Question 1

We would expect the cross-price elasticity of demand between two different brands of flour to be

Accepted Answer

A) negative with a high absolute value 
B) negative with a low absolute value 
C) zero 
D) positive with a low absolute value 
E) positive with a high absolute value 
A) negative with a high absolute value 
B) negative with a low absolute value 
C) zero 
D) positive with a low absolute value 
E) positive with a high absolute value E

Question 2

-Figure 5-7 shows Sally's demand for movie theater tickets (quantity of movies per year).At a price of $9 per ticket,the price elasticity of demand is

Accepted Answer

A) .5 
B) 1.0 
C) 1.5 
D) 2 
E) cannot tell from information given 
A) .5 
B) 1.0 
C) 1.5 
D) 2 
E) cannot tell from information given C

Question 3

The slope of the demand curve and the price elasticity of demand are

Accepted Answer

A) basically the same thing 
B) determined by supply 
C) are derived from production and distribution costs 
D) different because slope is based on absolute changes and elasticity is based on percentage changes 
E) implicit in the shape of the supply curve 
A) basically the same thing 
B) determined by supply 
C) are derived from production and distribution costs 
D) different because slope is based on absolute changes and elasticity is based on percentage changes 
E) implicit in the shape of the supply curve D

Question 4

If a price decrease results in no change in seller's total revenue then

Accepted Answer

A) supply determined demand 
B) supply is unresponsive to demand 
C) demand is elastic 
D) demand is inelastic 
E) demand is unitary elastic 
A) supply determined demand 
B) supply is unresponsive to demand 
C) demand is elastic 
D) demand is inelastic 
E) demand is unitary elastic

Question 5

-Figure 5-11 shows five different levels of income for a particular state (in billions of dollars)and the quantity of public higher education demanded there (for a given level of tuition).What is the income elasticity of demand if income rises from $45 billion to $55 billion?

Accepted Answer

A) 1.00 
B) 0.06 
C) -1.00 
D) 0 
E) none of these 
A) 1.00 
B) 0.06 
C) -1.00 
D) 0 
E) none of these

Question 6

A less elastic demand for a good could result from

Accepted Answer

A) strong supply-side reactions 
B) an increased number of available substitutes 
C) lower consumer incomes 
D) a longer time horizon 
E) a shorter time horizon 
A) strong supply-side reactions 
B) an increased number of available substitutes 
C) lower consumer incomes 
D) a longer time horizon 
E) a shorter time horizon

Question 7

Demand for a good is likely to be less elastic

Accepted Answer

A) the more narrowly defined the good is 
B) the larger the good's share of the buyer's budget 
C) in the long run than in the short run 
D) the smaller the number of substitute goods available 
E) at high prices 
A) the more narrowly defined the good is 
B) the larger the good's share of the buyer's budget 
C) in the long run than in the short run 
D) the smaller the number of substitute goods available 
E) at high prices

Question 8

If the demand for good A is more elastic than the demand for good B,a small increase in supply in both markets will cause

Accepted Answer

A) a much greater increase in the equilibrium quantity of good A than for good B 
B) a much greater increase in the equilibrium quantity of good B than for good A 
C) the equilibrium quantity will decrease by the same amount in both markets 
D) only the equilibrium quantity of good B will decrease 
E) only the equilibrium quantity of good A will decrease 
A) a much greater increase in the equilibrium quantity of good A than for good B 
B) a much greater increase in the equilibrium quantity of good B than for good A 
C) the equilibrium quantity will decrease by the same amount in both markets 
D) only the equilibrium quantity of good B will decrease 
E) only the equilibrium quantity of good A will decrease

Question 9

A local store noticed that when it increased the price of milk from $2.50 to $3.50 per gallon,it sold the same amount of milk per week (165 gallons).Since everything else remained the same,we would say the

Accepted Answer

A) demand for milk is perfectly elastic 
B) demand for milk is elastic 
C) demand for milk is perfectly inelastic 
D) demand for milk is unitary elastic 
E) law of supply does not apply in this situation 
A) demand for milk is perfectly elastic 
B) demand for milk is elastic 
C) demand for milk is perfectly inelastic 
D) demand for milk is unitary elastic 
E) law of supply does not apply in this situation

Question 10

A perfectly inelastic supply curve

Accepted Answer

A) cannot exist 
B) is horizontal 
C) has an elasticity of 0 
D) has an elasticity of 1 
E) is vertical 
A) cannot exist 
B) is horizontal 
C) has an elasticity of 0 
D) has an elasticity of 1 
E) is vertical

Question 11

A price elasticity of demand of 2 for a specific cola means that if the price increases 1 percent,the quantity demanded of the cola will decrease by 2 percent.

Accepted Answer

A) True 
 B)False

Question 12

As a result of heavy spring rains in the Midwest,the corn crop declined sharply.If corn growers experienced an increase in sales revenue,the demand for corn must be

Accepted Answer

A) price elastic 
B) price inelastic 
C) unitary elastic 
D) perfectly inelastic 
E) perfectly elastic 
A) price elastic 
B) price inelastic 
C) unitary elastic 
D) perfectly inelastic 
E) perfectly elastic

Question 13

For which of the following goods is the income elasticity of demand likely to be largest?

Accepted Answer

A) poultry products 
B) meals at restaurants 
C) lemonade 
D) used books 
E) paperback mystery novels 
A) poultry products 
B) meals at restaurants 
C) lemonade 
D) used books 
E) paperback mystery novels

Question 14

When a one-percent change in price is accompanied by a larger percent change in quantity demanded,

Accepted Answer

A) demand is inelastic 
B) supply is elastic 
C) the good is a normal good 
D) the good is an inferior good 
E) demand is elastic 
A) demand is inelastic 
B) supply is elastic 
C) the good is a normal good 
D) the good is an inferior good 
E) demand is elastic

Question 15

The more available substitutes there are for a good,the

Accepted Answer

A) larger the number of consumers 
B) smaller the number of consumers 
C) smaller the supply side response 
D) more elastic the demand for that good 
E) less elastic the demand for that good 
A) larger the number of consumers 
B) smaller the number of consumers 
C) smaller the supply side response 
D) more elastic the demand for that good 
E) less elastic the demand for that good

Question 16

If a decrease in the price of one good causes the demand curve for another good to shift to the left,the two goods must be

Accepted Answer

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

Question 17

A 10 percent increase in buyers' incomes results in a 5 percent drop in the quantity of hot dogs demanded.In this range,the income elasticity of demand for hot dogs is

Accepted Answer

A) 0.5 
B) 2.0 
C) 5.0 
D) -2.0 
E) -0.5 
A) 0.5 
B) 2.0 
C) 5.0 
D) -2.0 
E) -0.5

Question 18

Another term that could be used for elasticity is

Accepted Answer

A) sensitivity 
B) utility 
C) surplus 
D) profit 
E) slope 
A) sensitivity 
B) utility 
C) surplus 
D) profit 
E) slope

Question 19

-Figure 5-8 shows the demand schedule for hockey pucks.At which price is demand the most price elastic?

Accepted Answer

A) $1 
B) $2 
C) $3 
D) $4 
E) $5 
A) $1 
B) $2 
C) $3 
D) $4 
E) $5

Question 20

In general,the more of an individual's total budget that is spent on a given product,the

Accepted Answer

A) greater the supply-side response 
B) less elastic is the demand for that good 
C) more elastic is the demand for that good 
D) more the demand curve will shift when the price changes 
E) less the demand curve will shift when the price changes 
A) greater the supply-side response 
B) less elastic is the demand for that good 
C) more elastic is the demand for that good 
D) more the demand curve will shift when the price changes 
E) less the demand curve will shift when the price changes

We would expect the cross-price elasticity of demand between two different brands of flour to be

-Figure 5-7 shows Sally's demand for movie theater tickets (quantity of movies per year).At a price of $9 per ticket,the price elasticity of demand is

The slope of the demand curve and the price elasticity of demand are

If a price decrease results in no change in seller's total revenue then

-Figure 5-11 shows five different levels of income for a particular state (in billions of dollars)and the quantity of public higher education demanded there (for a given level of tuition).What is the income elasticity of demand if income rises from $45 billion to $55 billion?

A less elastic demand for a good could result from

Demand for a good is likely to be less elastic

If the demand for good A is more elastic than the demand for good B,a small increase in supply in both markets will cause

A local store noticed that when it increased the price of milk from $2.50 to $3.50 per gallon,it sold the same amount of milk per week (165 gallons).Since everything else remained the same,we would say the

A perfectly inelastic supply curve

A price elasticity of demand of 2 for a specific cola means that if the price increases 1 percent,the quantity demanded of the cola will decrease by 2 percent.

As a result of heavy spring rains in the Midwest,the corn crop declined sharply.If corn growers experienced an increase in sales revenue,the demand for corn must be

For which of the following goods is the income elasticity of demand likely to be largest?

When a one-percent change in price is accompanied by a larger percent change in quantity demanded,

The more available substitutes there are for a good,the

If a decrease in the price of one good causes the demand curve for another good to shift to the left,the two goods must be

A 10 percent increase in buyers' incomes results in a 5 percent drop in the quantity of hot dogs demanded.In this range,the income elasticity of demand for hot dogs is

Another term that could be used for elasticity is

-Figure 5-8 shows the demand schedule for hockey pucks.At which price is demand the most price elastic?

In general,the more of an individual's total budget that is spent on a given product,the

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 5: Elasticity

We would expect the cross-price elasticity of demand between two different brands of flour to be

-Figure 5-7 shows Sally's demand for movie theater tickets (quantity of movies per year).At a price of $9 per ticket,the price elasticity of demand is

The slope of the demand curve and the price elasticity of demand are

If a price decrease results in no change in seller's total revenue then

-Figure 5-11 shows five different levels of income for a particular state (in billions of dollars)and the quantity of public higher education demanded there (for a given level of tuition).What is the income elasticity of demand if income rises from $45 billion to $55 billion?

A less elastic demand for a good could result from

Demand for a good is likely to be less elastic

If the demand for good A is more elastic than the demand for good B,a small increase in supply in both markets will cause

A local store noticed that when it increased the price of milk from $2.50 to $3.50 per gallon,it sold the same amount of milk per week (165 gallons).Since everything else remained the same,we would say the

A perfectly inelastic supply curve

A price elasticity of demand of 2 for a specific cola means that if the price increases 1 percent,the quantity demanded of the cola will decrease by 2 percent.

As a result of heavy spring rains in the Midwest,the corn crop declined sharply.If corn growers experienced an increase in sales revenue,the demand for corn must be

For which of the following goods is the income elasticity of demand likely to be largest?

When a one-percent change in price is accompanied by a larger percent change in quantity demanded,

The more available substitutes there are for a good,the

If a decrease in the price of one good causes the demand curve for another good to shift to the left,the two goods must be

A 10 percent increase in buyers' incomes results in a 5 percent drop in the quantity of hot dogs demanded.In this range,the income elasticity of demand for hot dogs is

Another term that could be used for elasticity is

-Figure 5-8 shows the demand schedule for hockey pucks.At which price is demand the most price elastic?

In general,the more of an individual's total budget that is spent on a given product,the

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters