Question 1

Total revenue from the sale of a good will decrease if

Accepted Answer

A) income increases and the good is a normal good. 
B) its price rises and demand is elastic. 
C) its price rises and demand is inelastic. 
D) income falls and the good is an inferior good. 
E) its price falls and demand is elastic. 
A) income increases and the good is a normal good. 
B) its price rises and demand is elastic. 
C) its price rises and demand is inelastic. 
D) income falls and the good is an inferior good. 
E) its price falls and demand is elastic.

Question 2

The demand for a good is price inelastic if

Accepted Answer

A) a rise in price results in an increase in total revenue. 
B) a rise in price results in a decrease in total revenue. 
C) an increase in income results in a decrease in total revenue. 
D) an increase in income results in an increase in total revenue. 
E) the good is a luxury. 
A) a rise in price results in an increase in total revenue. 
B) a rise in price results in a decrease in total revenue. 
C) an increase in income results in a decrease in total revenue. 
D) an increase in income results in an increase in total revenue. 
E) the good is a luxury.

Question 3

When the price elasticity of demand is ________, demand for the good is 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 4

Demand is inelastic if

Accepted Answer

A) a small change in price results in a large change in quantity demanded. 
B) the quantity demanded is very responsive to a change in price. 
C) the price elasticity of demand is 0.2. 
D) the price does not change when supply increases. 
E) a 10 percent change in price results in a 1 percent change in the quantity supplied. 
A) a small change in price results in a large change in quantity demanded. 
B) the quantity demanded is very responsive to a change in price. 
C) the price elasticity of demand is 0.2. 
D) the price does not change when supply increases. 
E) a 10 percent change in price results in a 1 percent change in the quantity supplied.

Question 5

If the supply curve passes through the origin, then the price elasticity of supply is

Accepted Answer

A) zero. 
B) 1. 
C) -1. 
D) greater than 1. 
E) less than 1 but greater than zero. 
A) zero. 
B) 1. 
C) -1. 
D) greater than 1. 
E) less than 1 but greater than zero.

Question 6

If a rise in the price of good A from $9 to $11 results in an increase in quantity supplied from 4,000 to 6,000 units, the elasticity of supply is

Accepted Answer

A) 0.5. 
B) 0.8. 
C) 1.0. 
D) 2.0. 
E) 20.0. 
A) 0.5. 
B) 0.8. 
C) 1.0. 
D) 2.0. 
E) 20.0.

Question 7

Use the table below to answer the following questions.
Table 4.2.2
  
-Refer to Table 4.2.2.All of the following statements regarding Jolt are true except

Accepted Answer

A) it has an elastic demand. 
B) it is an inferior good. 
C) it is a substitute for Coke. 
D) it has a negative cross elasticity of demand with respect to Coke. 
E) it has a negative income elasticity of demand. 
A) it has an elastic demand. 
B) it is an inferior good. 
C) it is a substitute for Coke. 
D) it has a negative cross elasticity of demand with respect to Coke. 
E) it has a negative income elasticity of demand.

Question 8

Which one of the following must be true if demand is income inelastic?

Accepted Answer

A) A large percentage increase in income will result in a small percentage increase in quantity demanded. 
B) A small percentage increase in income will result in a large percentage increase in quantity demanded. 
C) An increase in income will decrease the quantity demanded. 
D) The good is an inferior good. 
E) A percentage rise in price increases the quantity demanded by a smaller percentage. 
A) A large percentage increase in income will result in a small percentage increase in quantity demanded. 
B) A small percentage increase in income will result in a large percentage increase in quantity demanded. 
C) An increase in income will decrease the quantity demanded. 
D) The good is an inferior good. 
E) A percentage rise in price increases the quantity demanded by a smaller percentage.

Question 9

At a price of $15, Jack's quantity demanded of good A is the same as when the price rises to $16.Jack's demand for good A is

Accepted Answer

A) elastic. 
B) inelastic. 
C) perfectly elastic. 
D) unit elastic. 
E) perfectly inelastic. 
A) elastic. 
B) inelastic. 
C) perfectly elastic. 
D) unit elastic. 
E) perfectly inelastic.

Question 10

If the cross elasticity of demand between beef and bison is 1.5, then a 3 percent increase in the price of beef will lead to

Accepted Answer

A) a 4.5 percent increase in the quantity of bison demanded. 
B) a 4.5 percent decrease in the quantity of bison demanded. 
C) a 2 percent increase in the quantity of bison demanded. 
D) a 2 percent decrease in the quantity of bison demanded. 
E) a 0.5 percent increase in the quantity of bison demanded. 
A) a 4.5 percent increase in the quantity of bison demanded. 
B) a 4.5 percent decrease in the quantity of bison demanded. 
C) a 2 percent increase in the quantity of bison demanded. 
D) a 2 percent decrease in the quantity of bison demanded. 
E) a 0.5 percent increase in the quantity of bison demanded.

Question 11

Use the table below to answer the following questions.
Table 4.1.1
Demand schedule for good A.
  
-Refer to Table 4.1.1.The price elasticity of demand when the price rises from $6 a unit to $7 a unit is

Accepted Answer

A) 1.0. 
B) 2.0. 
C) 2.6. 
D) 0.5. 
E) 1.3. 
A) 1.0. 
B) 2.0. 
C) 2.6. 
D) 0.5. 
E) 1.3.

Question 12

Use the table below to answer the following questions.
Table 4.1.1
Demand schedule for good A.
  
-Refer to Table 4.1.1.Demand is unit elastic when the price falls from

Accepted Answer

A) $8 to $7. 
B) $7 to $6. 
C) $6 to $5. 
D) $5 to $4. 
E) $4 to $3. 
A) $8 to $7. 
B) $7 to $6. 
C) $6 to $5. 
D) $5 to $4. 
E) $4 to $3.

Question 13

If the quantity of carrots demanded increases by a small percentage when income increases by a large amount, we know that the demand for carrots is

Accepted Answer

A) price elastic. 
B) price inelastic. 
C) income inferior. 
D) income elastic. 
E) income inelastic. 
A) price elastic. 
B) price inelastic. 
C) income inferior. 
D) income elastic. 
E) income inelastic.

Question 14

The price of oranges rises by 3 percent and quantity of oranges demanded decreases by 3 percent.We conclude that the demand for oranges is

Accepted Answer

A) inelastic. 
B) elastic. 
C) perfectly inelastic. 
D) perfect elastic. 
E) unit elastic. 
A) inelastic. 
B) elastic. 
C) perfectly inelastic. 
D) perfect elastic. 
E) unit elastic.

Question 15

Suppose the government of Nova Scotia wants to reduce the consumption of electricity by 5 percent.The price elasticity of demand for electricity is 0.40.You advise the Nova Scotia government to

Accepted Answer

A) raise the price of electricity by 12.5 percent. 
B) raise the price of electricity by 2 percent. 
C) lower the price of electricity by 12.5 percent. 
D) stay away from the market for electricity and let the market mechanism fix the problem. 
E) lower the price of electricity by 2 percent. 
A) raise the price of electricity by 12.5 percent. 
B) raise the price of electricity by 2 percent. 
C) lower the price of electricity by 12.5 percent. 
D) stay away from the market for electricity and let the market mechanism fix the problem. 
E) lower the price of electricity by 2 percent.

Question 16

Supply is inelastic if

Accepted Answer

A) a small percentage change in price results in a large percentage change in quantity supplied. 
B) a large percentage change in price results in a small percentage change in quantity supplied. 
C) the good is a normal good. 
D) the good is an inferior good. 
E) the good has many substitutes. 
A) a small percentage change in price results in a large percentage change in quantity supplied. 
B) a large percentage change in price results in a small percentage change in quantity supplied. 
C) the good is a normal good. 
D) the good is an inferior good. 
E) the good has many substitutes.

Question 17

If the demand for salmon in Cape Breton, Nova Scotia, is unit elastic, the price elasticity of demand for salmon equals

Accepted Answer

A) 1.0. 
B) 100.0. 
C) 0.10. 
D) zero. 
E) 10.0. 
A) 1.0. 
B) 100.0. 
C) 0.10. 
D) zero. 
E) 10.0.

Question 18

If the income elasticity of demand for chocolate chip cookies is 1.84, then chocolate chip cookies are

Accepted Answer

A) a normal good and income elastic. 
B) a normal good and income inelastic. 
C) also price elastic. 
D) an inferior good and income elastic. 
E) an inferior good and income inelastic. 
A) a normal good and income elastic. 
B) a normal good and income inelastic. 
C) also price elastic. 
D) an inferior good and income elastic. 
E) an inferior good and income inelastic.

Question 19

If price elasticity of demand is zero, then as the price falls,

Accepted Answer

A) total revenue does not change. 
B) quantity demanded does not change. 
C) quantity demanded falls to zero. 
D) total revenue increases. 
E) quantity demanded increases. 
A) total revenue does not change. 
B) quantity demanded does not change. 
C) quantity demanded falls to zero. 
D) total revenue increases. 
E) quantity demanded increases.

Question 20

If good A is a substitute for good B, then the cross elasticity of demand is

Accepted Answer

A) 12. 
B) infinity. 
C) positive. 
D) zero. 
E) less than zero. 
A) 12. 
B) infinity. 
C) positive. 
D) zero. 
E) less than zero.

Total revenue from the sale of a good will decrease if

The demand for a good is price inelastic if

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

Demand is inelastic if

If the supply curve passes through the origin, then the price elasticity of supply is

If a rise in the price of good A from $9 to $11 results in an increase in quantity supplied from 4,000 to 6,000 units, the elasticity of supply is

Use the table below to answer the following questions. Table 4.2.2 -Refer to Table 4.2.2.All of the following statements regarding Jolt are true except

Which one of the following must be true if demand is income inelastic?

At a price of $15, Jack's quantity demanded of good A is the same as when the price rises to $16.Jack's demand for good A is

If the cross elasticity of demand between beef and bison is 1.5, then a 3 percent increase in the price of beef will lead to

Use the table below to answer the following questions. Table 4.1.1 Demand schedule for good A. -Refer to Table 4.1.1.The price elasticity of demand when the price rises from $6 a unit to $7 a unit is

Use the table below to answer the following questions. Table 4.1.1 Demand schedule for good A. -Refer to Table 4.1.1.Demand is unit elastic when the price falls from

If the quantity of carrots demanded increases by a small percentage when income increases by a large amount, we know that the demand for carrots is

The price of oranges rises by 3 percent and quantity of oranges demanded decreases by 3 percent.We conclude that the demand for oranges is

Suppose the government of Nova Scotia wants to reduce the consumption of electricity by 5 percent.The price elasticity of demand for electricity is 0.40.You advise the Nova Scotia government to

Supply is inelastic if

If the demand for salmon in Cape Breton, Nova Scotia, is unit elastic, the price elasticity of demand for salmon equals

If the income elasticity of demand for chocolate chip cookies is 1.84, then chocolate chip cookies are

If price elasticity of demand is zero, then as the price falls,

If good A is a substitute for good B, then the cross elasticity of demand 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

Total revenue from the sale of a good will decrease if

The demand for a good is price inelastic if

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

Demand is inelastic if

If the supply curve passes through the origin, then the price elasticity of supply is

If a rise in the price of good A from $9 to $11 results in an increase in quantity supplied from 4,000 to 6,000 units, the elasticity of supply is

Use the table below to answer the following questions. Table 4.2.2 -Refer to Table 4.2.2.All of the following statements regarding Jolt are true except

Which one of the following must be true if demand is income inelastic?

At a price of $15, Jack's quantity demanded of good A is the same as when the price rises to $16.Jack's demand for good A is

If the cross elasticity of demand between beef and bison is 1.5, then a 3 percent increase in the price of beef will lead to

Use the table below to answer the following questions. Table 4.1.1 Demand schedule for good A. -Refer to Table 4.1.1.The price elasticity of demand when the price rises from $6 a unit to $7 a unit is

Use the table below to answer the following questions. Table 4.1.1 Demand schedule for good A. -Refer to Table 4.1.1.Demand is unit elastic when the price falls from

If the quantity of carrots demanded increases by a small percentage when income increases by a large amount, we know that the demand for carrots is

The price of oranges rises by 3 percent and quantity of oranges demanded decreases by 3 percent.We conclude that the demand for oranges is

Suppose the government of Nova Scotia wants to reduce the consumption of electricity by 5 percent.The price elasticity of demand for electricity is 0.40.You advise the Nova Scotia government to

Supply is inelastic if

If the demand for salmon in Cape Breton, Nova Scotia, is unit elastic, the price elasticity of demand for salmon equals

If the income elasticity of demand for chocolate chip cookies is 1.84, then chocolate chip cookies are

If price elasticity of demand is zero, then as the price falls,

If good A is a substitute for good B, then the cross elasticity of demand 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