Question 1

The income elasticity of demand measures

Accepted Answer

A) the responsiveness of quantity demanded to changes in income. 
B) how a consumer's purchasing power is affected by a change in the price of a product. 
C) the percentage change in the price of a product divided by the percentage change in consumer income. 
D) the income effect of a change in price. 
A) the responsiveness of quantity demanded to changes in income. 
B) how a consumer's purchasing power is affected by a change in the price of a product. 
C) the percentage change in the price of a product divided by the percentage change in consumer income. 
D) the income effect of a change in price.

Question 2

Table 6-3
  
-Refer to Table 6-3.Over what range of prices is the demand inelastic?

Accepted Answer

A) over the entire range of prices 
B) between $12 and $16 
C) between $8 and $16 
D) between $2 and $8 
A) over the entire range of prices 
B) between $12 and $16 
C) between $8 and $16 
D) between $2 and $8

Question 3

The price elasticity of supply is calculated as the change in supply divided by the change in price.

Accepted Answer

A) True 
 B)False

Question 4

The most important determinant of the price elasticity of demand for a good is

Accepted Answer

A) the definition of the market for a good. 
B) the availability of substitutes for the good. 
C) the share of the good in the consumer's budget. 
D) whether the good is a necessity or a luxury. 
A) the definition of the market for a good. 
B) the availability of substitutes for the good. 
C) the share of the good in the consumer's budget. 
D) whether the good is a necessity or a luxury.

Question 5

Figure 6-9
  
-Refer to Figure 6-9.The data in the diagram indicates that DVDs are

Accepted Answer

A) luxury goods. 
B) inelastic goods. 
C) necessities. 
D) both luxury goods and inelastic goods. 
E) both necessities and inelastic goods. 
A) luxury goods. 
B) inelastic goods. 
C) necessities. 
D) both luxury goods and inelastic goods. 
E) both necessities and inelastic goods.

Question 6

A study of the effects of the minimum wage on employment of low-skilled workers estimated the price elasticity of demand for low-skilled workers is -0.75.Suppose that the government is considering raising the minimum wage from $7.25 per hour to $7.75 per hour.Based on this information, calculate the percentage change in the employment of low skilled workers.Use the midpoint formula.

Accepted Answer

percent ch

Question 7

From 1950 to 2015 the number of people who lived on farms fell from 23 million to fewer than 3 million? Which of the following factors have contributed to this trend?

Accepted Answer

A) increases in the cost of farming and a desire for young adults to move to urban areas 
B) rapid growth in farm production and low income and price elasticities for food products 
C) slow growth in agricultural productivity and low income elasticities for food products 
D) government policies that have increased the cost of living and working on farms 
A) increases in the cost of farming and a desire for young adults to move to urban areas 
B) rapid growth in farm production and low income and price elasticities for food products 
C) slow growth in agricultural productivity and low income elasticities for food products 
D) government policies that have increased the cost of living and working on farms

Question 8

If demand is perfectly inelastic, the absolute value of the price elasticity of demand is

Accepted Answer

A) zero. 
B) less than one. 
C) more than one. 
D) equal to the absolute value of the slope of the demand curve. 
A) zero. 
B) less than one. 
C) more than one. 
D) equal to the absolute value of the slope of the demand curve.

Question 9

The market demand for The Federalist Papers is likely to be more elastic than the market demand for a best-selling mystery novel.

Accepted Answer

A) True 
 B)False

Question 10

Table 6-6
  
-Refer to Table 6-6.Based on the data in the table, between a price of $9.99 and $14.99, the price elasticity of demand for books is

Accepted Answer

A) -0.74. 
B) -1.16. 
C) -1.35. 
D) -14.8. 
A) -0.74. 
B) -1.16. 
C) -1.35. 
D) -14.8.

Question 11

Demand for staples such as dairy products and bread is likely to be both income and price inelastic.

Accepted Answer

A) True 
 B)False

Question 12

Demand for a luxury item, such as a yacht, is likely to be

Accepted Answer

A) both income inelastic and price inelastic. 
B) both income elastic and price elastic. 
C) income elastic and price inelastic. 
D) income inelastic and price elastic. 
A) both income inelastic and price inelastic. 
B) both income elastic and price elastic. 
C) income elastic and price inelastic. 
D) income inelastic and price elastic.

Question 13

At a price of $100, Beachside Canoe Rentals rented 11 canoes.When it increased its rental price to $125, 9 canoes were rented.Calculate the absolute value of the price elasticity of demand for canoe rentals using the midpoint formula.

Accepted Answer

A) 2 
B) 1.25 
C) 0.9 
D) 0.75 
A) 2 
B) 1.25 
C) 0.9 
D) 0.75

Question 14

If the demand for a product is elastic, the quantity demanded changes by a smaller percentage than the percentage change in price.

Accepted Answer

A) True 
 B)False

Question 15

Consider a demand curve that has a constant elasticity value of 0.What happens to quantity demanded and total revenue when price increases?

Accepted Answer

A) The quantity demanded and total revenue remain the same. 
B) The quantity demanded does not change but total revenue increases. 
C) The quantity demanded and total revenue fall to zero. 
D) The quantity demanded does not change but total revenue decreases. 
A) The quantity demanded and total revenue remain the same. 
B) The quantity demanded does not change but total revenue increases. 
C) The quantity demanded and total revenue fall to zero. 
D) The quantity demanded does not change but total revenue decreases.

Question 16

Which of the following is a key determinant of the price elasticity of supply?

Accepted Answer

A) the slope of the supply curve 
B) the availability of substitutes in production 
C) the available technology 
D) the time it takes to change output in response to a change in price 
A) the slope of the supply curve 
B) the availability of substitutes in production 
C) the available technology 
D) the time it takes to change output in response to a change in price

Question 17

The price elasticity of supply measures

Accepted Answer

A) the responsiveness of quantity supplied to changes in input prices. 
B) the responsiveness of quantity supplied to changes in technology. 
C) the responsiveness of quantity supplied to changes in price. 
D) a supplier's ability to produce a good in the face of scarcity. 
A) the responsiveness of quantity supplied to changes in input prices. 
B) the responsiveness of quantity supplied to changes in technology. 
C) the responsiveness of quantity supplied to changes in price. 
D) a supplier's ability to produce a good in the face of scarcity.

Question 18

The price elasticity of supply of hot dog buns is estimated to be 1.5.Holding everything else constant, this means that a 10 percent decrease in the price of hot dog buns will cause the quantity of hot dog buns supplied to decrease by

Accepted Answer

A) 1.5 percent. 
B) 15 percent. 
C) approximately 25 percent. 
D) approximately 5 percent. 
A) 1.5 percent. 
B) 15 percent. 
C) approximately 25 percent. 
D) approximately 5 percent.

Question 19

If a supply curve is a horizontal line, supply is said to be

Accepted Answer

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

Question 20

To calculate the price elasticity of supply, we divide

Accepted Answer

A) the percentage change in price by the percentage change in quantity supplied. 
B) the percentage change in quantity supplied by the percentage change in price. 
C) rise by the run. 
D) the average price by the average quantity supplied. 
A) the percentage change in price by the percentage change in quantity supplied. 
B) the percentage change in quantity supplied by the percentage change in price. 
C) rise by the run. 
D) the average price by the average quantity supplied.

The income elasticity of demand measures

Table 6-3 -Refer to Table 6-3.Over what range of prices is the demand inelastic?

The price elasticity of supply is calculated as the change in supply divided by the change in price.

The most important determinant of the price elasticity of demand for a good is

Figure 6-9 -Refer to Figure 6-9.The data in the diagram indicates that DVDs are

From 1950 to 2015 the number of people who lived on farms fell from 23 million to fewer than 3 million? Which of the following factors have contributed to this trend?

If demand is perfectly inelastic, the absolute value of the price elasticity of demand is

The market demand for The Federalist Papers is likely to be more elastic than the market demand for a best-selling mystery novel.

Table 6-6 -Refer to Table 6-6.Based on the data in the table, between a price of $9.99 and $14.99, the price elasticity of demand for books is

Demand for staples such as dairy products and bread is likely to be both income and price inelastic.

Demand for a luxury item, such as a yacht, is likely to be

At a price of $100, Beachside Canoe Rentals rented 11 canoes.When it increased its rental price to $125, 9 canoes were rented.Calculate the absolute value of the price elasticity of demand for canoe rentals using the midpoint formula.

If the demand for a product is elastic, the quantity demanded changes by a smaller percentage than the percentage change in price.

Consider a demand curve that has a constant elasticity value of 0.What happens to quantity demanded and total revenue when price increases?

Which of the following is a key determinant of the price elasticity of supply?

The price elasticity of supply measures

The price elasticity of supply of hot dog buns is estimated to be 1.5.Holding everything else constant, this means that a 10 percent decrease in the price of hot dog buns will cause the quantity of hot dog buns supplied to decrease by

If a supply curve is a horizontal line, supply is said to be

To calculate the price elasticity of supply, we divide

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

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Exam 6: Elasticity: the Responsiveness of Demand and Supply

The income elasticity of demand measures

Table 6-3 -Refer to Table 6-3.Over what range of prices is the demand inelastic?

The price elasticity of supply is calculated as the change in supply divided by the change in price.

The most important determinant of the price elasticity of demand for a good is

Figure 6-9 -Refer to Figure 6-9.The data in the diagram indicates that DVDs are

From 1950 to 2015 the number of people who lived on farms fell from 23 million to fewer than 3 million? Which of the following factors have contributed to this trend?

If demand is perfectly inelastic, the absolute value of the price elasticity of demand is

The market demand for The Federalist Papers is likely to be more elastic than the market demand for a best-selling mystery novel.

Table 6-6 -Refer to Table 6-6.Based on the data in the table, between a price of $9.99 and $14.99, the price elasticity of demand for books is

Demand for staples such as dairy products and bread is likely to be both income and price inelastic.

Demand for a luxury item, such as a yacht, is likely to be

At a price of $100, Beachside Canoe Rentals rented 11 canoes.When it increased its rental price to $125, 9 canoes were rented.Calculate the absolute value of the price elasticity of demand for canoe rentals using the midpoint formula.

If the demand for a product is elastic, the quantity demanded changes by a smaller percentage than the percentage change in price.

Consider a demand curve that has a constant elasticity value of 0.What happens to quantity demanded and total revenue when price increases?

Which of the following is a key determinant of the price elasticity of supply?

The price elasticity of supply measures

The price elasticity of supply of hot dog buns is estimated to be 1.5.Holding everything else constant, this means that a 10 percent decrease in the price of hot dog buns will cause the quantity of hot dog buns supplied to decrease by

If a supply curve is a horizontal line, supply is said to be

To calculate the price elasticity of supply, we divide

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters