Question 1

-Figure 5-9 shows Sally's demand for movie theater tickets (quantity of movies per year).If the price per ticket fell from $8 to $7,

Accepted Answer

A) there would be no change in Sally's total expenditure on movie tickets 
B) Sally would spend less money on movie tickets 
C) Sally would spend more money on movie tickets 
D) Sally's demand curve would shift to the left 
E) the supply curve would shift to the right 
A) there would be no change in Sally's total expenditure on movie tickets 
B) Sally would spend less money on movie tickets 
C) Sally would spend more money on movie tickets 
D) Sally's demand curve would shift to the left 
E) the supply curve would shift to the right

Question 2

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

Question 3

For which of the following categories of goods is demand likely to be the most price elastic?

Accepted Answer

A) automobiles 
B) foreign-made automobiles 
C) foreign-made sports cars 
D) a BMW sports car 
A) automobiles 
B) foreign-made automobiles 
C) foreign-made sports cars 
D) a BMW sports car

Question 4

The price elasticity of demand measures the

Accepted Answer

A) responsiveness of a good's price to a change in quantity demanded 
B) adaptability of suppliers when a change in demand alters the price of a good 
C) responsiveness of quantity demanded to a change in a good's price 
D) adaptability of buyers when there is a change in demand 
E) responsiveness of quantity supplied to a change in quantity demanded 
A) responsiveness of a good's price to a change in quantity demanded 
B) adaptability of suppliers when a change in demand alters the price of a good 
C) responsiveness of quantity demanded to a change in a good's price 
D) adaptability of buyers when there is a change in demand 
E) responsiveness of quantity supplied to a change in quantity demanded

Question 5

The concept of elasticity is used to

Accepted Answer

A) indicate the economy's ability to rebound from a recession 
B) measure the robustness of a variable 
C) measure the sensitivity of one variable to changes in another 
D) measure price changes 
E) measure income changes 
A) indicate the economy's ability to rebound from a recession 
B) measure the robustness of a variable 
C) measure the sensitivity of one variable to changes in another 
D) measure price changes 
E) measure income changes

Question 6

A public university knows that demand from potential students is elastic.If the university wants to increase tuition revenue,it should

Accepted Answer

A) raise its tuition rate 
B) hold its tuition rate constant and increase faculty salaries 
C) increase its financial aid 
D) lower its tuition rate 
E) increase its enrollment 
A) raise its tuition rate 
B) hold its tuition rate constant and increase faculty salaries 
C) increase its financial aid 
D) lower its tuition rate 
E) increase its enrollment

Question 7

Moving downward along a straight-line demand curve,the absolute value of the price elasticity of demand

Accepted Answer

A) always rises 
B) rises until the midpoint of the curve is reached,and then falls 
C) falls until the midpoint of the curve is reached,and then rises 
D) always falls 
E) falls from 1 to 0 
A) always rises 
B) rises until the midpoint of the curve is reached,and then falls 
C) falls until the midpoint of the curve is reached,and then rises 
D) always falls 
E) falls from 1 to 0

Question 8

Suppose a local bookstore notices that a 2 percent increase in book prices leads to a 2 percent decrease in the number of books sold.Which of the following is true?

Accepted Answer

A) Demand for books is price elastic. 
B) The store's sales revenue did not change. 
C) Demand for books is price inelastic. 
D) Demand for books is perfectly inelastic. 
E) The bookstore could increase revenue by further lowering prices. 
A) Demand for books is price elastic. 
B) The store's sales revenue did not change. 
C) Demand for books is price inelastic. 
D) Demand for books is perfectly inelastic. 
E) The bookstore could increase revenue by further lowering prices.

Question 9

Consider a good with a price elasticity equal to 1 at every point on its demand curve.Which of the following statements is correct?

Accepted Answer

A) Total revenue always rises exactly in proportion to a drop in the price. 
B) Total revenue always rises exactly in proportion to a rise in the price. 
C) Total revenue does not change if the price changes. 
D) Total revenue drops to zero whenever the price rises. 
E) Total revenue always doubles if the price drops. 
A) Total revenue always rises exactly in proportion to a drop in the price. 
B) Total revenue always rises exactly in proportion to a rise in the price. 
C) Total revenue does not change if the price changes. 
D) Total revenue drops to zero whenever the price rises. 
E) Total revenue always doubles if the price drops.

Question 10

Which of the following statements about straight-line demand curves is true?

Accepted Answer

A) The price elasticity of demand becomes larger in absolute value as price falls. 
B) The price elasticity of demand becomes smaller in absolute value as price falls. 
C) The price elasticity of demand is constant along the curve. 
D) The price elasticity of demand and the slope of the demand curve are the same. 
E) Demand is price elastic everywhere along the curve. 
A) The price elasticity of demand becomes larger in absolute value as price falls. 
B) The price elasticity of demand becomes smaller in absolute value as price falls. 
C) The price elasticity of demand is constant along the curve. 
D) The price elasticity of demand and the slope of the demand curve are the same. 
E) Demand is price elastic everywhere along the curve.

Question 11

For which of the following types of goods would demand be most price-elastic?

Accepted Answer

A) necessities 
B) goods with many substitutes 
C) goods that require only a small portion of the buyer's budget 
D) goods with vertical demand curves 
E) goods with vertical supply curves 
A) necessities 
B) goods with many substitutes 
C) goods that require only a small portion of the buyer's budget 
D) goods with vertical demand curves 
E) goods with vertical supply curves

Question 12

If the quantity of higher education demanded rises by 5 percent when incomes rise by 10 percent,

Accepted Answer

A) higher education is a normal good 
B) higher education is an inferior good 
C) the demand for higher education is price elastic 
D) the law of demand applies to higher education 
E) the demand for higher education is price inelastic 
A) higher education is a normal good 
B) higher education is an inferior good 
C) the demand for higher education is price elastic 
D) the law of demand applies to higher education 
E) the demand for higher education is price inelastic

Question 13

If two commodities are substitutes,then

Accepted Answer

A) they tend to be used together by consumers 
B) their prices are generally regulated by the government 
C) an increase in the price of one of them increases the supply of the other 
D) the cross-price elasticity of demand is positive 
E) the cross-price elasticity of demand is negative 
A) they tend to be used together by consumers 
B) their prices are generally regulated by the government 
C) an increase in the price of one of them increases the supply of the other 
D) the cross-price elasticity of demand is positive 
E) the cross-price elasticity of demand is negative

Question 14

-Figure 5-1 shows the prices of two services offered by Earl's Barber Shop and the resulting quantities demanded by customers.In this example,the price elasticity of demand for manicures (using the midpoint formula)is

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 0.5 
E) 0.4 
A) 1 
B) 2 
C) 3 
D) 0.5 
E) 0.4

Question 15

Celia buys 24 gallons of gasoline per month when the price is $2 per gallon,but only 16 gallons if the price rises to $3 per gallon.Within this range,her demand for gasoline is

Accepted Answer

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

Question 16

Figure 5-2
  
-Consider demand curve D in Figure 5-2.Between points F and G,the price elasticity of demand is

Accepted Answer

A) 1 
B) 0.5 
C) 2 
D) 0.2 
E) none of these 
A) 1 
B) 0.5 
C) 2 
D) 0.2 
E) none of these

Question 17

In measuring the sensitivity of demand,the

Accepted Answer

A) price and income elasticities refer to movements along the demand curve;other elasticities refer to shifts of the entire demand curve 
B) price and cross-price elasticities analyze movements along the demand curve;other elasticities refer to shifts of the entire demand curve 
C) income and cross-price elasticities refer to movements along the demand curve;price elasticity refers to shifts of the entire demand curve 
D) price elasticity refers to movements along the demand curve;income and cross-price elasticities refer to shifts of the entire demand curve 
E) income elasticity refers to movements along the demand curve;other elasticities refer to shifts of the entire demand curve 
A) price and income elasticities refer to movements along the demand curve;other elasticities refer to shifts of the entire demand curve 
B) price and cross-price elasticities analyze movements along the demand curve;other elasticities refer to shifts of the entire demand curve 
C) income and cross-price elasticities refer to movements along the demand curve;price elasticity refers to shifts of the entire demand curve 
D) price elasticity refers to movements along the demand curve;income and cross-price elasticities refer to shifts of the entire demand curve 
E) income elasticity refers to movements along the demand curve;other elasticities refer to shifts of the entire demand curve

Question 18

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

Accepted Answer

A) demand is inelastic 
B) demand is perfectly elastic 
C) demand is elastic 
D) total expenditure is being maximized 
E) demand is perfectly inelastic 
A) demand is inelastic 
B) demand is perfectly elastic 
C) demand is elastic 
D) total expenditure is being maximized 
E) demand is perfectly inelastic

Question 19

The cross-price elasticity of demand is measured by the

Accepted Answer

A) change in quantity demanded of one good divided by the change in price of another good 
B) percentage change in quantity demanded of one good divided by the percentage change in its price 
C) percentage change in demand for one good divided by the percentage change in income 
D) percentage change in quantity supplied of one good divided by the percentage change in the price of another good 
E) percentage change in quantity demanded of one good divided by the percentage change in price of another good 
A) change in quantity demanded of one good divided by the change in price of another good 
B) percentage change in quantity demanded of one good divided by the percentage change in its price 
C) percentage change in demand for one good divided by the percentage change in income 
D) percentage change in quantity supplied of one good divided by the percentage change in the price of another good 
E) percentage change in quantity demanded of one good divided by the percentage change in price of another good

Question 20

The cross-price elasticity of demand between Texaco gasoline and Mobil gasoline sold at the same intersection would be

Accepted Answer

A) positive 
B) negative 
C) 0 
D) 1.0 
E) -1.0 
A) positive 
B) negative 
C) 0 
D) 1.0 
E) -1.0

-Figure 5-9 shows Sally's demand for movie theater tickets (quantity of movies per year).If the price per ticket fell from $8 to $7,

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

For which of the following categories of goods is demand likely to be the most price elastic?

The price elasticity of demand measures the

The concept of elasticity is used to

A public university knows that demand from potential students is elastic.If the university wants to increase tuition revenue,it should

Moving downward along a straight-line demand curve,the absolute value of the price elasticity of demand

Suppose a local bookstore notices that a 2 percent increase in book prices leads to a 2 percent decrease in the number of books sold.Which of the following is true?

Consider a good with a price elasticity equal to 1 at every point on its demand curve.Which of the following statements is correct?

Which of the following statements about straight-line demand curves is true?

For which of the following types of goods would demand be most price-elastic?

If the quantity of higher education demanded rises by 5 percent when incomes rise by 10 percent,

If two commodities are substitutes,then

-Figure 5-1 shows the prices of two services offered by Earl's Barber Shop and the resulting quantities demanded by customers.In this example,the price elasticity of demand for manicures (using the midpoint formula)is

Celia buys 24 gallons of gasoline per month when the price is $2 per gallon,but only 16 gallons if the price rises to $3 per gallon.Within this range,her demand for gasoline is

Figure 5-2 -Consider demand curve D in Figure 5-2.Between points F and G,the price elasticity of demand is

In measuring the sensitivity of demand,the

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

The cross-price elasticity of demand is measured by the

The cross-price elasticity of demand between Texaco gasoline and Mobil gasoline sold at the same intersection would be

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

-Figure 5-9 shows Sally's demand for movie theater tickets (quantity of movies per year).If the price per ticket fell from $8 to $7,

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

For which of the following categories of goods is demand likely to be the most price elastic?

The price elasticity of demand measures the

The concept of elasticity is used to

A public university knows that demand from potential students is elastic.If the university wants to increase tuition revenue,it should

Moving downward along a straight-line demand curve,the absolute value of the price elasticity of demand

Suppose a local bookstore notices that a 2 percent increase in book prices leads to a 2 percent decrease in the number of books sold.Which of the following is true?

Consider a good with a price elasticity equal to 1 at every point on its demand curve.Which of the following statements is correct?

Which of the following statements about straight-line demand curves is true?

For which of the following types of goods would demand be most price-elastic?

If the quantity of higher education demanded rises by 5 percent when incomes rise by 10 percent,

If two commodities are substitutes,then

-Figure 5-1 shows the prices of two services offered by Earl's Barber Shop and the resulting quantities demanded by customers.In this example,the price elasticity of demand for manicures (using the midpoint formula)is

Celia buys 24 gallons of gasoline per month when the price is $2 per gallon,but only 16 gallons if the price rises to $3 per gallon.Within this range,her demand for gasoline is

Figure 5-2 -Consider demand curve D in Figure 5-2.Between points F and G,the price elasticity of demand is

In measuring the sensitivity of demand,the

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

The cross-price elasticity of demand is measured by the

The cross-price elasticity of demand between Texaco gasoline and Mobil gasoline sold at the same intersection would be

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