Question 1

When the price elasticity of demand is ________, demand for the good is perfectly inelastic.

Accepted Answer

A) equal to infinity 
B) greater than 1 
C) equal to 1 
D) between 1 and zero 
E) equal to zero 
A) equal to infinity 
B) greater than 1 
C) equal to 1 
D) between 1 and zero 
E) equal to zero

Question 2

The price elasticity of demand for oranges ________ if the quantity is measured in pounds instead of kilograms and ________ if the price is measured in dollars instead of cents.

Accepted Answer

A) changes; changes 
B) changes; does not change 
C) does not change; changes 
D) does not change; does not change 
E) increases; decreases 
A) changes; changes 
B) changes; does not change 
C) does not change; changes 
D) does not change; does not change 
E) increases; decreases

Question 3

A negative value for

Accepted Answer

A) price elasticity of supply implies an upward-sloping supply curve. 
B) cross elasticity of demand implies that the goods are complements. 
C) price elasticity of demand implies an inferior good. 
D) income elasticity of demand implies a normal good. 
E) income elasticity of demand implies an error in your calculation. 
A) price elasticity of supply implies an upward-sloping supply curve. 
B) cross elasticity of demand implies that the goods are complements. 
C) price elasticity of demand implies an inferior good. 
D) income elasticity of demand implies a normal good. 
E) income elasticity of demand implies an error in your calculation.

Question 4

Use the table below to answer the following questions.
Table 4.2.2
  
-Refer to Table 4.2.2.The income elasticity of demand for Jolt is

Accepted Answer

A) +0.67. 
B) -0.67. 
C) +1.5. 
D) -1.5. 
E) It cannot be calculated because the price of Coke is not constant. 
A) +0.67. 
B) -0.67. 
C) +1.5. 
D) -1.5. 
E) It cannot be calculated because the price of Coke is not constant.

Question 5

In 2003, when music downloading first took off, Universal Music slashed the average price of a CD from $21 to $15.The company expected the price cut to boost the quantity of CDs sold by 30 percent, other things remaining the same.If you are making the pricing decision at Universal Music, what would you do?

Accepted Answer

A) lower the price because demand is inelastic 
B) raise the price because demand is elastic 
C) raise the price because demand is inelastic 
D) lower the price because demand is elastic 
E) not change the price because demand is unit elastic 
A) lower the price because demand is inelastic 
B) raise the price because demand is elastic 
C) raise the price because demand is inelastic 
D) lower the price because demand is elastic 
E) not change the price because demand is unit elastic

Question 6

A sudden, end-of-summer heat wave increases the demand for air conditioners and catches suppliers with no reserve inventories.The momentary supply for air conditioners is

Accepted Answer

A) perfectly elastic. 
B) perfectly inelastic. 
C) elastic. 
D) shown by an upward-sloping curve. 
E) shown by a horizontal curve. 
A) perfectly elastic. 
B) perfectly inelastic. 
C) elastic. 
D) shown by an upward-sloping curve. 
E) shown by a horizontal curve.

When the price elasticity of demand is ________, demand for the good is perfectly inelastic.

The price elasticity of demand for oranges if the quantity is measured in pounds instead of kilograms and if the price is measured in dollars instead of cents.

A negative value for

Use the table below to answer the following questions. Table 4.2.2 -Refer to Table 4.2.2.The income elasticity of demand for Jolt is

A sudden, end-of-summer heat wave increases the demand for air conditioners and catches suppliers with no reserve inventories.The momentary supply for air conditioners is

What Is Economics

The Economic Problem

Demand and Supply

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 4: Elasticity

When the price elasticity of demand is ________, demand for the good is perfectly inelastic.

The price elasticity of demand for oranges ________ if the quantity is measured in pounds instead of kilograms and ________ if the price is measured in dollars instead of cents.

A negative value for

Use the table below to answer the following questions. Table 4.2.2 -Refer to Table 4.2.2.The income elasticity of demand for Jolt is

A sudden, end-of-summer heat wave increases the demand for air conditioners and catches suppliers with no reserve inventories.The momentary supply for air conditioners is

What Is Economics

The Economic Problem

Demand and Supply

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

The price elasticity of demand for oranges if the quantity is measured in pounds instead of kilograms and if the price is measured in dollars instead of cents.