Question 1

When supply is perfectly inelastic, the supply curve is

Accepted Answer

A) upward sloping but not a straight line. 
B) vertical. 
C) downward sloping. 
D) horizontal. 
E) a straight line with a 45 degree slope that goes through the origin. 
A) upward sloping but not a straight line. 
B) vertical. 
C) downward sloping. 
D) horizontal. 
E) a straight line with a 45 degree slope that goes through the origin.

Question 2

The price elasticity of supply equals the percentage change in the

Accepted Answer

A) quantity demanded divided by the percentage change in the price of a substitute or complement. 
B) quantity supplied divided by the percentage change in price. 
C) quantity demanded divided by the percentage change in price. 
D) supply divided by the percentage change in the demand. 
E) quantity supplied divided by the percentage change in the quantity demanded. 
A) quantity demanded divided by the percentage change in the price of a substitute or complement. 
B) quantity supplied divided by the percentage change in price. 
C) quantity demanded divided by the percentage change in price. 
D) supply divided by the percentage change in the demand. 
E) quantity supplied divided by the percentage change in the quantity demanded.

Question 3

When the price of Ford pickup trucks rises from $18,000 to $19,000, the quantity of Chevy trucks demanded increases from 112,000 to 144,000. What does the cross elasticity of demand between Ford and Chevy trucks equal?

Accepted Answer

In this case, the cross elasticity of de

Question 4

A firm can sell 10 units if the price is $100 and can sell 8 units if the price is $125. Using the midpoint method, what is the price elasticity of demand?

Accepted Answer

A) 0.75 
B) 1.00 
C) 1.25 
D) 0.50 
E) 0.0 
A) 0.75 
B) 1.00 
C) 1.25 
D) 0.50 
E) 0.0

Question 5

Suppose a 20 percent increase in the price of gasoline results in a 25 percent increase in the quantity supplied. This response means that gasoline has

Accepted Answer

A) an elastic supply. 
B) an inelastic supply. 
C) a unit elastic supply. 
D) an inelastic demand. 
E) an elastic demand. 
A) an elastic supply. 
B) an inelastic supply. 
C) a unit elastic supply. 
D) an inelastic demand. 
E) an elastic demand.

Question 6

If the price of a a good increases by 10 percent and the quantity supplied increases by 5 percent, then the elasticity of supply is

Accepted Answer

A) greater than one and supply is elastic. 
B) negative and supply is inelastic. 
C) less than one and supply is elastic. 
D) less than one and supply is inelastic. 
E) greater than one and supply is inelastic. 
A) greater than one and supply is elastic. 
B) negative and supply is inelastic. 
C) less than one and supply is elastic. 
D) less than one and supply is inelastic. 
E) greater than one and supply is inelastic.

Question 7

If the price elasticity of supply for a good is 10, then supply is

Accepted Answer

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

Question 8

Water is considered a necessity. So, is the demand for water elastic or inelastic?

Accepted Answer

The demand for neces

Question 9

The income elasticity of demand for foreign travel

Accepted Answer

A) is likely to be smaller than the income elasticity of demand for food. 
B) is likely to be larger than the income elasticity of demand for food. 
C) cannot be compared to the income elasticity of demand for food. 
D) is likely to be inelastic. 
E) is likely to be negative. 
A) is likely to be smaller than the income elasticity of demand for food. 
B) is likely to be larger than the income elasticity of demand for food. 
C) cannot be compared to the income elasticity of demand for food. 
D) is likely to be inelastic. 
E) is likely to be negative.

Question 10

Suppose the San Francisco 49ers lower ticket prices by 15 percent and as a result the quantity of tickets demanded increases by 10 percent. This set of results shows that San Francisco 49ers tickets have

Accepted Answer

A) an inelastic demand. 
B) an elastic demand. 
C) a unit elastic demand. 
D) an inelastic supply. 
E) an elastic supply. 
A) an inelastic demand. 
B) an elastic demand. 
C) a unit elastic demand. 
D) an inelastic supply. 
E) an elastic supply.

Question 11

-The figure above shows the demand curve for pizza. Using the midpoint method and moving from point A to point B, calculate the
a. percentage change in price.
b. percentage change in quantity demanded.
c. price elasticity of demand.

Accepted Answer

a. Between points A and B, the

Question 12

-In the figure above, what happens to total revenue as we move from point A to point B?

Accepted Answer

A) It increases. 
B) It decreases. 
C) It remains constant. 
D) It becomes negative. 
E) More information about the elasticity of demand is needed to determine if it increases, decreases, or does not change. 
A) It increases. 
B) It decreases. 
C) It remains constant. 
D) It becomes negative. 
E) More information about the elasticity of demand is needed to determine if it increases, decreases, or does not change.

Question 13

The price elasticity of demand measures which of the following?

Accepted Answer

A) the slope of the demand curve 
B) the rate at which demand changes when price changes 
C) how responsive the quantity demanded is to changes in price 
D) the percentage-slope of the demand curve 
E) None of these correctly defines what price elasticity of demand measures. 
A) the slope of the demand curve 
B) the rate at which demand changes when price changes 
C) how responsive the quantity demanded is to changes in price 
D) the percentage-slope of the demand curve 
E) None of these correctly defines what price elasticity of demand measures.

Question 14

When income increases from $30,000 a year to $40,000 a year, the quantity demanded of weekend vacations by Sara increases from 2 a year to 5 a year. For Sara, the income elasticity of demand of weekend vacations is ________ and weekend vacations are ________ good.

Accepted Answer

A) 3; a normal 
B) 4.5 a normal 
C) 1/3; an inferior 
D) -4.5; an inferior 
E) 1/3; a normal 
A) 3; a normal 
B) 4.5 a normal 
C) 1/3; an inferior 
D) -4.5; an inferior 
E) 1/3; a normal

Question 15

The price elasticity of demand for an agricultural product is 0.4. This value means that, when the quantity decreases 1 percent, the price

Accepted Answer

A) falls 4 percent. 
B) rises 4 percent. 
C) falls 2.5 percent. 
D) rises 2.5 percent. 
E) rises 0.25 percent. 
A) falls 4 percent. 
B) rises 4 percent. 
C) falls 2.5 percent. 
D) rises 2.5 percent. 
E) rises 0.25 percent.

Question 16

The income elasticity of demand is a measure of

Accepted Answer

A) how demand for a product changes when the price of a substitute or complement product changes. 
B) how responsive consumers are to changes in the price of a product. 
C) how responsive suppliers are to changes in the price of a product. 
D) the extent to which the demand for a good changes when income changes. 
E) the extent to which the supply of a good changes when the demand changes as a result of a change in income. 
A) how demand for a product changes when the price of a substitute or complement product changes. 
B) how responsive consumers are to changes in the price of a product. 
C) how responsive suppliers are to changes in the price of a product. 
D) the extent to which the demand for a good changes when income changes. 
E) the extent to which the supply of a good changes when the demand changes as a result of a change in income.

Question 17

The price elasticity of demand is a measure of

Accepted Answer

A) the equilibrium price of a product. 
B) buyers' responsiveness to changes in the price of a product. 
C) the amount of a product purchased when income increases. 
D) whether a product is a substitute or a complement. 
E) how much a change in demand affects the equilibrium price. 
A) the equilibrium price of a product. 
B) buyers' responsiveness to changes in the price of a product. 
C) the amount of a product purchased when income increases. 
D) whether a product is a substitute or a complement. 
E) how much a change in demand affects the equilibrium price.

Question 18

The fact that there is a very limited amount of land in Hong Kong means the supply of new apartments in Hong Kong is

Accepted Answer

A) inelastic. 
B) elastic. 
C) unit elastic. 
D) perfectly elastic. 
E) limited by the demand. 
A) inelastic. 
B) elastic. 
C) unit elastic. 
D) perfectly elastic. 
E) limited by the demand.

Question 19

If the percentage change in the price of a good exceeds the percentage change in the quantity supplied, then the supply is

Accepted Answer

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

Question 20

During the winter of 2011-2012, the price of fuel oil increased enormously but the quantity demanded decreased only a little. This response indicates that the demand for fuel oil was

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.

When supply is perfectly inelastic, the supply curve is

The price elasticity of supply equals the percentage change in the

When the price of Ford pickup trucks rises from $18,000 to $19,000, the quantity of Chevy trucks demanded increases from 112,000 to 144,000. What does the cross elasticity of demand between Ford and Chevy trucks equal?

A firm can sell 10 units if the price is $100 and can sell 8 units if the price is $125. Using the midpoint method, what is the price elasticity of demand?

Suppose a 20 percent increase in the price of gasoline results in a 25 percent increase in the quantity supplied. This response means that gasoline has

If the price of a a good increases by 10 percent and the quantity supplied increases by 5 percent, then the elasticity of supply is

If the price elasticity of supply for a good is 10, then supply is

Water is considered a necessity. So, is the demand for water elastic or inelastic?

The income elasticity of demand for foreign travel

Suppose the San Francisco 49ers lower ticket prices by 15 percent and as a result the quantity of tickets demanded increases by 10 percent. This set of results shows that San Francisco 49ers tickets have

-The figure above shows the demand curve for pizza. Using the midpoint method and moving from point A to point B, calculate the a. percentage change in price. b. percentage change in quantity demanded. c. price elasticity of demand.

-In the figure above, what happens to total revenue as we move from point A to point B?

The price elasticity of demand measures which of the following?

When income increases from $30,000 a year to $40,000 a year, the quantity demanded of weekend vacations by Sara increases from 2 a year to 5 a year. For Sara, the income elasticity of demand of weekend vacations is and weekend vacations are good.

The price elasticity of demand for an agricultural product is 0.4. This value means that, when the quantity decreases 1 percent, the price

The income elasticity of demand is a measure of

The price elasticity of demand is a measure of

The fact that there is a very limited amount of land in Hong Kong means the supply of new apartments in Hong Kong is

If the percentage change in the price of a good exceeds the percentage change in the quantity supplied, then the supply is

During the winter of 2011-2012, the price of fuel oil increased enormously but the quantity demanded decreased only a little. This response indicates that the demand for fuel oil was

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

When supply is perfectly inelastic, the supply curve is

The price elasticity of supply equals the percentage change in the

When the price of Ford pickup trucks rises from $18,000 to $19,000, the quantity of Chevy trucks demanded increases from 112,000 to 144,000. What does the cross elasticity of demand between Ford and Chevy trucks equal?

A firm can sell 10 units if the price is $100 and can sell 8 units if the price is $125. Using the midpoint method, what is the price elasticity of demand?

Suppose a 20 percent increase in the price of gasoline results in a 25 percent increase in the quantity supplied. This response means that gasoline has

If the price of a a good increases by 10 percent and the quantity supplied increases by 5 percent, then the elasticity of supply is

If the price elasticity of supply for a good is 10, then supply is

Water is considered a necessity. So, is the demand for water elastic or inelastic?

The income elasticity of demand for foreign travel

Suppose the San Francisco 49ers lower ticket prices by 15 percent and as a result the quantity of tickets demanded increases by 10 percent. This set of results shows that San Francisco 49ers tickets have

-The figure above shows the demand curve for pizza. Using the midpoint method and moving from point A to point B, calculate the a. percentage change in price. b. percentage change in quantity demanded. c. price elasticity of demand.

-In the figure above, what happens to total revenue as we move from point A to point B?

The price elasticity of demand measures which of the following?

When income increases from $30,000 a year to $40,000 a year, the quantity demanded of weekend vacations by Sara increases from 2 a year to 5 a year. For Sara, the income elasticity of demand of weekend vacations is ________ and weekend vacations are ________ good.

The price elasticity of demand for an agricultural product is 0.4. This value means that, when the quantity decreases 1 percent, the price

The income elasticity of demand is a measure of

The price elasticity of demand is a measure of

The fact that there is a very limited amount of land in Hong Kong means the supply of new apartments in Hong Kong is

If the percentage change in the price of a good exceeds the percentage change in the quantity supplied, then the supply is

During the winter of 2011-2012, the price of fuel oil increased enormously but the quantity demanded decreased only a little. This response indicates that the demand for fuel oil was

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

When income increases from $30,000 a year to $40,000 a year, the quantity demanded of weekend vacations by Sara increases from 2 a year to 5 a year. For Sara, the income elasticity of demand of weekend vacations is and weekend vacations are good.