Question 1

Which is larger: The price elasticity of demand for food or the price elasticity of demand for oranges? Why?

Accepted Answer

The price elasticity of demand for orang

Question 2

If the cross elasticity of demand between car insurance and new cars is -0.41,then car insurance and new cars are

Accepted Answer

A)  complements. 
B)  substitutes. 
C)  normal goods. 
D)  inferior goods. 
E)  unrelated goods. 
A)  complements. 
B)  substitutes. 
C)  normal goods. 
D)  inferior goods. 
E)  unrelated goods.

Question 3

If the price elasticity of supply of corn is 3.12,then is the supply of corn elastic or inelastic?

Accepted Answer

Because the price el

Question 4

The price elasticity of demand measures the ________ that results from a ________.

Accepted Answer

A)  change in quantity demanded; change in price 
B)  change in price; change in the quantity demanded 
C)  percentage change in price; percentage change in the quantity demanded 
D)  percentage change in the quantity demanded; percentage change in price 
E)  percentage change in the quantity demanded; change in price 
A)  change in quantity demanded; change in price 
B)  change in price; change in the quantity demanded 
C)  percentage change in price; percentage change in the quantity demanded 
D)  percentage change in the quantity demanded; percentage change in price 
E)  percentage change in the quantity demanded; change in price

Question 5

When the percentage change in the quantity supplied is twice the percentage change in price,then supply is

Accepted Answer

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

Question 6

When does a decrease in supply raise the price more: When demand is elastic or when demand is inelastic? When OPEC decreases the supply of oil,the price of gasoline skyrockets.Hence is the demand for gasoline elastic or inelastic?

Accepted Answer

A decrease in supply raises th

Question 7

Suppose a decrease in demand causes the price to decrease from $4 to $3 and the quantity to decrease from 1,000 to 700.Using the midpoint method,the elasticity of supply equals

Accepted Answer

A)  0.81. 
B)  1.24. 
C)  2.83. 
D)  0.18. 
E)  None of the above answers is correct. 
A)  0.81. 
B)  1.24. 
C)  2.83. 
D)  0.18. 
E)  None of the above answers is correct.

Question 8

Demand is price inelastic if ________ percentage change in the price leads to a ________ percentage change in the quantity demanded.

Accepted Answer

A)  a small; large 
B)  a large; small 
C)  any; large 
D)  Both answers A and B are correct. 
E)  None of the above answers is correct. 
A)  a small; large 
B)  a large; small 
C)  any; large 
D)  Both answers A and B are correct. 
E)  None of the above answers is correct.

Question 9

If the cross elasticity of demand between good A and good B is negative,then a decrease in the price of good A results in

Accepted Answer

A)  an increase in the demand for good B. 
B)  a decrease in the demand for good B. 
C)  a movement downward along the demand curve for good B. 
D)  an increase in the supply of good B. 
E)  a decrease in the supply of good B. 
A)  an increase in the demand for good B. 
B)  a decrease in the demand for good B. 
C)  a movement downward along the demand curve for good B. 
D)  an increase in the supply of good B. 
E)  a decrease in the supply of good B.

Question 10

If a Pizza Hut raises the price of a slice of pizza from $3.00 to $3.25,the quantity demanded decreases from 1,500 slices per week to 1,300 slices per week.The demand for slices of pizza is ________ and the total revenue received by this Pizza Hut ________.

Accepted Answer

A)  elastic; decreases 
B)  inelastic; decreases 
C)  elastic; increases 
D)  inelastic; increases 
E)  unit elastic; does not change 
A)  elastic; decreases 
B)  inelastic; decreases 
C)  elastic; increases 
D)  inelastic; increases 
E)  unit elastic; does not change

Question 11

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded,then demand is

Accepted Answer

A)  elastic and total revenue decreases. 
B)  elastic and total revenue increases. 
C)  inelastic and total revenue decreases. 
D)  elastic, but we cannot tell what happens to total revenue without more information. 
E)  Total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information. 
A)  elastic and total revenue decreases. 
B)  elastic and total revenue increases. 
C)  inelastic and total revenue decreases. 
D)  elastic, but we cannot tell what happens to total revenue without more information. 
E)  Total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information.

Question 12

You own a small store.Your cashier thinks you should raise prices to increase your total revenue and your customer thinks you should lower prices to increase your total revenue.The cashier thinks the price elasticity of demand is ________ and the customer believes the price elasticity of demand is ________.

Accepted Answer

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

Question 13

If two goods have a cross elasticity of demand of -2,then when the price of one good increases,the demand curve of the other good

Accepted Answer

A)  shifts rightward. 
B)  shifts leftward. 
C)  remains unchanged and the supply curve also remains unchanged. 
D)  might shift rightward, leftward, or remain unchanged. 
E)  remains unchanged but the supply curve shifts leftward. 
A)  shifts rightward. 
B)  shifts leftward. 
C)  remains unchanged and the supply curve also remains unchanged. 
D)  might shift rightward, leftward, or remain unchanged. 
E)  remains unchanged but the supply curve shifts leftward.

Question 14

If an Atlanta bakery raises the price of their rye bread by 11 percent and the quantity demanded decreases by 11 percent,then the demand for the rye bread is ________ and the bakery's total revenue ________.

Accepted Answer

A)  unit elastic; does not change 
B)  unit elastic; increases 
C)  unit elastic; decreases 
D)  elastic; does not change 
E)  inelastic; does not change 
A)  unit elastic; does not change 
B)  unit elastic; increases 
C)  unit elastic; decreases 
D)  elastic; does not change 
E)  inelastic; does not change

Question 15

The fact that there is a very limited amount of land in Hong Kong means the supply of new apartments in Hong Kong is

Accepted Answer

A)  inelastic. 
B)  elastic. 
C)  unit elastic. 
D)  perfectly elastic. 
E)  limited by the demand. 
A)  inelastic. 
B)  elastic. 
C)  unit elastic. 
D)  perfectly elastic. 
E)  limited by the demand.

Question 16

When income increases from $20,000 to $30,000 the number of home delivered pizzas per year increases from 22 to 40.The income elasticity of demand for home delivered pizza equals

Accepted Answer

A)  1.45. 
B)  0.69. 
C)  0.58. 
D)  0.40. 
E)  2.86. 
A)  1.45. 
B)  0.69. 
C)  0.58. 
D)  0.40. 
E)  2.86.

Question 17

The price of one bedroom apartments in Cheyenne increased from $55,000 to $65,000 and the quantity of apartment for sale increased from 25 to 30.Using the midpoint method,the price elasticity of supply for apartments in Cheyenne is equal to

Accepted Answer

A)  0.916. 
B)  0.75. 
C)  1.09. 
D)  2.18. 
E)  0.08. 
A)  0.916. 
B)  0.75. 
C)  1.09. 
D)  2.18. 
E)  0.08.

Question 18

Explain why the number of substitutes influences the price elasticity of demand.

Accepted Answer

The price elasticity of demand is a meas

Question 19

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method,what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

Accepted Answer

The price elasticity of demand is 0.23.(

Question 20

When the percentage change in the quantity demanded equals the percentage change in price,then demand is

Accepted Answer

A)  inelastic. 
B)  unit elastic. 
C)  elastic. 
D)  irrelevant. 
E)  undefined. 
A)  inelastic. 
B)  unit elastic. 
C)  elastic. 
D)  irrelevant. 
E)  undefined.

Which is larger: The price elasticity of demand for food or the price elasticity of demand for oranges? Why?

If the cross elasticity of demand between car insurance and new cars is -0.41,then car insurance and new cars are

If the price elasticity of supply of corn is 3.12,then is the supply of corn elastic or inelastic?

The price elasticity of demand measures the that results from a .

When the percentage change in the quantity supplied is twice the percentage change in price,then supply is

When does a decrease in supply raise the price more: When demand is elastic or when demand is inelastic? When OPEC decreases the supply of oil,the price of gasoline skyrockets.Hence is the demand for gasoline elastic or inelastic?

Suppose a decrease in demand causes the price to decrease from $4 to $3 and the quantity to decrease from 1,000 to 700.Using the midpoint method,the elasticity of supply equals

Demand is price inelastic if percentage change in the price leads to a percentage change in the quantity demanded.

If the cross elasticity of demand between good A and good B is negative,then a decrease in the price of good A results in

If a Pizza Hut raises the price of a slice of pizza from $3.00 to $3.25,the quantity demanded decreases from 1,500 slices per week to 1,300 slices per week.The demand for slices of pizza is and the total revenue received by this Pizza Hut .

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded,then demand is

You own a small store.Your cashier thinks you should raise prices to increase your total revenue and your customer thinks you should lower prices to increase your total revenue.The cashier thinks the price elasticity of demand is and the customer believes the price elasticity of demand is .

If two goods have a cross elasticity of demand of -2,then when the price of one good increases,the demand curve of the other good

If an Atlanta bakery raises the price of their rye bread by 11 percent and the quantity demanded decreases by 11 percent,then the demand for the rye bread is and the bakery's total revenue .

The fact that there is a very limited amount of land in Hong Kong means the supply of new apartments in Hong Kong is

When income increases from $20,000 to $30,000 the number of home delivered pizzas per year increases from 22 to 40.The income elasticity of demand for home delivered pizza equals

The price of one bedroom apartments in Cheyenne increased from $55,000 to $65,000 and the quantity of apartment for sale increased from 25 to 30.Using the midpoint method,the price elasticity of supply for apartments in Cheyenne is equal to

Explain why the number of substitutes influences the price elasticity of demand.

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method,what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

When the percentage change in the quantity demanded equals the percentage change in price,then demand is

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

Which is larger: The price elasticity of demand for food or the price elasticity of demand for oranges? Why?

If the cross elasticity of demand between car insurance and new cars is -0.41,then car insurance and new cars are

If the price elasticity of supply of corn is 3.12,then is the supply of corn elastic or inelastic?

The price elasticity of demand measures the ________ that results from a ________.

When the percentage change in the quantity supplied is twice the percentage change in price,then supply is

When does a decrease in supply raise the price more: When demand is elastic or when demand is inelastic? When OPEC decreases the supply of oil,the price of gasoline skyrockets.Hence is the demand for gasoline elastic or inelastic?

Suppose a decrease in demand causes the price to decrease from $4 to $3 and the quantity to decrease from 1,000 to 700.Using the midpoint method,the elasticity of supply equals

Demand is price inelastic if ________ percentage change in the price leads to a ________ percentage change in the quantity demanded.

If the cross elasticity of demand between good A and good B is negative,then a decrease in the price of good A results in

If a Pizza Hut raises the price of a slice of pizza from $3.00 to $3.25,the quantity demanded decreases from 1,500 slices per week to 1,300 slices per week.The demand for slices of pizza is ________ and the total revenue received by this Pizza Hut ________.

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded,then demand is

If two goods have a cross elasticity of demand of -2,then when the price of one good increases,the demand curve of the other good

If an Atlanta bakery raises the price of their rye bread by 11 percent and the quantity demanded decreases by 11 percent,then the demand for the rye bread is ________ and the bakery's total revenue ________.

The fact that there is a very limited amount of land in Hong Kong means the supply of new apartments in Hong Kong is

When income increases from $20,000 to $30,000 the number of home delivered pizzas per year increases from 22 to 40.The income elasticity of demand for home delivered pizza equals

The price of one bedroom apartments in Cheyenne increased from $55,000 to $65,000 and the quantity of apartment for sale increased from 25 to 30.Using the midpoint method,the price elasticity of supply for apartments in Cheyenne is equal to

Explain why the number of substitutes influences the price elasticity of demand.

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method,what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

When the percentage change in the quantity demanded equals the percentage change in price,then demand is

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

The price elasticity of demand measures the that results from a .

Demand is price inelastic if percentage change in the price leads to a percentage change in the quantity demanded.

If a Pizza Hut raises the price of a slice of pizza from $3.00 to $3.25,the quantity demanded decreases from 1,500 slices per week to 1,300 slices per week.The demand for slices of pizza is and the total revenue received by this Pizza Hut .

If an Atlanta bakery raises the price of their rye bread by 11 percent and the quantity demanded decreases by 11 percent,then the demand for the rye bread is and the bakery's total revenue .