Question 1

Which of the following is NOT likely to be an example of a product with an inelastic demand?

Accepted Answer

A)  water 
B)  cars 
C)  cigarettes 
D)  eggs 
A)  water 
B)  cars 
C)  cigarettes 
D)  eggs

Question 2

Demand is elastic along the upper half of a liner demand curve,so an increase in quantity from a decrease in price decreases total revenue.

Accepted Answer

A) True 
 B)False

Question 3

-Refer to Figure 5.5.Using the midpoint method,if the price of a gardenburger is increased from $6 to $8,the price elasticity of demand equals

Accepted Answer

A)  0.024. 
B)  1.75. 
C)  1.9. 
D)  2.0. 
A)  0.024. 
B)  1.75. 
C)  1.9. 
D)  2.0.

Question 4

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is increased from $2 to $4,the price elasticity of demand equals

Accepted Answer

A)  0.2. 
B)  1.0. 
C)  2.0. 
D)  5.0. 
A)  0.2. 
B)  1.0. 
C)  2.0. 
D)  5.0.

Question 5

Recall the Application about how changes in supply affect the price of gasoline to answer the following question(s).
-Recall the Application.Suppose the price elasticity of demand for gasoline is 0.20 and the price elasticity of supply for gasoline is 0.55.If supply increases by 40 percent,the equilibrium price will decrease by

Accepted Answer

A)  54 percent. 
B)  72 percent. 
C)  114 percent. 
D)  188 percent. 
A)  54 percent. 
B)  72 percent. 
C)  114 percent. 
D)  188 percent.

Question 6

The cross-price elasticity of demand between natural gas and electricity is 1.1.Therefore,electricity and natural gas must be substitutes.

Accepted Answer

A) True 
 B)False

Question 7

First Choice Cracker company needs to increase the price of crackers by 5%,based on a substantial increase in input costs such as flour.The price elasticity of demand for crackers is 0.4.The company can expect the consumption of cereal to

Accepted Answer

A)  decrease by 1.5%. 
B)  increase by 1.5%. 
C)  decrease by 2.0%. 
D)  increase by 2.0%. 
A)  decrease by 1.5%. 
B)  increase by 1.5%. 
C)  decrease by 2.0%. 
D)  increase by 2.0%.

Question 8

A perfectly elastic demand curve is shown as a

Accepted Answer

A)  horizontal line. 
B)  vertical line. 
C)  positively sloped line. 
D)  negatively sloped line. 
A)  horizontal line. 
B)  vertical line. 
C)  positively sloped line. 
D)  negatively sloped line.

Question 9

The concept of elasticity applies to

Accepted Answer

A)  supply only. 
B)  demand only. 
C)  neither supply nor demand. 
D)  both supply and demand. 
A)  supply only. 
B)  demand only. 
C)  neither supply nor demand. 
D)  both supply and demand.

Question 10

Recall the Application about choosing a price for drones based on a linear demand curve to answer the following question(s).
-Recall the Application.Suppose a firm that produces drones has a linear demand curve for its product,with a vertical intercept of $1,200.If the firm wants the demand for its product to be price-inelastic,the maximum price it should charge is

Accepted Answer

A)  $300. 
B)  $600. 
C)  $1,200. 
D)  $2,400. 
A)  $300. 
B)  $600. 
C)  $1,200. 
D)  $2,400.

Question 11

Suppose the price of laptop computers decreases from $550 to $500 and the quantity supplied decreases from 15,000 to 12,000 per week.Using the initial-price method,the price elasticity of supply is

Accepted Answer

A)  0.2. 
B)  1.2. 
C)  2.0. 
D)  2.2. 
A)  0.2. 
B)  1.2. 
C)  2.0. 
D)  2.2.

Question 12

Two goods are complements if the

Accepted Answer

A)  price elasticity of each is greater than one. 
B)  income elasticity of each is negative. 
C)  cross-price elasticity is negative. 
D)  cross-price elasticity is positive. 
A)  price elasticity of each is greater than one. 
B)  income elasticity of each is negative. 
C)  cross-price elasticity is negative. 
D)  cross-price elasticity is positive.

Question 13

If the demand for orange juice is elastic,then as the price falls,quantity demanded for orange juice will ________ and total revenue for orange suppliers will ________.

Accepted Answer

A)  increase; increase 
B)  decrease; increase 
C)  decrease; decrease 
D)  increase; decrease 
A)  increase; increase 
B)  decrease; increase 
C)  decrease; decrease 
D)  increase; decrease

Question 14

An art museum raises its admission price and ends up with a decrease in its total revenue.How could you explain this situation to the museum director?

Accepted Answer

If price goes up,quantity demanded will

Question 15

When the price of a car is $25,000,car sales are 10,000 per month.When the price of a car increases to $29,000,car sales fall to 8,000 per month.Therefore,using initial value,a 1% increase in the price of the car will result in a ________ in the quantity demanded of cars.

Accepted Answer

A)  1.67% decrease 
B)  1.25% decrease 
C)  0.8% decrease 
D)  0.8% increase 
A)  1.67% decrease 
B)  1.25% decrease 
C)  0.8% decrease 
D)  0.8% increase

Question 16

The price elasticity of demand for shirts is 0.75 and the price elasticity of supply for shirts is 2.5.If the supply of shirts rises by 10%,what will happen to the price of shirts?

Accepted Answer

percentage change in price = [

Question 17

If crude-oil prices increase as the total amount of gasoline increases,the supply curve for gasoline will be relatively steep and the price of elasticity of supply for gasoline will be

Accepted Answer

A)  relatively large. 
B)  perfectly vertical. 
C)  perfectly horizontal. 
D)  relatively low. 
A)  relatively large. 
B)  perfectly vertical. 
C)  perfectly horizontal. 
D)  relatively low.

Question 18

What does elasticity measure?

Accepted Answer

Elasticity measures

Question 19

Suppose that a 5% increase in the price of gasoline leads to a 15% decrease in the quantity of SUVs demanded.The cross-price elasticity of demand for SUVs is

Accepted Answer

A)  0.33. 
B)  3.0. 
C)  3.3. 
D)  33.0. 
A)  0.33. 
B)  3.0. 
C)  3.3. 
D)  33.0.

Question 20

The price elasticity of supply is measured by dividing the percentage change in price by the percentage change in quantity supplied.

Accepted Answer

A) True 
 B)False

Which of the following is NOT likely to be an example of a product with an inelastic demand?

Demand is elastic along the upper half of a liner demand curve,so an increase in quantity from a decrease in price decreases total revenue.

-Refer to Figure 5.5.Using the midpoint method,if the price of a gardenburger is increased from $6 to $8,the price elasticity of demand equals

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is increased from $2 to $4,the price elasticity of demand equals

The cross-price elasticity of demand between natural gas and electricity is 1.1.Therefore,electricity and natural gas must be substitutes.

First Choice Cracker company needs to increase the price of crackers by 5%,based on a substantial increase in input costs such as flour.The price elasticity of demand for crackers is 0.4.The company can expect the consumption of cereal to

A perfectly elastic demand curve is shown as a

The concept of elasticity applies to

Suppose the price of laptop computers decreases from $550 to $500 and the quantity supplied decreases from 15,000 to 12,000 per week.Using the initial-price method,the price elasticity of supply is

Two goods are complements if the

If the demand for orange juice is elastic,then as the price falls,quantity demanded for orange juice will and total revenue for orange suppliers will .

An art museum raises its admission price and ends up with a decrease in its total revenue.How could you explain this situation to the museum director?

When the price of a car is $25,000,car sales are 10,000 per month.When the price of a car increases to $29,000,car sales fall to 8,000 per month.Therefore,using initial value,a 1% increase in the price of the car will result in a ________ in the quantity demanded of cars.

The price elasticity of demand for shirts is 0.75 and the price elasticity of supply for shirts is 2.5.If the supply of shirts rises by 10%,what will happen to the price of shirts?

If crude-oil prices increase as the total amount of gasoline increases,the supply curve for gasoline will be relatively steep and the price of elasticity of supply for gasoline will be

What does elasticity measure?

Suppose that a 5% increase in the price of gasoline leads to a 15% decrease in the quantity of SUVs demanded.The cross-price elasticity of demand for SUVs is

The price elasticity of supply is measured by dividing the percentage change in price by the percentage change in quantity supplied.

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 5: Elasticity: a Measure of Responsiveness

Which of the following is NOT likely to be an example of a product with an inelastic demand?

Demand is elastic along the upper half of a liner demand curve,so an increase in quantity from a decrease in price decreases total revenue.

-Refer to Figure 5.5.Using the midpoint method,if the price of a gardenburger is increased from $6 to $8,the price elasticity of demand equals

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is increased from $2 to $4,the price elasticity of demand equals

The cross-price elasticity of demand between natural gas and electricity is 1.1.Therefore,electricity and natural gas must be substitutes.

First Choice Cracker company needs to increase the price of crackers by 5%,based on a substantial increase in input costs such as flour.The price elasticity of demand for crackers is 0.4.The company can expect the consumption of cereal to

A perfectly elastic demand curve is shown as a

The concept of elasticity applies to

Suppose the price of laptop computers decreases from $550 to $500 and the quantity supplied decreases from 15,000 to 12,000 per week.Using the initial-price method,the price elasticity of supply is

Two goods are complements if the

If the demand for orange juice is elastic,then as the price falls,quantity demanded for orange juice will ________ and total revenue for orange suppliers will ________.

An art museum raises its admission price and ends up with a decrease in its total revenue.How could you explain this situation to the museum director?

When the price of a car is $25,000,car sales are 10,000 per month.When the price of a car increases to $29,000,car sales fall to 8,000 per month.Therefore,using initial value,a 1% increase in the price of the car will result in a ________ in the quantity demanded of cars.

The price elasticity of demand for shirts is 0.75 and the price elasticity of supply for shirts is 2.5.If the supply of shirts rises by 10%,what will happen to the price of shirts?

If crude-oil prices increase as the total amount of gasoline increases,the supply curve for gasoline will be relatively steep and the price of elasticity of supply for gasoline will be

What does elasticity measure?

Suppose that a 5% increase in the price of gasoline leads to a 15% decrease in the quantity of SUVs demanded.The cross-price elasticity of demand for SUVs is

The price elasticity of supply is measured by dividing the percentage change in price by the percentage change in quantity supplied.

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

If the demand for orange juice is elastic,then as the price falls,quantity demanded for orange juice will and total revenue for orange suppliers will .