Question 1

The measure used to determine whether two products are complements or substitutes is called the

Accepted Answer

A) price elasticity of supply. 
B) cross elasticity of demand. 
C) price elasticity of demand. 
D) income elasticity. 
E) substitute elasticity of demand. 
A) price elasticity of supply. 
B) cross elasticity of demand. 
C) price elasticity of demand. 
D) income elasticity. 
E) substitute elasticity of demand. B

Question 2

-Based on the data in the table above, ice cream and cake are ________ goods.

Accepted Answer

A) inferior 
B) normal 
C) substitute 
D) complementary 
E) Both answers B and D are correct. 
A) inferior 
B) normal 
C) substitute 
D) complementary 
E) Both answers B and D are correct. D

Question 3

-Using the data in the table above, when the price of a skirt rises from $20 to $35, what is the price elasticity of demand? (Use the midpoint method.)

Accepted Answer

A) 0.33 
B) 0.25 
C) 1.00 
D) 1.33 
E) 3.00 
A) 0.33 
B) 0.25 
C) 1.00 
D) 1.33 
E) 3.00 A

Question 4

-The demand curve shown in the figure above is ________ over the price range from $95 to $105 per unit.

Accepted Answer

A) perfectly elastic 
B) perfectly inelastic 
C) unit elastic 
D) elastic but not perfectly elastic 
E) inelastic but not perfectly inelastic 
A) perfectly elastic 
B) perfectly inelastic 
C) unit elastic 
D) elastic but not perfectly elastic 
E) inelastic but not perfectly inelastic

Question 5

Tennis balls and tennis rackets are complements.If a 3 percent change in the price of a tennis racket leads to a 9 change in the quantity of tennis balls demanded, the cross elasticity of demand equals

Accepted Answer

A) 3. 
B) -3. 
C) 1/3. 
D) -1/3. 
E) 9. 
A) 3. 
B) -3. 
C) 1/3. 
D) -1/3. 
E) 9.

Question 6

Moving downward along a linear (straight-line)downward sloping demand curve, the

Accepted Answer

A) slope is constant. 
B) price is constant. 
C) quantity is constant. 
D) elasticity is constant. 
E) None of the above answers is correct. 
A) slope is constant. 
B) price is constant. 
C) quantity is constant. 
D) elasticity is constant. 
E) None of the above answers is correct.

Question 7

The demand for a necessity generally is

Accepted Answer

A) very elastic. 
B) infinitely elastic. 
C) unaffected by income. 
D) inelastic. 
E) unit elastic. 
A) very elastic. 
B) infinitely elastic. 
C) unaffected by income. 
D) inelastic. 
E) unit elastic.

Question 8

How are the cross elasticity of demand and income elasticity of demand similar and how are they different from the price elasticity of demand?

Accepted Answer

The cross and income elasticities are si

Question 9

Suppose a good can be produced using commonly available resources.The elasticity of supply is

Accepted Answer

A) negative. 
B) greater than zero but less than 1. 
C) greater than 1. 
D) zero. 
E) More information is needed to make a determination about the size of the elasticity of supply. 
A) negative. 
B) greater than zero but less than 1. 
C) greater than 1. 
D) zero. 
E) More information is needed to make a determination about the size of the elasticity of supply.

Question 10

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method, what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

Accepted Answer

The price elasticity of demand is 0.23.(

Question 11

If the cross elasticity of demand between two goods is negative, are the goods substitutes or complements?

Accepted Answer

If the cross elastic

Question 12

The cross elasticity of demand is a measure of how

Accepted Answer

A) responsive consumers are to changes in the price of a product. 
B) responsive suppliers are to changes in the price of a product. 
C) demand for a product changes when the price of a substitute or complement changes. 
D) total revenue changes when the price of a product changes. 
E) demand for a product changes when income changes. 
A) responsive consumers are to changes in the price of a product. 
B) responsive suppliers are to changes in the price of a product. 
C) demand for a product changes when the price of a substitute or complement changes. 
D) total revenue changes when the price of a product changes. 
E) demand for a product changes when income changes.

Question 13

If the cross elasticity of demand for DVD players and DVDs equals -2, then the products are

Accepted Answer

A) unrelated. 
B) complements. 
C) inferior goods. 
D) substitutes. 
E) normal goods. 
A) unrelated. 
B) complements. 
C) inferior goods. 
D) substitutes. 
E) normal goods.

Question 14

In a study session, your friend says, "Demand is elastic if the percentage change in the price exceeds the percentage change in quantity demanded." Is your friend correct?

Accepted Answer

No, your friend is incorrect.D

Question 15

If a 2 percent change in price leads to a ________ percent change in the quantity demanded, then demand is ________.

Accepted Answer

A) 2; elastic 
B) 1; unit elastic 
C) 3; inelastic 
D) 4; elastic 
E) 0; perfectly elastic 
A) 2; elastic 
B) 1; unit elastic 
C) 3; inelastic 
D) 4; elastic 
E) 0; perfectly elastic

Question 16

-Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units.Using the midpoint method, the elasticity of demand equals

Accepted Answer

A) 1.17. 
B) 0.85. 
C) 0.26. 
D) 1.56. 
E) None of the above answers is correct. 
A) 1.17. 
B) 0.85. 
C) 0.26. 
D) 1.56. 
E) None of the above answers is correct.

Question 17

Demand for a product tends to be more elastic the longer the time period considered because

Accepted Answer

A) sellers have more time to expand production. 
B) buyers have more time to search for substitutes. 
C) price increases over time make the price larger relative to buyers' incomes. 
D) the inverse relationship between the price and the quantity demanded weakens over time. 
E) buyers get used to the new price. 
A) sellers have more time to expand production. 
B) buyers have more time to search for substitutes. 
C) price increases over time make the price larger relative to buyers' incomes. 
D) the inverse relationship between the price and the quantity demanded weakens over time. 
E) buyers get used to the new price.

Question 18

The income elasticity of demand for skiing trips to Vermont is greater than one.Thus a trip to Vermont for skiing is ________ good.

Accepted Answer

A) a normal 
B) an inferior 
C) a unit elastic 
D) a price elastic 
E) a price inelastic 
A) a normal 
B) an inferior 
C) a unit elastic 
D) a price elastic 
E) a price inelastic

Question 19

When the price of a pizza is $10, the quantity of soda demanded is 300 drinks.When the price of a pizza is $15, the quantity soda demanded is 100 drinks.The cross elasticity of demand is equal to

Accepted Answer

A) -0.25. 
B) -0.40. 
C) -2.50. 
D) -25.00. 
E) 4.00. 
A) -0.25. 
B) -0.40. 
C) -2.50. 
D) -25.00. 
E) 4.00.

Question 20

-The demand curve shown in the figure above reflects demand that is

Accepted Answer

A) perfectly elastic. 
B) perfectly inelastic. 
C) unit elastic. 
D) elastic but not perfectly elastic. 
E) inelastic but not perfectly inelastic. 
A) perfectly elastic. 
B) perfectly inelastic. 
C) unit elastic. 
D) elastic but not perfectly elastic. 
E) inelastic but not perfectly inelastic.

The measure used to determine whether two products are complements or substitutes is called the

-Based on the data in the table above, ice cream and cake are ________ goods.

-Using the data in the table above, when the price of a skirt rises from $20 to $35, what is the price elasticity of demand? (Use the midpoint method.)

-The demand curve shown in the figure above is ________ over the price range from $95 to $105 per unit.

Tennis balls and tennis rackets are complements.If a 3 percent change in the price of a tennis racket leads to a 9 change in the quantity of tennis balls demanded, the cross elasticity of demand equals

Moving downward along a linear (straight-line)downward sloping demand curve, the

The demand for a necessity generally is

How are the cross elasticity of demand and income elasticity of demand similar and how are they different from the price elasticity of demand?

Suppose a good can be produced using commonly available resources.The elasticity of supply is

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method, what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

If the cross elasticity of demand between two goods is negative, are the goods substitutes or complements?

The cross elasticity of demand is a measure of how

If the cross elasticity of demand for DVD players and DVDs equals -2, then the products are

In a study session, your friend says, "Demand is elastic if the percentage change in the price exceeds the percentage change in quantity demanded." Is your friend correct?

If a 2 percent change in price leads to a percent change in the quantity demanded, then demand is .

-Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units.Using the midpoint method, the elasticity of demand equals

Demand for a product tends to be more elastic the longer the time period considered because

The income elasticity of demand for skiing trips to Vermont is greater than one.Thus a trip to Vermont for skiing is ________ good.

When the price of a pizza is $10, the quantity of soda demanded is 300 drinks.When the price of a pizza is $15, the quantity soda demanded is 100 drinks.The cross elasticity of demand is equal to

-The demand curve shown in the figure above reflects demand that is

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 5: Elasticities of Demand and Supply

The measure used to determine whether two products are complements or substitutes is called the

-Based on the data in the table above, ice cream and cake are ________ goods.

-Using the data in the table above, when the price of a skirt rises from $20 to $35, what is the price elasticity of demand? (Use the midpoint method.)

-The demand curve shown in the figure above is ________ over the price range from $95 to $105 per unit.

Tennis balls and tennis rackets are complements.If a 3 percent change in the price of a tennis racket leads to a 9 change in the quantity of tennis balls demanded, the cross elasticity of demand equals

Moving downward along a linear (straight-line)downward sloping demand curve, the

The demand for a necessity generally is

How are the cross elasticity of demand and income elasticity of demand similar and how are they different from the price elasticity of demand?

Suppose a good can be produced using commonly available resources.The elasticity of supply is

Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds.Using the midpoint method, what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

If the cross elasticity of demand between two goods is negative, are the goods substitutes or complements?

The cross elasticity of demand is a measure of how

If the cross elasticity of demand for DVD players and DVDs equals -2, then the products are

In a study session, your friend says, "Demand is elastic if the percentage change in the price exceeds the percentage change in quantity demanded." Is your friend correct?

If a 2 percent change in price leads to a ________ percent change in the quantity demanded, then demand is ________.

-Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units.Using the midpoint method, the elasticity of demand equals

Demand for a product tends to be more elastic the longer the time period considered because

The income elasticity of demand for skiing trips to Vermont is greater than one.Thus a trip to Vermont for skiing is ________ good.

When the price of a pizza is $10, the quantity of soda demanded is 300 drinks.When the price of a pizza is $15, the quantity soda demanded is 100 drinks.The cross elasticity of demand is equal to

-The demand curve shown in the figure above reflects demand that is

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

If a 2 percent change in price leads to a percent change in the quantity demanded, then demand is .