Question 1

An increase in supply caused no change in the equilibrium price of a good.Thus,demand must be

Accepted Answer

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

Question 2

If the price elasticity of supply for CDs is 0.8,then the supply is inelastic.

Accepted Answer

A) True 
 B)False

Question 3

The price elasticity of demand for gasoline is 0.8.What must occur to the price of gasoline in order for quantity demanded to rise by 20 percent?

Accepted Answer

[20]/[percentage cha

Question 4

If the supply curve is relatively steep,then the price elasticity of supply will be

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  unit elastic. 
D)  greater than one. 
A)  elastic. 
B)  inelastic. 
C)  unit elastic. 
D)  greater than one.

Question 5

When moving upward the along a liner demand curve,the price elasticity of the demand

Accepted Answer

A)  decreases. 
B)  increases. 
C)  stays the same. 
D)  none of the above 
A)  decreases. 
B)  increases. 
C)  stays the same. 
D)  none of the above

Question 6

Chris buys more new jewelry when her income rises.This means that for Chris,

Accepted Answer

A)  new jewelry is an inferior good. 
B)  the income elasticity of demand for new jewelry is positive. 
C)  the income elasticity of demand for new jewelry is negative. 
D)  none of the above 
A)  new jewelry is an inferior good. 
B)  the income elasticity of demand for new jewelry is positive. 
C)  the income elasticity of demand for new jewelry is negative. 
D)  none of the above

Question 7

The demand for tobacco is price inelastic.Suppose there is a drought that destroys a large portion of the tobacco crop.What will happen in the market for tobacco? Will the equilibrium price and quantity change? If so,how? What will happen to the total revenue earned by tobacco farmers?

Accepted Answer

The drought will reduce the supply of to

Question 8

-Refer to Figure 5.5.Using the midpoint method,if the price of a gardenburger is increased from $8 to $10,the price elasticity of demand equals

Accepted Answer

A)  0.036. 
B)  0.5. 
C)  4.5. 
D)  9.0. 
A)  0.036. 
B)  0.5. 
C)  4.5. 
D)  9.0.

Question 9

If the price elasticity of demand is less than 1,then a 6% increase in the price will result in an increase in total revenue.

Accepted Answer

A) True 
 B)False

Question 10

The price elasticity of supply is generally greater than zero.

Accepted Answer

A) True 
 B)False

Question 11

The demand for a product is

Accepted Answer

A)  more elastic if there are few substitutes for product. 
B)  more elastic if there are many substitutes for product. 
C)  more elastic if the product represents a small portion of the individual's budget. 
D)  B and C are correct. 
A)  more elastic if there are few substitutes for product. 
B)  more elastic if there are many substitutes for product. 
C)  more elastic if the product represents a small portion of the individual's budget. 
D)  B and C are correct.

Question 12

If the price elasticity of supply is 0.25,then a 10% increase in price will result in a 2.5% increase in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 13

In the short run,the price elasticity of supply is limited because of the principle of diminishing returns.

Accepted Answer

A) True 
 B)False

Question 14

If the demand for water is inelastic,then as the price of water falls,quantity demanded of water will ________ and total revenue 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 15

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is increased from $6 to $8,the price elasticity of demand equals

Accepted Answer

A)  0.7. 
B)  1.0. 
C)  2.0. 
D)  5.0. 
A)  0.7. 
B)  1.0. 
C)  2.0. 
D)  5.0.

Question 16

Increasing cigarette prices has an impact on teenagers' cigarette consumption.Therefore,decreasing cigarette prices would

Accepted Answer

A)  increase teenagers' consumption. 
B)  allow for more law enforcement. 
C)  reduce teenagers' consumption. 
D)  increase the revenue from cigarette sales. 
A)  increase teenagers' consumption. 
B)  allow for more law enforcement. 
C)  reduce teenagers' consumption. 
D)  increase the revenue from cigarette sales.

Question 17

When the price of bread rises from $1.25 to $1.50 per loaf,quantity demanded falls from 5,800 per week to 5,500.Calculate total revenue both before and after the price change.What can we tell about the price elasticity of demand for bread?

Accepted Answer

Total revenue (before price change)= $1.

Question 18

Which of the following is a true statement?

Accepted Answer

A)  If demand is inelastic and the price increases, the total revenue will decrease. 
B)  If demand is inelastic and the price increases, the total revenue will increase. 
C)  If demand is elastic and the price increases, the total revenue will increase. 
D)  If demand is elastic and the price decreases, the quantity demanded will decrease. 
A)  If demand is inelastic and the price increases, the total revenue will decrease. 
B)  If demand is inelastic and the price increases, the total revenue will increase. 
C)  If demand is elastic and the price increases, the total revenue will increase. 
D)  If demand is elastic and the price decreases, the quantity demanded will decrease.

Question 19

The income elasticity of demand for popcorn is -1.1.Therefore,if income increases,the demand for popcorn will increase.

Accepted Answer

A) True 
 B)False

Question 20

Clear Window Manufacturer wants to increase the quantity of windows it sells by 10%.If the price elasticity of demand is 5,the manufacturer must

Accepted Answer

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

An increase in supply caused no change in the equilibrium price of a good.Thus,demand must be

If the price elasticity of supply for CDs is 0.8,then the supply is inelastic.

The price elasticity of demand for gasoline is 0.8.What must occur to the price of gasoline in order for quantity demanded to rise by 20 percent?

If the supply curve is relatively steep,then the price elasticity of supply will be

When moving upward the along a liner demand curve,the price elasticity of the demand

Chris buys more new jewelry when her income rises.This means that for Chris,

The demand for tobacco is price inelastic.Suppose there is a drought that destroys a large portion of the tobacco crop.What will happen in the market for tobacco? Will the equilibrium price and quantity change? If so,how? What will happen to the total revenue earned by tobacco farmers?

-Refer to Figure 5.5.Using the midpoint method,if the price of a gardenburger is increased from $8 to $10,the price elasticity of demand equals

If the price elasticity of demand is less than 1,then a 6% increase in the price will result in an increase in total revenue.

The price elasticity of supply is generally greater than zero.

The demand for a product is

If the price elasticity of supply is 0.25,then a 10% increase in price will result in a 2.5% increase in quantity supplied.

In the short run,the price elasticity of supply is limited because of the principle of diminishing returns.

If the demand for water is inelastic,then as the price of water falls,quantity demanded of water will and total revenue will .

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is increased from $6 to $8,the price elasticity of demand equals

Increasing cigarette prices has an impact on teenagers' cigarette consumption.Therefore,decreasing cigarette prices would

When the price of bread rises from $1.25 to $1.50 per loaf,quantity demanded falls from 5,800 per week to 5,500.Calculate total revenue both before and after the price change.What can we tell about the price elasticity of demand for bread?

Which of the following is a true statement?

The income elasticity of demand for popcorn is -1.1.Therefore,if income increases,the demand for popcorn will increase.

Clear Window Manufacturer wants to increase the quantity of windows it sells by 10%.If the price elasticity of demand is 5,the manufacturer must

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

An increase in supply caused no change in the equilibrium price of a good.Thus,demand must be

If the price elasticity of supply for CDs is 0.8,then the supply is inelastic.

The price elasticity of demand for gasoline is 0.8.What must occur to the price of gasoline in order for quantity demanded to rise by 20 percent?

If the supply curve is relatively steep,then the price elasticity of supply will be

When moving upward the along a liner demand curve,the price elasticity of the demand

Chris buys more new jewelry when her income rises.This means that for Chris,

The demand for tobacco is price inelastic.Suppose there is a drought that destroys a large portion of the tobacco crop.What will happen in the market for tobacco? Will the equilibrium price and quantity change? If so,how? What will happen to the total revenue earned by tobacco farmers?

-Refer to Figure 5.5.Using the midpoint method,if the price of a gardenburger is increased from $8 to $10,the price elasticity of demand equals

If the price elasticity of demand is less than 1,then a 6% increase in the price will result in an increase in total revenue.

The price elasticity of supply is generally greater than zero.

The demand for a product is

If the price elasticity of supply is 0.25,then a 10% increase in price will result in a 2.5% increase in quantity supplied.

In the short run,the price elasticity of supply is limited because of the principle of diminishing returns.

If the demand for water is inelastic,then as the price of water falls,quantity demanded of water will ________ and total revenue will ________.

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is increased from $6 to $8,the price elasticity of demand equals

Increasing cigarette prices has an impact on teenagers' cigarette consumption.Therefore,decreasing cigarette prices would

When the price of bread rises from $1.25 to $1.50 per loaf,quantity demanded falls from 5,800 per week to 5,500.Calculate total revenue both before and after the price change.What can we tell about the price elasticity of demand for bread?

Which of the following is a true statement?

The income elasticity of demand for popcorn is -1.1.Therefore,if income increases,the demand for popcorn will increase.

Clear Window Manufacturer wants to increase the quantity of windows it sells by 10%.If the price elasticity of demand is 5,the manufacturer must

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 water is inelastic,then as the price of water falls,quantity demanded of water will and total revenue will .