Question 1

-In the figure above, using the midpoint method, the price elasticity of demand when the price falls from $8 to $7 is equal to

Accepted Answer

A) 2.50. 
B) 1.63. 
C) 0.40. 
D) 0.62. 
E) 1.00. 
A) 2.50. 
B) 1.63. 
C) 0.40. 
D) 0.62. 
E) 1.00.

Question 2

If a good is a necessity, it has ________ substitutes and its demand is ________.

Accepted Answer

A) poor; elastic 
B) poor; inelastic 
C) many; elastic 
D) many; inelastic 
E) many; precisely unit elastic 
A) poor; elastic 
B) poor; inelastic 
C) many; elastic 
D) many; inelastic 
E) many; precisely unit elastic

Question 3

If the percentage change in quantity demanded is greater than the percentage change in price, can you determine if the demand is elastic, unit elastic, or inelastic? Explain your answer.

Accepted Answer

The demand is elastic.The formula for th

Question 4

The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ changes and all other influences on buyers' plans remain the same.

Accepted Answer

A) income 
B) the price of a related good 
C) the price of the good 
D) the demand alone 
E) both the demand and the supply simultaneously 
A) income 
B) the price of a related good 
C) the price of the good 
D) the demand alone 
E) both the demand and the supply simultaneously

Question 5

Pete feeds his dog 100 percent more Pup-Peronis when Zuke's treats increase in price by 50 percent.For Pete, Pup-Peronis and Zuke's are ________ and the cross-price elasticity of demand is ________.

Accepted Answer

A) complements; -1/2 
B) substitutes; 2 
C) substitutes; -2 
D) complements; 2 
E) substitutes; 1/2 
A) complements; -1/2 
B) substitutes; 2 
C) substitutes; -2 
D) complements; 2 
E) substitutes; 1/2

Question 6

The price of coffee rose 40 percent and the quantity of coffee demanded fell by 20 percent.The quantity of doughnuts demanded also fell by 20 percent.From this information, we can conclude that

Accepted Answer

A) the demand for coffee is elastic. 
B) the demand for coffee is unit elastic. 
C) coffee is an inferior good. 
D) the cross elasticity demand between coffee and doughnuts is -0.5. 
E) the income elasticity of demand for coffee is 2. 
A) the demand for coffee is elastic. 
B) the demand for coffee is unit elastic. 
C) coffee is an inferior good. 
D) the cross elasticity demand between coffee and doughnuts is -0.5. 
E) the income elasticity of demand for coffee is 2.

Question 7

-Using the data in the table above, the demand for skirts is

Accepted Answer

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

Question 8

If a 5 percent decrease in income leads to a 15 percent decrease in the demand for a good, the income elasticity of demand equals

Accepted Answer

A) -1/3 and the good is an inferior good. 
B) 1/3 and demand for the good is income elastic. 
C) 3 and the good is a normal good. 
D) -3 and the demand for the good is income inelastic. 
E) 3 and the good is an inferior good. 
A) -1/3 and the good is an inferior good. 
B) 1/3 and demand for the good is income elastic. 
C) 3 and the good is a normal good. 
D) -3 and the demand for the good is income inelastic. 
E) 3 and the good is an inferior good.

Question 9

-The figure above shows the supply curve for a good with a

Accepted Answer

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

Question 10

Does the fact that the price elasticity of demand for a good is inelastic violate the law of demand?

Accepted Answer

No, if the demand is inelastic, when the

Question 11

Suppose an increase in demand causes the price to increase from $2 to $4 and the quantity to increase from 1,000 to 1,800.Using the midpoint method, the elasticity of supply equals

Accepted Answer

A) 0.86. 
B) 1.17. 
C) 2.74. 
D) 0.68. 
E) None of the above answers is correct. 
A) 0.86. 
B) 1.17. 
C) 2.74. 
D) 0.68. 
E) None of the above answers is correct.

Question 12

-The data in the table above give two points on the demand curve for pizza.Using the midpoint method, when the price of a pizza falls from $10 to $9, what is the percentage change in the quantity demanded?

Accepted Answer

A) 22.2 percent 
B) 10.0 percent 
C) 15.5 percent 
D) 5.2 percent 
E) 25 percent 
A) 22.2 percent 
B) 10.0 percent 
C) 15.5 percent 
D) 5.2 percent 
E) 25 percent

Question 13

-The data in the table above give two points on the demand curve for pizza.Using the midpoint method, when the price of a pizza falls from $10 to $9, what is the price elasticity of demand?

Accepted Answer

A) 0.5 
B) 0.6 
C) 0.9 
D) 2.1 
E) 8.6 
A) 0.5 
B) 0.6 
C) 0.9 
D) 2.1 
E) 8.6

Question 14

List factors that increase the price elasticity of supply.

Accepted Answer

Factors that increase the price elastici

Question 15

-The table above gives Sharon's demand for ground beef at two different income levels.Use the midpoint method in this problem.
a∙What is the percentage change in Sharon's income?
b∙What is the percentage change in the quantity demanded?
c∙What is Sharon's income elasticity of demand for ground beef?
d∙Is ground beef a normal or an inferior good for Sharon?

Accepted Answer

a∙The percentage change in Sharon's inco

Question 16

One reason why the demand for gasoline is inelastic is because

Accepted Answer

A) substitutes for gas abound. 
B) substitutes for gas are hard to find. 
C) gasoline is a luxury item. 
D) people have a long time to shop around for automobiles that use less gas. 
E) buses run on diesel fuel rather than gasoline. 
A) substitutes for gas abound. 
B) substitutes for gas are hard to find. 
C) gasoline is a luxury item. 
D) people have a long time to shop around for automobiles that use less gas. 
E) buses run on diesel fuel rather than gasoline.

Question 17

If the percentage change in price is 10 percent and the demand is elastic, then the percentage change in the quantity demanded

Accepted Answer

A) is greater than 0 percent but less than 10 percent. 
B) is larger than 10 percent. 
C) equals 0 percent. 
D) equals 10 percent. 
E) More information is needed to determine the magnitude of the change in the quantity demanded. 
A) is greater than 0 percent but less than 10 percent. 
B) is larger than 10 percent. 
C) equals 0 percent. 
D) equals 10 percent. 
E) More information is needed to determine the magnitude of the change in the quantity demanded.

Question 18

"If the price falls and, as a result, the total revenue decreases, demand is elastic." Is the previous assertion correct?

Accepted Answer

No, the assertion is incorrect

Question 19

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is

Accepted Answer

A) elastic and total revenue decreases. 
B) elastic and total revenue increases. 
C) inelastic and total revenue decreases. 
D) elastic, but we cannot tell what happens to total revenue without more information. 
E) Total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information. 
A) elastic and total revenue decreases. 
B) elastic and total revenue increases. 
C) inelastic and total revenue decreases. 
D) elastic, but we cannot tell what happens to total revenue without more information. 
E) Total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information.

Question 20

-In the figure above, at the point where the price is $50 per bunch, the price elasticity of supply is

Accepted Answer

A) 2.14. 
B) 0.47. 
C) 1. 
D) 3. 
E) 0.33. 
A) 2.14. 
B) 0.47. 
C) 1. 
D) 3. 
E) 0.33.

-In the figure above, using the midpoint method, the price elasticity of demand when the price falls from $8 to $7 is equal to

If a good is a necessity, it has substitutes and its demand is .

If the percentage change in quantity demanded is greater than the percentage change in price, can you determine if the demand is elastic, unit elastic, or inelastic? Explain your answer.

The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ changes and all other influences on buyers' plans remain the same.

Pete feeds his dog 100 percent more Pup-Peronis when Zuke's treats increase in price by 50 percent.For Pete, Pup-Peronis and Zuke's are and the cross-price elasticity of demand is .

The price of coffee rose 40 percent and the quantity of coffee demanded fell by 20 percent.The quantity of doughnuts demanded also fell by 20 percent.From this information, we can conclude that

-Using the data in the table above, the demand for skirts is

If a 5 percent decrease in income leads to a 15 percent decrease in the demand for a good, the income elasticity of demand equals

-The figure above shows the supply curve for a good with a

Does the fact that the price elasticity of demand for a good is inelastic violate the law of demand?

Suppose an increase in demand causes the price to increase from $2 to $4 and the quantity to increase from 1,000 to 1,800.Using the midpoint method, the elasticity of supply equals

-The data in the table above give two points on the demand curve for pizza.Using the midpoint method, when the price of a pizza falls from $10 to $9, what is the percentage change in the quantity demanded?

-The data in the table above give two points on the demand curve for pizza.Using the midpoint method, when the price of a pizza falls from $10 to $9, what is the price elasticity of demand?

List factors that increase the price elasticity of supply.

One reason why the demand for gasoline is inelastic is because

If the percentage change in price is 10 percent and the demand is elastic, then the percentage change in the quantity demanded

"If the price falls and, as a result, the total revenue decreases, demand is elastic." Is the previous assertion correct?

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is

-In the figure above, at the point where the price is $50 per bunch, the price elasticity of supply 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

-In the figure above, using the midpoint method, the price elasticity of demand when the price falls from $8 to $7 is equal to

If a good is a necessity, it has ________ substitutes and its demand is ________.

If the percentage change in quantity demanded is greater than the percentage change in price, can you determine if the demand is elastic, unit elastic, or inelastic? Explain your answer.

The price elasticity of demand is a measure of the extent to which the quantity demanded of a good changes when ________ changes and all other influences on buyers' plans remain the same.

Pete feeds his dog 100 percent more Pup-Peronis when Zuke's treats increase in price by 50 percent.For Pete, Pup-Peronis and Zuke's are ________ and the cross-price elasticity of demand is ________.

The price of coffee rose 40 percent and the quantity of coffee demanded fell by 20 percent.The quantity of doughnuts demanded also fell by 20 percent.From this information, we can conclude that

-Using the data in the table above, the demand for skirts is

If a 5 percent decrease in income leads to a 15 percent decrease in the demand for a good, the income elasticity of demand equals

-The figure above shows the supply curve for a good with a

Does the fact that the price elasticity of demand for a good is inelastic violate the law of demand?

Suppose an increase in demand causes the price to increase from $2 to $4 and the quantity to increase from 1,000 to 1,800.Using the midpoint method, the elasticity of supply equals

-The data in the table above give two points on the demand curve for pizza.Using the midpoint method, when the price of a pizza falls from $10 to $9, what is the percentage change in the quantity demanded?

-The data in the table above give two points on the demand curve for pizza.Using the midpoint method, when the price of a pizza falls from $10 to $9, what is the price elasticity of demand?

List factors that increase the price elasticity of supply.

One reason why the demand for gasoline is inelastic is because

If the percentage change in price is 10 percent and the demand is elastic, then the percentage change in the quantity demanded

"If the price falls and, as a result, the total revenue decreases, demand is elastic." Is the previous assertion correct?

If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is

-In the figure above, at the point where the price is $50 per bunch, the price elasticity of supply 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 good is a necessity, it has substitutes and its demand is .

Pete feeds his dog 100 percent more Pup-Peronis when Zuke's treats increase in price by 50 percent.For Pete, Pup-Peronis and Zuke's are and the cross-price elasticity of demand is .