Question 1

When demand is price-elastic,an increase in price will lead to increased total consumer spending for the product.

Accepted Answer

A) True 
 B)False

Question 2

If the price elasticity of demand for automobiles is 2:

Accepted Answer

A)  a 10 percent decrease in price would result in a 20 percent decrease in quantity demanded. 
B)  a 10 percent decrease in price would result in a 20 percent increase in quantity demanded. 
C)  a 10 percent increase in price would result in a 20 percent increase in quantity demanded. 
D)  a 10 percent increase in price would result in a 10 percent decrease in quantity demanded. 
A)  a 10 percent decrease in price would result in a 20 percent decrease in quantity demanded. 
B)  a 10 percent decrease in price would result in a 20 percent increase in quantity demanded. 
C)  a 10 percent increase in price would result in a 20 percent increase in quantity demanded. 
D)  a 10 percent increase in price would result in a 10 percent decrease in quantity demanded.

Question 3

Consider a situation where the U.S.Congress wants to place a special tax on private airplanes to increase tax revenue.This tax would be most effective in raising new tax revenues if the price elasticity of:

Accepted Answer

A)  supply is elastic. 
B)  supply is inelastic. 
C)  demand is elastic. 
D)  demand is inelastic. 
A)  supply is elastic. 
B)  supply is inelastic. 
C)  demand is elastic. 
D)  demand is inelastic.

Question 4

Refer to the table above.Which product is most responsive to a change in income?

Accepted Answer

A)  Product W 
B)  Product X 
C)  Product Y 
D)  Product Z 
A)  Product W 
B)  Product X 
C)  Product Y 
D)  Product Z

When demand is price-elastic,an increase in price will lead to increased total consumer spending for the product.

If the price elasticity of demand for automobiles is 2:

Consider a situation where the U.S.Congress wants to place a special tax on private airplanes to increase tax revenue.This tax would be most effective in raising new tax revenues if the price elasticity of:

Refer to the table above.Which product is most responsive to a change in income?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Businesses and Their Costs

Pure Competition

Pure Monopoly

Monopolistic Competition and Oligopoly

Wage Determination

Income Inequality and Poverty

Public Finance: Expenditures and Taxes

International Trade and Exchange Rates

Filters

Exam 4: Elasticity of Demand and Supply

When demand is price-elastic,an increase in price will lead to increased total consumer spending for the product.

If the price elasticity of demand for automobiles is 2:

Consider a situation where the U.S.Congress wants to place a special tax on private airplanes to increase tax revenue.This tax would be most effective in raising new tax revenues if the price elasticity of:

Refer to the table above.Which product is most responsive to a change in income?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Businesses and Their Costs

Pure Competition

Pure Monopoly

Monopolistic Competition and Oligopoly

Wage Determination

Income Inequality and Poverty

Public Finance: Expenditures and Taxes

International Trade and Exchange Rates

Filters