Question 1

The price of beef increased by 20 percent and the quantity supplied increased by 10 percent. The supply of beef is

Accepted Answer

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

Question 2

A product's price elasticity of demand is likely to be greater

Accepted Answer

A) if it only has a few substitutes. 
B) if consumers spend a small proportion of income on the product. 
C) the less time consumers have to adjust to price changes. 
D) if the product is a luxury good rather than a necessity. 
E) Both answers C and D are correct. 
A) if it only has a few substitutes. 
B) if consumers spend a small proportion of income on the product. 
C) the less time consumers have to adjust to price changes. 
D) if the product is a luxury good rather than a necessity. 
E) Both answers C and D are correct. D

Question 3

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 price falls, the quantity demanded increases, but by a smaller percentage than the percentage fall in price. Thus the negative relationship between the price and the quantity demanded remains, and the demand curve still slopes downward, which is the law of demand.

Question 4

Demand is price inelastic if ________ percentage change in the price leads to a ________ percentage change in the quantity demanded.

Accepted Answer

A) a small; large 
B) a large; small 
C) any; large 
D) Both answers A and B are correct. 
E) None of the above answers is correct. 
A) a small; large 
B) a large; small 
C) any; large 
D) Both answers A and B are correct. 
E) None of the above answers is correct.

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

The demand for a good is more elastic if the

Accepted Answer

A) good is a necessity. 
B) good has few substitutes. 
C) good is narrowly defined. 
D) supply of the good is plentiful. 
E) Both answers B and C are correct. 
A) good is a necessity. 
B) good has few substitutes. 
C) good is narrowly defined. 
D) supply of the good is plentiful. 
E) Both answers B and C are correct.

Question 7

Suppose a local photographer increases his prices by 8 percent and quantity demanded decreases by the same percentage. This set of facts indicates that the demand for his services is

Accepted Answer

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

Question 8

You are more sensitive to a change in price if you

Accepted Answer

A) spend a lot of your income on the good. 
B) spend a small percentage of your income on the good. 
C) buy very little of the good. 
D) do not buy the good regularly. 
E) have a very inelastic demand for the good. 
A) spend a lot of your income on the good. 
B) spend a small percentage of your income on the good. 
C) buy very little of the good. 
D) do not buy the good regularly. 
E) have a very inelastic demand for the good.

Question 9

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per pizza) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (pizzas per day) }
\end{array} \
\hline 10 & 100 \
9 & 125 \
\hline
\end{array}$$
-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 price?

Accepted Answer

A) 8.2 percent 
B) 15.5 percent 
C) 10.5 percent 
D) 5.0 percent 
E) 1.0 percent 
A) 8.2 percent 
B) 15.5 percent 
C) 10.5 percent 
D) 5.0 percent 
E) 1.0 percent

Question 10

The figure above shows the demand curve for Starbucks latte.
-In in the figure above, when the price falls from $5 to $4, the price elasticity of demand is

Accepted Answer

A) 2. 
B) 3. 
C) 0.75 
D) 1.5. 
E) 0.33. 
A) 2. 
B) 3. 
C) 0.75 
D) 1.5. 
E) 0.33.

Question 11

$$\begin{array} { c c c } 
& \begin{array} { c } 
\text { Price } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (units per week) }
\end{array} \
\hline A & 100 & 40 \
B & 80 & 60 \
C & 60 & 80 \
D & 40 & 100 \
E & 20 & 120 \
\hline
\end{array}$$
-The table above gives the demand schedule for a good. What is the total revenue at point A?
 At point B?
 At point C?
 At point D?
 At point E?

Accepted Answer

The total revenue is the price multiplie

Question 12

If the income elasticity of demand for a Miami Dolphin season ticket is 2.34, then are Dolphin season tickets a normal or an inferior good?

Accepted Answer

Because the income e

Question 13

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.

Question 14

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 15

If the price doubles and the quantity supplied also doubles, the price elasticity of supply for the good is

Accepted Answer

A) -1. 
B) 1. 
C) -2. 
D) 2. 
E) 100 percent. 
A) -1. 
B) 1. 
C) -2. 
D) 2. 
E) 100 percent.

Question 16

Which of the following is correct?

Accepted Answer

A) The cross elasticity of demand for substitute goods is positive. 
B) The cross elasticity of demand for substitute goods is negative. 
C) The cross elasticity of demand equals the percentage change in demand divided by the percentage change in income. 
D) The income elasticity of demand for a normal good is negative. 
E) The cross elasticity of demand for normal goods is positive. 
A) The cross elasticity of demand for substitute goods is positive. 
B) The cross elasticity of demand for substitute goods is negative. 
C) The cross elasticity of demand equals the percentage change in demand divided by the percentage change in income. 
D) The income elasticity of demand for a normal good is negative. 
E) The cross elasticity of demand for normal goods is positive.

Question 17

The figure above shows the supply curve for roses.
-Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500. Using the midpoint method, the elasticity of demand equals

Accepted Answer

A) 2.10. 
B) 1.11. 
C) 0.90. 
D) 0.72. 
E) None of the above answers is correct. 
A) 2.10. 
B) 1.11. 
C) 0.90. 
D) 0.72. 
E) None of the above answers is correct.

Question 18

If the price of a product increases by 5 percent and the quantity demanded decreases by 5 percent, then the elasticity of demand is

Accepted Answer

A) 0. 
B) 1. 
C) indeterminate. 
D) 5. 
E) 25. 
A) 0. 
B) 1. 
C) indeterminate. 
D) 5. 
E) 25.

Question 19

Suppose the price of a tie rises from $45 to $55. Using the midpoint method, what is the percentage change in price?

Accepted Answer

A) 10 percent 
B) -10 percent 
C) 20 percent 
D) -20 percent 
E) 100 percent 
A) 10 percent 
B) -10 percent 
C) 20 percent 
D) -20 percent 
E) 100 percent

Question 20

Suppose the price of a movie falls from $9 to $7. Using the midpoint method, what is the percentage change in price?

Accepted Answer

A) 33 percent 
B) -33 percent 
C) 25 percent 
D) -25 percent 
E) -97 percent 
A) 33 percent 
B) -33 percent 
C) 25 percent 
D) -25 percent 
E) -97 percent

The price of beef increased by 20 percent and the quantity supplied increased by 10 percent. The supply of beef is

A product's price elasticity of demand is likely to be greater

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

Demand is price inelastic if percentage change in the price leads to a percentage change in the quantity demanded.

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

The demand for a good is more elastic if the

Suppose a local photographer increases his prices by 8 percent and quantity demanded decreases by the same percentage. This set of facts indicates that the demand for his services is

You are more sensitive to a change in price if you

Price (dollars per pizza) Quantity demanded (pizzas per day) 10 100 9 125 -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 price?

The figure above shows the demand curve for Starbucks latte. -In in the figure above, when the price falls from $5 to $4, the price elasticity of demand is

Price (dollars) Quantity demanded (units per week) A 100 40 B 80 60 C 60 80 D 40 100 E 20 120 -The table above gives the demand schedule for a good. What is the total revenue at point A? At point B? At point C? At point D? At point E?

If the income elasticity of demand for a Miami Dolphin season ticket is 2.34, then are Dolphin season tickets a normal or an inferior good?

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 .

If the price doubles and the quantity supplied also doubles, the price elasticity of supply for the good is

Which of the following is correct?

The figure above shows the supply curve for roses. -Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500. Using the midpoint method, the elasticity of demand equals

If the price of a product increases by 5 percent and the quantity demanded decreases by 5 percent, then the elasticity of demand is

Suppose the price of a tie rises from $45 to $55. Using the midpoint method, what is the percentage change in price?

Suppose the price of a movie falls from $9 to $7. Using the midpoint method, what is the percentage change in price?

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 5: Elasticities of Demand and Supply

The price of beef increased by 20 percent and the quantity supplied increased by 10 percent. The supply of beef is

A product's price elasticity of demand is likely to be greater

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

Demand is price inelastic if ________ percentage change in the price leads to a ________ percentage change in the quantity demanded.

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

The demand for a good is more elastic if the

Suppose a local photographer increases his prices by 8 percent and quantity demanded decreases by the same percentage. This set of facts indicates that the demand for his services is

You are more sensitive to a change in price if you

Price (dollars per pizza) Quantity demanded (pizzas per day) 10 100 9 125 -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 price?

The figure above shows the demand curve for Starbucks latte. -In in the figure above, when the price falls from $5 to $4, the price elasticity of demand is

Price (dollars) Quantity demanded (units per week) A 100 40 B 80 60 C 60 80 D 40 100 E 20 120 -The table above gives the demand schedule for a good. What is the total revenue at point A? At point B? At point C? At point D? At point E?

If the income elasticity of demand for a Miami Dolphin season ticket is 2.34, then are Dolphin season tickets a normal or an inferior good?

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 ________.

If the price doubles and the quantity supplied also doubles, the price elasticity of supply for the good is

Which of the following is correct?

The figure above shows the supply curve for roses. -Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500. Using the midpoint method, the elasticity of demand equals

If the price of a product increases by 5 percent and the quantity demanded decreases by 5 percent, then the elasticity of demand is

Suppose the price of a tie rises from $45 to $55. Using the midpoint method, what is the percentage change in price?

Suppose the price of a movie falls from $9 to $7. Using the midpoint method, what is the percentage change in price?

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Demand is price inelastic if percentage change in the price leads to a percentage change in the quantity demanded.

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