Question 1

If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a price:

Accepted Answer

A)  increase will decrease total revenue in the short run but increase total revenue in the long run. 
B)  increase will increase total revenue in the short run but decrease total revenue in the long run. 
C)  decrease will increase total revenue in the short run but decrease total revenue in the long run. 
D)  decrease will decrease total revenue in the short run and decrease total revenue in the long run. 
A)  increase will decrease total revenue in the short run but increase total revenue in the long run. 
B)  increase will increase total revenue in the short run but decrease total revenue in the long run. 
C)  decrease will increase total revenue in the short run but decrease total revenue in the long run. 
D)  decrease will decrease total revenue in the short run and decrease total revenue in the long run.

Question 2

When universities announce a large tuition increase and follow it with an announcement that more financial aid will be available, they are assuming that students who pay full tuition:

Accepted Answer

A)  have elastic demand and students who use financial aid have inelastic demand. 
B)  have inelastic demand and students who use financial aid have elastic demand. 
C)  view a college education as an inferior good and students who use financial aid view it as a normal good. 
D)  view a college education as a normal good and students who use financial aid view it as an inferior good. 
A)  have elastic demand and students who use financial aid have inelastic demand. 
B)  have inelastic demand and students who use financial aid have elastic demand. 
C)  view a college education as an inferior good and students who use financial aid view it as a normal good. 
D)  view a college education as a normal good and students who use financial aid view it as an inferior good.

Question 3

- Refer to the table above. Starting at a $5 price, at what price range does demand become inelastic?

Accepted Answer

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

If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a price:

When universities announce a large tuition increase and follow it with an announcement that more financial aid will be available, they are assuming that students who pay full tuition:

- Refer to the table above. Starting at a $5 price, at what price range does demand become inelastic?

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

GDP and Economic Growth

Business Cycles, Unemployment, and Inflation

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Interest Rates and Monetary Policy

International Trade and Exchange Rates

Wage Determination

Income Inequality and Poverty

Filters

Exam 4: Elasticity of Demand and Supply

If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a price:

When universities announce a large tuition increase and follow it with an announcement that more financial aid will be available, they are assuming that students who pay full tuition:

- Refer to the table above. Starting at a $5 price, at what price range does demand become inelastic?

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

GDP and Economic Growth

Business Cycles, Unemployment, and Inflation

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Interest Rates and Monetary Policy

International Trade and Exchange Rates

Wage Determination

Income Inequality and Poverty

Filters