Question 1

A ________ curve means that ________.

Accepted Answer

A) horizontal demand; a change in price does not change total revenue 
B) horizontal demand; the elasticity of demand is less than 1 
C) horizontal supply; the elasticity of supply is infinite 
D) horizontal supply; the elasticity of demand is infinite 
E) vertical demand; a change in price does not change total revenue 
A) horizontal demand; a change in price does not change total revenue 
B) horizontal demand; the elasticity of demand is less than 1 
C) horizontal supply; the elasticity of supply is infinite 
D) horizontal supply; the elasticity of demand is infinite 
E) vertical demand; a change in price does not change total revenue

Question 2

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

Question 3

The figure above shows the demand curve for Starbucks latte.
-Using the figure above, suppose Starbucks charges $4.50 per cup for its latte. Which of the following is true?
I. At this price, the demand for Starbucks latte is elastic.
Ii. If Starbucks lowers the price of its latte, its revenue will decrease.
Iii. If Starbucks raises the price of its latte, the demand for it will become less elastic.

Accepted Answer

A) Only iii 
B) Only i 
C) Only ii 
D) i and ii 
E) i and iii 
A) Only iii 
B) Only i 
C) Only ii 
D) i and ii 
E) i and iii

Question 4

What are the three cases for the price elasticity of demand?
 Briefly define each.

Accepted Answer

Demand can be elastic, inelastic, or uni

Question 5

To determine the price elasticity of demand, we

Accepted Answer

A) need information on consumers' incomes. 
B) need to know how much is available. 
C) compare the percentage change in the quantity demanded to the percentage change in the price. 
D) compare the change in the quantity to the change in price. 
E) divide the quantity by the price. 
A) need information on consumers' incomes. 
B) need to know how much is available. 
C) compare the percentage change in the quantity demanded to the percentage change in the price. 
D) compare the change in the quantity to the change in price. 
E) divide the quantity by the price.

Question 6

An inferior good has a ________ elasticity of demand.

Accepted Answer

A) positive income 
B) negative income 
C) negative cross 
D) positive cross 
E) negative price 
A) positive income 
B) negative income 
C) negative cross 
D) positive cross 
E) negative price

Question 7

If a 20 percent increase in the price of a good does not change the quantity supplied, the

Accepted Answer

A) supply is perfectly inelastic. 
B) supply is unit elastic. 
C) supply is perfectly elastic. 
D) supply is elastic. 
E) None of the above answers is correct. 
A) supply is perfectly inelastic. 
B) supply is unit elastic. 
C) supply is perfectly elastic. 
D) supply is elastic. 
E) None of the above answers is correct.

Question 8

Goods are ________ when the income elasticity of demand is less than zero.

Accepted Answer

A) substitutes 
B) complements 
C) inferior 
D) elastic 
E) normal 
A) substitutes 
B) complements 
C) inferior 
D) elastic 
E) normal

Question 9

When the percentage change in the quantity supplied is less than the percentage change in price, the supply is

Accepted Answer

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

Question 10

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per pizza) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (pizzas per day) }
\end{array} \
\hline 10 & 100 \
9 & 125 \
\hline
\end{array}$$
-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 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 11

During last year the price of regular unleaded gasoline in Oakland, California increased 11.0 percent. If the price elasticity of demand for gasoline was 0.13, the price hike means that the quantity demanded decreased by

Accepted Answer

A) 1.43 percent. 
B) 8.46 percent. 
C) 0.16 percent. 
D) 4.31 percent. 
E) 6.46 percent. 
A) 1.43 percent. 
B) 8.46 percent. 
C) 0.16 percent. 
D) 4.31 percent. 
E) 6.46 percent.

Question 12

Which of the following statements is correct?

Accepted Answer

A) The demand for New Balance shoes is more elastic than the demand for shoes in general. 
B) The demand for salt is very elastic. 
C) The demand for luxuries is less elastic than the demand for necessities. 
D) The demand for a narrowly defined good is less elastic than the demand for a more broadly defined good. 
E) The larger the proportion of income spent on a good, the smaller the elasticity of demand. 
A) The demand for New Balance shoes is more elastic than the demand for shoes in general. 
B) The demand for salt is very elastic. 
C) The demand for luxuries is less elastic than the demand for necessities. 
D) The demand for a narrowly defined good is less elastic than the demand for a more broadly defined good. 
E) The larger the proportion of income spent on a good, the smaller the elasticity of demand.

Question 13

"The fewer the number of substitutes for a product, the more elastic the demand for that product." Is the previous statement true or false?

Accepted Answer

The statement is false. The greater the

Question 14

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 t

Question 15

If a lower price for good X increases the demand for good Y, the cross elasticity value for the two goods is

Accepted Answer

A) negative. 
B) equal to zero. 
C) positive and less than one. 
D) positive and greater than one. 
E) possibly negative, positive, or zero, but there is not enough information to decide. 
A) negative. 
B) equal to zero. 
C) positive and less than one. 
D) positive and greater than one. 
E) possibly negative, positive, or zero, but there is not enough information to decide.

Question 16

The price elasticity of demand is always positive, as is the price elasticity of supply. Is the cross elasticity of demand always positive?
 Explain your answer.

Accepted Answer

No, the cross elasticity of demand is no

Question 17

When the price of Cosmopolitan magazine decreases from $5 to $3, the quantity demanded increases from 600,000 to 1,000,000 copies each month. Using the midpoint method, the price elasticity of demand equals

Accepted Answer

A) 1. 
B) 3. 
C) 2. 
D) 1/3. 
E) 1/2. 
A) 1. 
B) 3. 
C) 2. 
D) 1/3. 
E) 1/2.

Question 18

Consider two goods: peanut butter and jelly. If the price of jelly increases from $2 a jar to $3 per jar and the quantity demanded of peanut butter decreases from 50 jars to 45 jars, what is the cross elasticity of demand?
 Are the goods substitutes or complements?

Accepted Answer

The cross elasticity

Question 19

When hamburger is $3 per pound, Ms. Rush buys 6 pounds. When hamburger is $2 per pound, Ms. Rush buys 10 pounds. Describe Ms. Rush's demand between these two prices.

Accepted Answer

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

Question 20

If a 4 percent change in the price of a good leads to a 3 percent change in quantity demanded, the price elasticity of demand equals

Accepted Answer

A) 1.33. 
B) 0.75. 
C) 4.00. 
D) 3.44. 
E) None of the above answers are correct. 
A) 1.33. 
B) 0.75. 
C) 4.00. 
D) 3.44. 
E) None of the above answers are correct.

A curve means that .

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

What are the three cases for the price elasticity of demand? Briefly define each.

To determine the price elasticity of demand, we

An inferior good has a ________ elasticity of demand.

If a 20 percent increase in the price of a good does not change the quantity supplied, the

Goods are ________ when the income elasticity of demand is less than zero.

When the percentage change in the quantity supplied is less than the percentage change in price, the supply is

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 the quantity demanded?

During last year the price of regular unleaded gasoline in Oakland, California increased 11.0 percent. If the price elasticity of demand for gasoline was 0.13, the price hike means that the quantity demanded decreased by

Which of the following statements is correct?

"The fewer the number of substitutes for a product, the more elastic the demand for that product." Is the previous statement true or false?

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.

If a lower price for good X increases the demand for good Y, the cross elasticity value for the two goods is

The price elasticity of demand is always positive, as is the price elasticity of supply. Is the cross elasticity of demand always positive? Explain your answer.

When the price of Cosmopolitan magazine decreases from $5 to $3, the quantity demanded increases from 600,000 to 1,000,000 copies each month. Using the midpoint method, the price elasticity of demand equals

Consider two goods: peanut butter and jelly. If the price of jelly increases from $2 a jar to $3 per jar and the quantity demanded of peanut butter decreases from 50 jars to 45 jars, what is the cross elasticity of demand? Are the goods substitutes or complements?

When hamburger is $3 per pound, Ms. Rush buys 6 pounds. When hamburger is $2 per pound, Ms. Rush buys 10 pounds. Describe Ms. Rush's demand between these two prices.

If a 4 percent change in the price of a good leads to a 3 percent change in quantity demanded, the price elasticity of demand equals

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

A ________ curve means that ________.

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

What are the three cases for the price elasticity of demand? Briefly define each.

To determine the price elasticity of demand, we

An inferior good has a ________ elasticity of demand.

If a 20 percent increase in the price of a good does not change the quantity supplied, the

Goods are ________ when the income elasticity of demand is less than zero.

When the percentage change in the quantity supplied is less than the percentage change in price, the supply is

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 the quantity demanded?

During last year the price of regular unleaded gasoline in Oakland, California increased 11.0 percent. If the price elasticity of demand for gasoline was 0.13, the price hike means that the quantity demanded decreased by

Which of the following statements is correct?

"The fewer the number of substitutes for a product, the more elastic the demand for that product." Is the previous statement true or false?

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.

If a lower price for good X increases the demand for good Y, the cross elasticity value for the two goods is

The price elasticity of demand is always positive, as is the price elasticity of supply. Is the cross elasticity of demand always positive? Explain your answer.

When the price of Cosmopolitan magazine decreases from $5 to $3, the quantity demanded increases from 600,000 to 1,000,000 copies each month. Using the midpoint method, the price elasticity of demand equals

Consider two goods: peanut butter and jelly. If the price of jelly increases from $2 a jar to $3 per jar and the quantity demanded of peanut butter decreases from 50 jars to 45 jars, what is the cross elasticity of demand? Are the goods substitutes or complements?

When hamburger is $3 per pound, Ms. Rush buys 6 pounds. When hamburger is $2 per pound, Ms. Rush buys 10 pounds. Describe Ms. Rush's demand between these two prices.

If a 4 percent change in the price of a good leads to a 3 percent change in quantity demanded, the price elasticity of demand equals

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

A curve means that .

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