Question 1

A perfectly elastic demand curve is a horizontal line.

Accepted Answer

A) True 
 B)False

Question 2

The price elasticity of demand is measured by dividing the percentage change in quantity demanded by the percentage change in price.

Accepted Answer

A) True 
 B)False

Question 3

-Refer to Figure 5.2.Using the initial-value method,the value of the price elasticity of demand from Point A to Point B can be described as

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  unit elastic. 
D)  zero. 
A)  elastic. 
B)  inelastic. 
C)  unit elastic. 
D)  zero.

Question 4

Would you expect the cross-price elasticity of demand between ham and turkey to be positive or negative? Why?

Accepted Answer

The cross-price elasticity of

Question 5

A sandwich shop observes that when it increases the price of a sandwich,total revenue from sandwich sales increases,and when they lower the price of a sandwich,total revenue from sandwich sales decreases.This suggests that

Accepted Answer

A)  the demand for sandwiches is inelastic. 
B)  the demand for sandwiches is elastic. 
C)  there are many good substitutes for sandwiches. 
D)  the law of demand is being violated. 
A)  the demand for sandwiches is inelastic. 
B)  the demand for sandwiches is elastic. 
C)  there are many good substitutes for sandwiches. 
D)  the law of demand is being violated.

Question 6

Suppose that a coffee shop faces a demand curve that is liner and that the current price for its cup of coffee is set at a point where the price elasticity is 1.2.If the local dry cleaner shop increases the price per garment,demand becomes ________ elastic and total revenue ________.

Accepted Answer

A)  more; decreases 
B)  more; increases 
C)  less; increases 
D)  less; decreases 
A)  more; decreases 
B)  more; increases 
C)  less; increases 
D)  less; decreases

Question 7

The price elasticity of demand for gasoline is 0.5 and the price elasticity of supply for gasoline is 1.5.If the demand for gasoline falls by 10%,what will happen to the price of gasoline?

Accepted Answer

percentage change in price = [

Question 8

Suppose the price elasticity of supply for rocking chairs is 1.2 and the price increases by 20%.The quantity supplied will increase by ________ %.

Accepted Answer

A)  24 
B)  20 
C)  18 
D)  12 
A)  24 
B)  20 
C)  18 
D)  12

Question 9

If the demand for a product is perfectly elastic,then which of the following is most likely to be FALSE?

Accepted Answer

A)  The product has many substitutes. 
B)  The demand curve for the good is horizontal. 
C)  The price elasticity of demand for that product is infinity. 
D)  None of the above is false. 
A)  The product has many substitutes. 
B)  The demand curve for the good is horizontal. 
C)  The price elasticity of demand for that product is infinity. 
D)  None of the above is false.

Question 10

Comment on the following statement: "Elasticity is constant along a straight-line demand curve."

Accepted Answer

The statement is false.While the slope i

A perfectly elastic demand curve is a horizontal line.

The price elasticity of demand is measured by dividing the percentage change in quantity demanded by the percentage change in price.

-Refer to Figure 5.2.Using the initial-value method,the value of the price elasticity of demand from Point A to Point B can be described as

Would you expect the cross-price elasticity of demand between ham and turkey to be positive or negative? Why?

A sandwich shop observes that when it increases the price of a sandwich,total revenue from sandwich sales increases,and when they lower the price of a sandwich,total revenue from sandwich sales decreases.This suggests that

Suppose that a coffee shop faces a demand curve that is liner and that the current price for its cup of coffee is set at a point where the price elasticity is 1.2.If the local dry cleaner shop increases the price per garment,demand becomes elastic and total revenue .

The price elasticity of demand for gasoline is 0.5 and the price elasticity of supply for gasoline is 1.5.If the demand for gasoline falls by 10%,what will happen to the price of gasoline?

Suppose the price elasticity of supply for rocking chairs is 1.2 and the price increases by 20%.The quantity supplied will increase by ________ %.

If the demand for a product is perfectly elastic,then which of the following is most likely to be FALSE?

Comment on the following statement: "Elasticity is constant along a straight-line demand curve."

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

A perfectly elastic demand curve is a horizontal line.

The price elasticity of demand is measured by dividing the percentage change in quantity demanded by the percentage change in price.

-Refer to Figure 5.2.Using the initial-value method,the value of the price elasticity of demand from Point A to Point B can be described as

Would you expect the cross-price elasticity of demand between ham and turkey to be positive or negative? Why?

A sandwich shop observes that when it increases the price of a sandwich,total revenue from sandwich sales increases,and when they lower the price of a sandwich,total revenue from sandwich sales decreases.This suggests that

Suppose that a coffee shop faces a demand curve that is liner and that the current price for its cup of coffee is set at a point where the price elasticity is 1.2.If the local dry cleaner shop increases the price per garment,demand becomes ________ elastic and total revenue ________.

The price elasticity of demand for gasoline is 0.5 and the price elasticity of supply for gasoline is 1.5.If the demand for gasoline falls by 10%,what will happen to the price of gasoline?

Suppose the price elasticity of supply for rocking chairs is 1.2 and the price increases by 20%.The quantity supplied will increase by ________ %.

If the demand for a product is perfectly elastic,then which of the following is most likely to be FALSE?

Comment on the following statement: "Elasticity is constant along a straight-line demand curve."

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

Suppose that a coffee shop faces a demand curve that is liner and that the current price for its cup of coffee is set at a point where the price elasticity is 1.2.If the local dry cleaner shop increases the price per garment,demand becomes elastic and total revenue .