the quantity demanded. 
B)  a 31 percent increase in demand. 
C)  a 31 percent decrease in demand. 
D)  no change in the quantity demanded. 
E)  a decrease in the quantity demanded to 0 rescues.

Question 10

If the price of a good rises,then moving along a demand curve the percentage change in the quantity demanded will be

Accepted Answer

A)  positive. 
B)  negative. 
C)  zero. 
D)  either positive, negative, or zero depending on how the demand curve shifted. 
E)  undefined. 
A)  positive. 
B)  negative. 
C)  zero. 
D)  either positive, negative, or zero depending on how the demand curve shifted. 
E)  undefined.

Question 11

If,when the price falls,total revenue increases,demand is

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  unit elastic. 
D)  perfectly inelastic. 
E)  None of the above answers is correct because total revenue always decreases when the price of the good falls. 
A)  elastic. 
B)  inelastic. 
C)  unit elastic. 
D)  perfectly inelastic. 
E)  None of the above answers is correct because total revenue always decreases when the price of the good falls.

Question 12

If the price of corn increases by 20 percent and the quantity supplied of corn increases by 30 percent,then supply is

Accepted Answer

A)  elastic and the elasticity of supply equals 1.5. 
B)  inelastic and the elasticity of supply equals 1.5. 
C)  elastic and the elasticity of supply equals 0.66. 
D)  inelastic and the elasticity of supply equals 0.66. 
E)  either elastic or inelastic, but more information about the elasticity of demand is needed to determine which. 
A)  elastic and the elasticity of supply equals 1.5. 
B)  inelastic and the elasticity of supply equals 1.5. 
C)  elastic and the elasticity of supply equals 0.66. 
D)  inelastic and the elasticity of supply equals 0.66. 
E)  either elastic or inelastic, but more information about the elasticity of demand is needed to determine which.

Question 13

Assume that it is predicted that for the years after you graduate from college,the entire economy will experience a long period of prosperity when incomes grow rapidly.What type of industry would be the best for you to find employment if this prediction is correct? An industry that produces a product that is

Accepted Answer

A)  income elastic. 
B)  income inelastic. 
C)  inferior. 
D)  a substitute good. 
E)  none of these industries 
A)  income elastic. 
B)  income inelastic. 
C)  inferior. 
D)  a substitute good. 
E)  none of these industries

Question 14

If a good has only a few,poor substitutes,is its demand elastic or inelastic?

Accepted Answer

The demand is inelastic.The fe

Question 15

When a firm raises the price of its product,what happens to its total revenue?

Accepted Answer

A)  If demand is elastic, total revenue decreases. 
B)  If demand is unit elastic, total revenue increases. 
C)  If demand is inelastic, total revenue decreases. 
D)  If demand is elastic, total revenue increases. 
E)  If demand is unit elastic, total revenue decreases. 
A)  If demand is elastic, total revenue decreases. 
B)  If demand is unit elastic, total revenue increases. 
C)  If demand is inelastic, total revenue decreases. 
D)  If demand is elastic, total revenue increases. 
E)  If demand is unit elastic, total revenue decreases.

Question 16

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Total revenue } \
\text { (dollars) }
\end{array} \
\hline 1.00 & 110 \
1.25 & 125 \
1.50 & 125 \
1.75 & 100 \
\hline
\end{array}$$
-Steve sells hotdogs from a vending cart downtown.The table above shows his daily total revenues at four different prices.Between which two prices is the demand for hotdogs
a.elastic?
b.unit elastic?
c.inelastic?

Accepted Answer

a.Steve's demand is elastic between $1.5

Question 17

We calculate the price elasticity of demand as the

Accepted Answer

A)  ratio of the percentage change in the quantity demanded to the percentage change in price. 
B)  change in quantity divided by the change in price. 
C)  ratio of the percentage change in the price to the percentage change in quantity. 
D)  percentage change in the quantity demanded divided by the percentage change in income. 
E)  equilibrium quantity divided by the equilibrium price. 
A)  ratio of the percentage change in the quantity demanded to the percentage change in price. 
B)  change in quantity divided by the change in price. 
C)  ratio of the percentage change in the price to the percentage change in quantity. 
D)  percentage change in the quantity demanded divided by the percentage change in income. 
E)  equilibrium quantity divided by the equilibrium price.

Question 18

If the price elasticity of supply for a good is 0.75,then

Accepted Answer

A)  the percentage change in the quantity supplied is less than the percentage change in price. 
B)  the supply is elastic. 
C)  an increase in the price boosts the quantity supplied by a larger percentage. 
D)  the supply is inelastic so the demand must also be inelastic. 
E)  None of the above answers is correct. 
A)  the percentage change in the quantity supplied is less than the percentage change in price. 
B)  the supply is elastic. 
C)  an increase in the price boosts the quantity supplied by a larger percentage. 
D)  the supply is inelastic so the demand must also be inelastic. 
E)  None of the above answers is correct.

Question 19

If the cross elasticity of demand between two goods is negative,are the goods substitutes or complements?

Accepted Answer

If the cross elastic

Question 20

If the price increases by 20 percent and the quantity supplied increases by 40 percent,what does the elasticity of supply equal?

Accepted Answer

The price elasticity of supply

Using the midpoint method,if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to $238,the percentage change in price is

Price (dollars per pizza) Quantity demanded (pizzas per day) 10 100 9 125 -The data in the table above give two points on the demand curve for pizza.Using the midpoint method,when the price of a pizza falls from $10 to $9,what is the percentage change in the quantity demanded?

-In the figure above,using the midpoint method,the price elasticity of demand when the price falls from $6 to $5 is equal to

Goods that can be produced at a constant or very gently rising opportunity cost have

If a 2 percent change in price leads to a percent change in the quantity demanded,then demand is .

Price (dollars per cake) 2 4 Quantity demanded (gallons of ice cream per week) 10 6 -Based on data in the table above,use the midpoint method to determine the cross elasticity of demand for ice cream and cake.

The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ and all other influences on buyers' plans remain the same.

If the percentage change in quantity demanded is greater than the percentage change in price,can you determine if the demand is elastic,unit elastic,or inelastic? Explain your answer.

Suppose the demand for rescue services in our national parks is perfectly inelastic.This fact would mean that a 31 percent increase in rescue fees leads to

If the price of a good rises,then moving along a demand curve the percentage change in the quantity demanded will be

If,when the price falls,total revenue increases,demand is

If the price of corn increases by 20 percent and the quantity supplied of corn increases by 30 percent,then supply is

If a good has only a few,poor substitutes,is its demand elastic or inelastic?

When a firm raises the price of its product,what happens to its total revenue?

Price (dollars) Total revenue (dollars) 1.00 110 1.25 125 1.50 125 1.75 100 -Steve sells hotdogs from a vending cart downtown.The table above shows his daily total revenues at four different prices.Between which two prices is the demand for hotdogs a.elastic? b.unit elastic? c.inelastic?

We calculate the price elasticity of demand as the

If the price elasticity of supply for a good is 0.75,then

If the cross elasticity of demand between two goods is negative,are the goods substitutes or complements?

If the price increases by 20 percent and the quantity supplied increases by 40 percent,what does the elasticity of supply equal?

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 5: Elasticities of Demand and Supply

Using the midpoint method,if the price of an airline ticket from Orlando to Pittsburgh falls from $275 to $238,the percentage change in price is

Price (dollars per pizza) Quantity demanded (pizzas per day) 10 100 9 125 -The data in the table above give two points on the demand curve for pizza.Using the midpoint method,when the price of a pizza falls from $10 to $9,what is the percentage change in the quantity demanded?

-In the figure above,using the midpoint method,the price elasticity of demand when the price falls from $6 to $5 is equal to

Goods that can be produced at a constant or very gently rising opportunity cost have

If a 2 percent change in price leads to a ________ percent change in the quantity demanded,then demand is ________.

Price (dollars per cake) 2 4 Quantity demanded (gallons of ice cream per week) 10 6 -Based on data in the table above,use the midpoint method to determine the cross elasticity of demand for ice cream and cake.

The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ and all other influences on buyers' plans remain the same.

If the percentage change in quantity demanded is greater than the percentage change in price,can you determine if the demand is elastic,unit elastic,or inelastic? Explain your answer.

Suppose the demand for rescue services in our national parks is perfectly inelastic.This fact would mean that a 31 percent increase in rescue fees leads to

If the price of a good rises,then moving along a demand curve the percentage change in the quantity demanded will be

If,when the price falls,total revenue increases,demand is

If the price of corn increases by 20 percent and the quantity supplied of corn increases by 30 percent,then supply is

If a good has only a few,poor substitutes,is its demand elastic or inelastic?

When a firm raises the price of its product,what happens to its total revenue?

Price (dollars) Total revenue (dollars) 1.00 110 1.25 125 1.50 125 1.75 100 -Steve sells hotdogs from a vending cart downtown.The table above shows his daily total revenues at four different prices.Between which two prices is the demand for hotdogs a.elastic? b.unit elastic? c.inelastic?

We calculate the price elasticity of demand as the

If the price elasticity of supply for a good is 0.75,then

If the cross elasticity of demand between two goods is negative,are the goods substitutes or complements?

If the price increases by 20 percent and the quantity supplied increases by 40 percent,what does the elasticity of supply equal?

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

If a 2 percent change in price leads to a percent change in the quantity demanded,then demand is .