Question 1

An increase in demand shifts the demand curve to the right,increasing the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 2

Billy's income elasticity of demand for ground beef is -0.5 and his income elasticity of demand for pork chops is 1.2.For Billy,is ground beef a normal or inferior good? Explain.What about pork chops?

Accepted Answer

Because his income elasticity of demand

Question 3

How does one determine whether demand is elastic,inelastic,or unit elastic?

Accepted Answer

If the price elasticity of dem

Question 4

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

Accepted Answer

A)  relatively large. 
B)  relatively low. 
C)  negative. 
D)  decreasing at an increasing rate. 
A)  relatively large. 
B)  relatively low. 
C)  negative. 
D)  decreasing at an increasing rate.

Question 5

Suppose the demand for energy drinks decreases by 20% due to recent repercussions found in the consumption.If the price elasticity of supply is 1.2 and the price elasticity of demand is 0.80,the percentage change in the equilibrium price for energy drinks will

Accepted Answer

A)  rise by 0.1%. 
B)  fall by 0.1%. 
C)  rise by 10%. 
D)  fall by 10%. 
A)  rise by 0.1%. 
B)  fall by 0.1%. 
C)  rise by 10%. 
D)  fall by 10%.

Question 6

If the price elasticity of demand is 3,this means that a 1% increase in quantity demanded will cause a 3% decrease in the price of the good.

Accepted Answer

A) True 
 B)False

Question 7

What does the income elasticity of demand measure? How is it calculated?

Accepted Answer

The income elasticity of demand measures

Question 8

When Luna Hair Salon raised its hair cut prices by 10% because of an increase in rent cost,it lost a quarter of its customers.The price elasticity of demand for its hair cut is

Accepted Answer

A)  0.25. 
B)  0.4. 
C)  2.5. 
D)  4.0. 
A)  0.25. 
B)  0.4. 
C)  2.5. 
D)  4.0.

Question 9

An increase in supply caused no change in the equilibrium quantity bought and sold.Thus,demand must be

Accepted Answer

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

Question 10

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is decreased from $10 to $8,the price elasticity of demand equals

Accepted Answer

A)  1.0. 
B)  1.5. 
C)  2.0. 
D)  5.0. 
A)  1.0. 
B)  1.5. 
C)  2.0. 
D)  5.0.

Question 11

Suppose the price elasticity of supply for poker chips is 0.7 and the price decreases by 30%.The quantity supplied will decrease by ________ %.

Accepted Answer

A)  15 
B)  21 
C)  25 
D)  30 
A)  15 
B)  21 
C)  25 
D)  30

Question 12

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 initially charged a price of $450 and then raised its price to $600,the firm's total revenue would ________ and total cost would ________.

Accepted Answer

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

Question 13

Price elasticity of demand is

Accepted Answer

A)  the same as the slope of the demand curve. 
B)  the change in price for a given change in quantity demanded. 
C)  measured in dollars. 
D)  a measure of the percentage change in quantity demanded for a given percentage change in price. 
A)  the same as the slope of the demand curve. 
B)  the change in price for a given change in quantity demanded. 
C)  measured in dollars. 
D)  a measure of the percentage change in quantity demanded for a given percentage change in price.

Question 14

If demand for a good is elastic and price rises,total revenue will fall.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The short run price elasticity of demand for gasoline is 0.5,and the long run price elasticity of demand for gasoline is 1.1.Demand for gasoline is ________ in the short run and ________ in the long run.

Accepted Answer

A)  elastic; inelastic 
B)  inelastic; elastic 
C)  elastic; unit elastic 
D)  inelastic; unit inelastic 
A)  elastic; inelastic 
B)  inelastic; elastic 
C)  elastic; unit elastic 
D)  inelastic; unit inelastic

Question 17

The price elasticity of supply measures the responsiveness of the quantity supplied to changes in demand.

Accepted Answer

A) True 
 B)False

Question 18

When Robert's income increases,he buys more new clothes.If the income elasticity is positive,indicating a positive relationship between his income and his demand,then new clothes are a normal good for Robert.

Accepted Answer

A) True 
 B)False

Question 19

If the quantity of soda demanded increases by 4% when the price of coffee increases by 16%,the cross-price elasticity of demand between soda and coffee is

Accepted Answer

A)  -12.0. 
B)  -0.25. 
C)  0.25. 
D)  12.0. 
A)  -12.0. 
B)  -0.25. 
C)  0.25. 
D)  12.0.

Question 20

When measured along a linear downward-sloping demand curve,the price elasticity

Accepted Answer

A)  remains constant and is greater than one. 
B)  remains constant and is less than one. 
C)  increases in absolute value from left to right. 
D)  decreases in absolute value from left to right. 
A)  remains constant and is greater than one. 
B)  remains constant and is less than one. 
C)  increases in absolute value from left to right. 
D)  decreases in absolute value from left to right.

An increase in demand shifts the demand curve to the right,increasing the equilibrium price.

Billy's income elasticity of demand for ground beef is -0.5 and his income elasticity of demand for pork chops is 1.2.For Billy,is ground beef a normal or inferior good? Explain.What about pork chops?

How does one determine whether demand is elastic,inelastic,or unit elastic?

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

Suppose the demand for energy drinks decreases by 20% due to recent repercussions found in the consumption.If the price elasticity of supply is 1.2 and the price elasticity of demand is 0.80,the percentage change in the equilibrium price for energy drinks will

If the price elasticity of demand is 3,this means that a 1% increase in quantity demanded will cause a 3% decrease in the price of the good.

What does the income elasticity of demand measure? How is it calculated?

When Luna Hair Salon raised its hair cut prices by 10% because of an increase in rent cost,it lost a quarter of its customers.The price elasticity of demand for its hair cut is

An increase in supply caused no change in the equilibrium quantity bought and sold.Thus,demand must be

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is decreased from $10 to $8,the price elasticity of demand equals

Suppose the price elasticity of supply for poker chips is 0.7 and the price decreases by 30%.The quantity supplied will decrease by ________ %.

Price elasticity of demand is

If demand for a good is elastic and price rises,total revenue will fall.

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

The short run price elasticity of demand for gasoline is 0.5,and the long run price elasticity of demand for gasoline is 1.1.Demand for gasoline is in the short run and in the long run.

The price elasticity of supply measures the responsiveness of the quantity supplied to changes in demand.

When Robert's income increases,he buys more new clothes.If the income elasticity is positive,indicating a positive relationship between his income and his demand,then new clothes are a normal good for Robert.

If the quantity of soda demanded increases by 4% when the price of coffee increases by 16%,the cross-price elasticity of demand between soda and coffee is

When measured along a linear downward-sloping demand curve,the price elasticity

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 demand shifts the demand curve to the right,increasing the equilibrium price.

Billy's income elasticity of demand for ground beef is -0.5 and his income elasticity of demand for pork chops is 1.2.For Billy,is ground beef a normal or inferior good? Explain.What about pork chops?

How does one determine whether demand is elastic,inelastic,or unit elastic?

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

Suppose the demand for energy drinks decreases by 20% due to recent repercussions found in the consumption.If the price elasticity of supply is 1.2 and the price elasticity of demand is 0.80,the percentage change in the equilibrium price for energy drinks will

If the price elasticity of demand is 3,this means that a 1% increase in quantity demanded will cause a 3% decrease in the price of the good.

What does the income elasticity of demand measure? How is it calculated?

When Luna Hair Salon raised its hair cut prices by 10% because of an increase in rent cost,it lost a quarter of its customers.The price elasticity of demand for its hair cut is

An increase in supply caused no change in the equilibrium quantity bought and sold.Thus,demand must be

-Refer to Figure 5.1.Using the initial-value method,if the price of a hamburger is decreased from $10 to $8,the price elasticity of demand equals

Suppose the price elasticity of supply for poker chips is 0.7 and the price decreases by 30%.The quantity supplied will decrease by ________ %.

Price elasticity of demand is

If demand for a good is elastic and price rises,total revenue will fall.

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

The short run price elasticity of demand for gasoline is 0.5,and the long run price elasticity of demand for gasoline is 1.1.Demand for gasoline is ________ in the short run and ________ in the long run.

The price elasticity of supply measures the responsiveness of the quantity supplied to changes in demand.

When Robert's income increases,he buys more new clothes.If the income elasticity is positive,indicating a positive relationship between his income and his demand,then new clothes are a normal good for Robert.

If the quantity of soda demanded increases by 4% when the price of coffee increases by 16%,the cross-price elasticity of demand between soda and coffee is

When measured along a linear downward-sloping demand curve,the price elasticity

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

The short run price elasticity of demand for gasoline is 0.5,and the long run price elasticity of demand for gasoline is 1.1.Demand for gasoline is in the short run and in the long run.