Question 1

Specifically, what might cause the quantity demanded of a particular good to double at a particular price?

Accepted Answer

This results from a rightward shift in t

Question 2

If the elasticity of demand for cigarettes is 0.4, then an increase in the price of a pack of cigarettes from $5.00 to $6.00 would reduce quantities demanded by about

Accepted Answer

A) 7 percent. 
B) 40 percent. 
C) 42 percent. 
D) 220 percent. 
A) 7 percent. 
B) 40 percent. 
C) 42 percent. 
D) 220 percent.

Question 3

Figure 6-5
  
-If the demand curve in Figure 6-5 is unit elastic, then total expenditure at A is ____ total expenditure at B.

Accepted Answer

A) greater than 
B) less than 
C) equal to 
D) less elastic than 
A) greater than 
B) less than 
C) equal to 
D) less elastic than

Question 4

The price elasticity of new automobile purchases is about 1.2.This implies that an increase of $1,000 on a $10,000 automobile will

Accepted Answer

A) reduce the number of autos sold by approximately 1.2 percent. 
B) increase the consumer expenditures on autos by approximately 1.2 percent. 
C) reduce the number of autos sold by approximately 12 percent. 
D) increase consumer expenditures on autos by approximately 12 percent. 
A) reduce the number of autos sold by approximately 1.2 percent. 
B) increase the consumer expenditures on autos by approximately 1.2 percent. 
C) reduce the number of autos sold by approximately 12 percent. 
D) increase consumer expenditures on autos by approximately 12 percent.

Question 5

A demand curve with an elasticity of 1.0 is said to be an elastic demand curve.

Accepted Answer

A) True 
 B)False

Question 6

The demand curve depicts quantities demanded that have been gathered as prices have changed over time.

Accepted Answer

A) True 
 B)False

Question 7

​If demand for a seller's product is elastic, a price decrease will increase total revenue.

Accepted Answer

A) True 
 B)False

Question 8

The quantity demanded in a market depends on many things, but the concept of elasticity focuses on the effect of changes in the price of the good.

Accepted Answer

A) True 
 B)False

Question 9

A demand curve to remain unit elastic along its entire length should

Accepted Answer

A) cross the X axis. 
B) touch the X axis but not the Y axis. 
C) never touch either the X or the Y axis. 
D) touch the Y axis but not the X axis. 
A) cross the X axis. 
B) touch the X axis but not the Y axis. 
C) never touch either the X or the Y axis. 
D) touch the Y axis but not the X axis.

Question 10

In the DuPont cellophane case, rivals accused DuPont of monopolizing cellophane.DuPont claimed that the relevant market was flexible wrapping material, such as wax paper and aluminum foil, rather than just cellophane.DuPont won the case.What type of evidence constituted DuPont's defense?

Accepted Answer

DuPont needed to show that other flexibl

Question 11

If the income of buyers increases and a company maintains the same price, what is the most likely impact on quantity sold?
 Explain.Draw a graphical display of the result.

Accepted Answer

The most likely result will be

Question 12

If demand is unit elastic, revenue

Accepted Answer

A) and price rise and fall together. 
B) rises as price falls. 
C) falls as price rises. 
D) remains constant as price rises or falls. 
A) and price rise and fall together. 
B) rises as price falls. 
C) falls as price rises. 
D) remains constant as price rises or falls.

Question 13

A demand curve is described as perfectly inelastic if

Accepted Answer

A) the same quantity is purchased regardless of price. 
B) the same price is charged regardless of quantity sold. 
C) neither price nor quantity demanded ever change. 
D) only quantity demanded can change. 
A) the same quantity is purchased regardless of price. 
B) the same price is charged regardless of quantity sold. 
C) neither price nor quantity demanded ever change. 
D) only quantity demanded can change.

Question 14

Figure 6-2
  
-In Figure 6-2, the price elasticity of demand (dropping all minus signs) is ____ between P = 4 and P = 6 than between P = 10 and P = 12 because between the lower set of prices the percentage change in price is ____.

Accepted Answer

A) smaller; smaller 
B) smaller; greater 
C) greater; smaller 
D) greater; greater 
A) smaller; smaller 
B) smaller; greater 
C) greater; smaller 
D) greater; greater

Question 15

To avoid an increase in the local property tax, Sullivan County, New York, proposed a 2 percent hotel tax, which presumably would be passed on to tourists.The hotel industry argued that the tax would hurt hotel business.They are really arguing that

Accepted Answer

A) tourist and convention demand is inelastic, so hotel bookings will decline. 
B) tourist and convention demand is very elastic, so hotel bookings will decline. 
C) they would prefer a property tax increase instead. 
D) it is unfair to tax people who do not live in the area. 
A) tourist and convention demand is inelastic, so hotel bookings will decline. 
B) tourist and convention demand is very elastic, so hotel bookings will decline. 
C) they would prefer a property tax increase instead. 
D) it is unfair to tax people who do not live in the area.

Question 16

If there are many close substitutes available for a good, its elasticity of demand will be higher.

Accepted Answer

A) True 
 B)False

Question 17

Two goods with a low cross elasticity of demand are competing in the same market.

Accepted Answer

A) True 
 B)False

Question 18

If the price of apples decreases by 2 percent and causes apple consumption to increase by 4 percent, the price elasticity of demand is ____, indicating the demand is ____.

Accepted Answer

A) 2, elastic 
B) 2, inelastic 
C) 0.5, elastic 
D) 0.5, inelastic 
A) 2, elastic 
B) 2, inelastic 
C) 0.5, elastic 
D) 0.5, inelastic

Question 19

The price elasticity of a horizontal demand curve is always

Accepted Answer

A) infinitely large. 
B) zero. 
C) one. 
D) increasing as price increases. 
A) infinitely large. 
B) zero. 
C) one. 
D) increasing as price increases.

Question 20

The price elasticity of demand for widgets at any particular price is determined by

Accepted Answer

A) whether widgets are luxuries or necessities. 
B) how much of their budgets consumers spend on widgets. 
C) whether there are any good substitutes for widgets. 
D) All of the above are correct. 
A) whether widgets are luxuries or necessities. 
B) how much of their budgets consumers spend on widgets. 
C) whether there are any good substitutes for widgets. 
D) All of the above are correct.

Exam 6: Demand and Elasticity

Specifically, what might cause the quantity demanded of a particular good to double at a particular price?

If the elasticity of demand for cigarettes is 0.4, then an increase in the price of a pack of cigarettes from $5.00 to $6.00 would reduce quantities demanded by about

Figure 6-5 -If the demand curve in Figure 6-5 is unit elastic, then total expenditure at A is ____ total expenditure at B.

The price elasticity of new automobile purchases is about 1.2.This implies that an increase of $1,000 on a $10,000 automobile will

A demand curve with an elasticity of 1.0 is said to be an elastic demand curve.

The demand curve depicts quantities demanded that have been gathered as prices have changed over time.

​If demand for a seller's product is elastic, a price decrease will increase total revenue.

The quantity demanded in a market depends on many things, but the concept of elasticity focuses on the effect of changes in the price of the good.

A demand curve to remain unit elastic along its entire length should

In the DuPont cellophane case, rivals accused DuPont of monopolizing cellophane.DuPont claimed that the relevant market was flexible wrapping material, such as wax paper and aluminum foil, rather than just cellophane.DuPont won the case.What type of evidence constituted DuPont's defense?

If the income of buyers increases and a company maintains the same price, what is the most likely impact on quantity sold? Explain.Draw a graphical display of the result.

If demand is unit elastic, revenue

A demand curve is described as perfectly inelastic if

Figure 6-2 -In Figure 6-2, the price elasticity of demand (dropping all minus signs) is ____ between P = 4 and P = 6 than between P = 10 and P = 12 because between the lower set of prices the percentage change in price is ____.

To avoid an increase in the local property tax, Sullivan County, New York, proposed a 2 percent hotel tax, which presumably would be passed on to tourists.The hotel industry argued that the tax would hurt hotel business.They are really arguing that

If there are many close substitutes available for a good, its elasticity of demand will be higher.

Two goods with a low cross elasticity of demand are competing in the same market.

If the price of apples decreases by 2 percent and causes apple consumption to increase by 4 percent, the price elasticity of demand is ____, indicating the demand is ____.

The price elasticity of a horizontal demand curve is always

The price elasticity of demand for widgets at any particular price is determined by

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

He Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Filters

If demand for a seller's product is elastic, a price decrease will increase total revenue.

Figure 6-2 -In Figure 6-2, the price elasticity of demand (dropping all minus signs) is between P = 4 and P = 6 than between P = 10 and P = 12 because between the lower set of prices the percentage change in price is .

If the price of apples decreases by 2 percent and causes apple consumption to increase by 4 percent, the price elasticity of demand is , indicating the demand is .