Question 1

Along a perfectly elastic supply curve

Accepted Answer

A) the quantity supplied is always the same 
B) the price elasticity of demand is always the same 
C) the price is always the same 
D) the cross-price elasticity of demand is always the same 
E) the elasticity of supply is different at each point. 
A) the quantity supplied is always the same 
B) the price elasticity of demand is always the same 
C) the price is always the same 
D) the cross-price elasticity of demand is always the same 
E) the elasticity of supply is different at each point.

Question 2

If the elasticity of demand is much greater than the elasticity of supply,a subsidy awarded to demanders will

Accepted Answer

A) benefit the demanders more than the suppliers 
B) benefit the suppliers more than the demanders 
C) the benefit of the subsidy will be equally shared between the demanders and the suppliers 
D) allow the demanders to be the only ones who will benefit 
E) Without more information as to the amount of the subsidy,who will benefit more can not be determined 
A) benefit the demanders more than the suppliers 
B) benefit the suppliers more than the demanders 
C) the benefit of the subsidy will be equally shared between the demanders and the suppliers 
D) allow the demanders to be the only ones who will benefit 
E) Without more information as to the amount of the subsidy,who will benefit more can not be determined

Question 3

The cross-price elasticity of demand between butter and margarine is most likely

Accepted Answer

A) positive,since the goods are substitutes 
B) positive,since the goods are complements 
C) negative,since the goods are complements 
D) negative,since the goods are substitutes 
E) zero,since the goods are both normal 
A) positive,since the goods are substitutes 
B) positive,since the goods are complements 
C) negative,since the goods are complements 
D) negative,since the goods are substitutes 
E) zero,since the goods are both normal

Question 4

The cross-price elasticity of demand is

Accepted Answer

A) price elasticity of demand multiplied by the income elasticity of demand 
B) the percent change in the price of one commodity with respect to a one-percent change in the quantity demanded of another commodity 
C) the percent change in the demand for one commodity with respect to a one-percent change in the price of another commodity 
D) negative for substitute goods 
E) price elasticity of demand crossed with consumer incomes 
A) price elasticity of demand multiplied by the income elasticity of demand 
B) the percent change in the price of one commodity with respect to a one-percent change in the quantity demanded of another commodity 
C) the percent change in the demand for one commodity with respect to a one-percent change in the price of another commodity 
D) negative for substitute goods 
E) price elasticity of demand crossed with consumer incomes

Question 5

If the price of a certain brand of sneakers falls from $27.50 to $22.50,and the quantity demanded by consumers increases from 15 to 25 pairs per week,then the price elasticity of demand is

Accepted Answer

A) 0.25 
B) 1.00 
C) 2.75 
D) 1.50 
E) 2.50 
A) 0.25 
B) 1.00 
C) 2.75 
D) 1.50 
E) 2.50

Question 6

Which of the following goods is likely to have the least elastic demand over the relevant range of prices?

Accepted Answer

A) insulin 
B) eggs 
C) milk 
D) Pepsi Cola 
E) gasoline 
A) insulin 
B) eggs 
C) milk 
D) Pepsi Cola 
E) gasoline

Question 7

-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).Given this information,what can be said about the state's demand for public higher education?

Accepted Answer

A) It follows the law of demand. 
B) It violates the law of demand. 
C) Public higher education is an inferior good for income levels above $65 million. 
D) Public higher education is a normal good. 
A) It follows the law of demand. 
B) It violates the law of demand. 
C) Public higher education is an inferior good for income levels above $65 million. 
D) Public higher education is a normal good.

Question 8

The price elasticity of supply

Accepted Answer

A) is a number between 0 and 1. 
B) measures the percent change in quantity supply as a result of a 1-percent change in price 
C) measures the percent change in quantity supplied as a result of a 1-percent change in cost. 
D) measures the shift in supply as the result of a price change 
E) measures the movement of a supply curve along a fixed demand curve 
A) is a number between 0 and 1. 
B) measures the percent change in quantity supply as a result of a 1-percent change in price 
C) measures the percent change in quantity supplied as a result of a 1-percent change in cost. 
D) measures the shift in supply as the result of a price change 
E) measures the movement of a supply curve along a fixed demand curve

Question 9

For which of the following medical services is the income elasticity of demand likely to be the smallest?

Accepted Answer

A) face-lifts 
B) plastic surgery 
C) manicures 
D) emergency services after a car accident 
E) hair transplants 
A) face-lifts 
B) plastic surgery 
C) manicures 
D) emergency services after a car accident 
E) hair transplants

Question 10

If the cross-price elasticity of demand between two goods is -2.2,then the

Accepted Answer

A) two goods are substitutes 
B) two goods are complements 
C) income elasticity of demand must be between 0 and 1.0 
D) goods are both normal goods 
E) goods are both inferior goods 
A) two goods are substitutes 
B) two goods are complements 
C) income elasticity of demand must be between 0 and 1.0 
D) goods are both normal goods 
E) goods are both inferior goods

Question 11

The long-run price elasticity of demand for a good is

Accepted Answer

A) zero 
B) smaller (in absolute value)than the short-run price elasticity 
C) larger (in absolute value)than the short-run price elasticity 
D) infinite 
E) the same as the short-run elasticity 
A) zero 
B) smaller (in absolute value)than the short-run price elasticity 
C) larger (in absolute value)than the short-run price elasticity 
D) infinite 
E) the same as the short-run elasticity

Question 12

When Brenda was in college,she worked part-time delivering pizzas and she ate five boxes of macaroni and cheese per week.After graduation,she became a high school teacher and ate only two boxes of macaroni and cheese per week.From this information,

Accepted Answer

A) macaroni and cheese is a normal good for Brenda 
B) the law of demand applies to macaroni and cheese for Brenda 
C) macaroni and cheese are substitute goods 
D) macaroni and cheese is an inferior good for Brenda 
E) Brenda's income elasticity of demand for macaroni and cheese is positive 
A) macaroni and cheese is a normal good for Brenda 
B) the law of demand applies to macaroni and cheese for Brenda 
C) macaroni and cheese are substitute goods 
D) macaroni and cheese is an inferior good for Brenda 
E) Brenda's income elasticity of demand for macaroni and cheese is positive

Question 13

If demand is price inelastic,

Accepted Answer

A) price and total revenue change in opposite directions 
B) a seller should decrease the price to increase total revenue 
C) too few goods are being produced from society's point of view 
D) price and total revenue change in the same direction 
E) the market can never be in equilibrium 
A) price and total revenue change in opposite directions 
B) a seller should decrease the price to increase total revenue 
C) too few goods are being produced from society's point of view 
D) price and total revenue change in the same direction 
E) the market can never be in equilibrium

Question 14

With an income elasticity of demand of 0.5,cigarettes are an example of

Accepted Answer

A) a normal good 
B) an inferior good 
C) irrational demand 
D) complements to health care 
E) unitary elasticity 
A) a normal good 
B) an inferior good 
C) irrational demand 
D) complements to health care 
E) unitary elasticity

Question 15

A more elastic demand for a good would generally result from

Accepted Answer

A) an increase in the supply of that good 
B) an increase in the number of substitutes for that good 
C) a decrease in the number of substitutes for that good 
D) smaller consumer incomes 
E) a reduction in the number of consumers 
A) an increase in the supply of that good 
B) an increase in the number of substitutes for that good 
C) a decrease in the number of substitutes for that good 
D) smaller consumer incomes 
E) a reduction in the number of consumers

Question 16

Demand is said to be price inelastic when the coefficient of price elasticity of demand is

Accepted Answer

A) greater than +1 
B) between 0 and +1 
C) zero 
D) infinity 
A) greater than +1 
B) between 0 and +1 
C) zero 
D) infinity

Question 17

The price elasticity of demand is

Accepted Answer

A) irrelevant to the determination of prices,incomes,and interest rates 
B) indeterminate in most cases 
C) the percentage change in price divided by the percentage change in quantity demanded 
D) the percentage change in price with respect to the percentage change in quantity supplied 
E) the percentage change in quantity demanded divided by the percentage change in price 
A) irrelevant to the determination of prices,incomes,and interest rates 
B) indeterminate in most cases 
C) the percentage change in price divided by the percentage change in quantity demanded 
D) the percentage change in price with respect to the percentage change in quantity supplied 
E) the percentage change in quantity demanded divided by the percentage change in price

Question 18

If the demand for a good is price inelastic,a decrease in total revenue from the good would result from a(n)

Accepted Answer

A) increase in price 
B) decrease in quantity demanded 
C) favorable shift in tastes and preferences 
D) decrease in price 
E) increase in consumers' incomes 
A) increase in price 
B) decrease in quantity demanded 
C) favorable shift in tastes and preferences 
D) decrease in price 
E) increase in consumers' incomes

Question 19

Suppose that the income elasticity of demand for college education is 1.3.This indicates that

Accepted Answer

A) college education is a necessity 
B) college education is an inferior good 
C) the demand curve for college education slopes downward 
D) college education is a normal good 
E) the demand curve for college education is horizontal 
A) college education is a necessity 
B) college education is an inferior good 
C) the demand curve for college education slopes downward 
D) college education is a normal good 
E) the demand curve for college education is horizontal

Question 20

The more narrowly we define a good,the easier it is to find substitutes,and

Accepted Answer

A) the greater is the number of producers of that good 
B) the greater is the supply-side response 
C) fewer consumers therefore wish to purchase the good 
D) less elastic is the demand for that good 
E) more elastic is the demand for that good 
A) the greater is the number of producers of that good 
B) the greater is the supply-side response 
C) fewer consumers therefore wish to purchase the good 
D) less elastic is the demand for that good 
E) more elastic is the demand for that good

Along a perfectly elastic supply curve

If the elasticity of demand is much greater than the elasticity of supply,a subsidy awarded to demanders will

The cross-price elasticity of demand between butter and margarine is most likely

The cross-price elasticity of demand is

If the price of a certain brand of sneakers falls from $27.50 to $22.50,and the quantity demanded by consumers increases from 15 to 25 pairs per week,then the price elasticity of demand is

Which of the following goods is likely to have the least elastic demand over the relevant range of prices?

-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).Given this information,what can be said about the state's demand for public higher education?

The price elasticity of supply

For which of the following medical services is the income elasticity of demand likely to be the smallest?

If the cross-price elasticity of demand between two goods is -2.2,then the

The long-run price elasticity of demand for a good is

When Brenda was in college,she worked part-time delivering pizzas and she ate five boxes of macaroni and cheese per week.After graduation,she became a high school teacher and ate only two boxes of macaroni and cheese per week.From this information,

If demand is price inelastic,

With an income elasticity of demand of 0.5,cigarettes are an example of

A more elastic demand for a good would generally result from

Demand is said to be price inelastic when the coefficient of price elasticity of demand is

The price elasticity of demand is

If the demand for a good is price inelastic,a decrease in total revenue from the good would result from a(n)

Suppose that the income elasticity of demand for college education is 1.3.This indicates that

The more narrowly we define a good,the easier it is to find substitutes,and

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

Along a perfectly elastic supply curve

If the elasticity of demand is much greater than the elasticity of supply,a subsidy awarded to demanders will

The cross-price elasticity of demand between butter and margarine is most likely

The cross-price elasticity of demand is

If the price of a certain brand of sneakers falls from $27.50 to $22.50,and the quantity demanded by consumers increases from 15 to 25 pairs per week,then the price elasticity of demand is

Which of the following goods is likely to have the least elastic demand over the relevant range of prices?

-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).Given this information,what can be said about the state's demand for public higher education?

The price elasticity of supply

For which of the following medical services is the income elasticity of demand likely to be the smallest?

If the cross-price elasticity of demand between two goods is -2.2,then the

The long-run price elasticity of demand for a good is

When Brenda was in college,she worked part-time delivering pizzas and she ate five boxes of macaroni and cheese per week.After graduation,she became a high school teacher and ate only two boxes of macaroni and cheese per week.From this information,

If demand is price inelastic,

With an income elasticity of demand of 0.5,cigarettes are an example of

A more elastic demand for a good would generally result from

Demand is said to be price inelastic when the coefficient of price elasticity of demand is

The price elasticity of demand is

If the demand for a good is price inelastic,a decrease in total revenue from the good would result from a(n)

Suppose that the income elasticity of demand for college education is 1.3.This indicates that

The more narrowly we define a good,the easier it is to find substitutes,and

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