Question 1

If the price elasticity of supply is equal to infinity and the price was to fall, the quantity supplied would

Accepted Answer

A)  decrease slightly. 
B)  fall to zero. 
C)  not change. 
D)  increase. 
A)  decrease slightly. 
B)  fall to zero. 
C)  not change. 
D)  increase.

Question 2

If the price elasticity of demand is very elastic, which of the following could be a possible value of the elasticity?

Accepted Answer

A)  2 
B)  1 
C)  1/3 
D)  0 
A)  2 
B)  1 
C)  1/3 
D)  0

Question 3

Suppose that the elasticity of demand for a product is 4.0 and quantity demanded increases by 20%. What must the percentage decrease in price have been?

Accepted Answer

A)  5% 
B)  20% 
C)  80% 
D)  200% 
A)  5% 
B)  20% 
C)  80% 
D)  200%

Question 4

If the percentage change in price is 20 and the percentage change in quantity supplied is 10, supply is

Accepted Answer

A)  unaffected by price changes. 
B)  inelastic. 
C)  unit elastic. 
D)  elastic. 
A)  unaffected by price changes. 
B)  inelastic. 
C)  unit elastic. 
D)  elastic.

Question 5

A bumper crop would be bad news for farmers if their crop has an inelastic demand because their total revenue would

Accepted Answer

A)  rise along with price. 
B)  rise as price falls. 
C)  fall as price rises. 
D)  fall along with price. 
A)  rise along with price. 
B)  rise as price falls. 
C)  fall as price rises. 
D)  fall along with price.

Question 6

If the price elasticity of demand is 1.3, demand is

Accepted Answer

A)  upward sloping. 
B)  inelastic. 
C)  unit elastic. 
D)  elastic. 
A)  upward sloping. 
B)  inelastic. 
C)  unit elastic. 
D)  elastic.

Question 7

If peanut butter and jelly are complements, then an increase in the price of peanut butter will reduce the demand for jelly.

Accepted Answer

A) True 
 B)False

Question 8

If the price elasticity of demand is equal to zero and the price was to rise, the quantity demanded would

Accepted Answer

A)  decrease slightly. 
B)  fall to zero. 
C)  not change. 
D)  increase. 
A)  decrease slightly. 
B)  fall to zero. 
C)  not change. 
D)  increase.

Question 9

Figure 4.4
-In Figure 4.4 supply elasticity is zero in graph

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 10

Is demand for electricity more price elastic when measured over a short period of time or a long period of time? Explain.

Accepted Answer

It is more price elastic over a long per

Question 11

An increase in demand will cause a relatively small increase in price when

Accepted Answer

A)  the increase in demand is large. 
B)  demand is highly elastic. 
C)  supply is highly inelastic. 
D)  all of the above 
A)  the increase in demand is large. 
B)  demand is highly elastic. 
C)  supply is highly inelastic. 
D)  all of the above

Question 12

The price elasticity of demand for a good is relatively elastic if

Accepted Answer

A)  there are a large number of substitutes. 
B)  the consumer has more time to make decisions about purchasing the good. 
C)  the good is less of a necessity. 
D)  all of the above 
A)  there are a large number of substitutes. 
B)  the consumer has more time to make decisions about purchasing the good. 
C)  the good is less of a necessity. 
D)  all of the above

Question 13

Suppose that in a month the price of tulips increases from $1 to $1.50. At the same time, the quantity of tulips demanded decreases from 200 to 190. The price elasticity of demand for tulips (calculated using the initial value formula) is

Accepted Answer

A)  0.1. 
B)  0.5. 
C)  10. 
D)  20. 
A)  0.1. 
B)  0.5. 
C)  10. 
D)  20.

Question 14

If the demand curve facing a firm had a price elasticity of demand equal to infinity and the firm raised its price, its total revenue would

Accepted Answer

A)  decrease slightly. 
B)  fall to zero. 
C)  not change. 
D)  increase. 
A)  decrease slightly. 
B)  fall to zero. 
C)  not change. 
D)  increase.

Question 15

Suppose we observe that as a firm increases its price its total revenue decreases. Which of the following is a possible value of its price elasticity of demand?

Accepted Answer

A)  0.25 
B)  0.5 
C)  1 
D)  2 
A)  0.25 
B)  0.5 
C)  1 
D)  2

Question 16

If the supply curve is a vertical line, it means that

Accepted Answer

A)  regardless of price, the quantity supplied is a constant amount. 
B)  regardless of quantity, the price is a constant amount. 
C)  the good is inferior. 
D)  the good has many substitutes. 
A)  regardless of price, the quantity supplied is a constant amount. 
B)  regardless of quantity, the price is a constant amount. 
C)  the good is inferior. 
D)  the good has many substitutes.

Question 17

The price elasticity of demand for business travel tends to be greater than that of leisure travel.

Accepted Answer

A) True 
 B)False

Question 18

What will make a change in demand cause a large change in price?

Accepted Answer

a large change in de

Question 19

If the percentage change in price is 2 and the percentage change in quantity supplied is 10, supply is

Accepted Answer

A)  unaffected by price changes. 
B)  inelastic. 
C)  unit elastic. 
D)  elastic. 
A)  unaffected by price changes. 
B)  inelastic. 
C)  unit elastic. 
D)  elastic.

Question 20

Suppose that there is only one seller in the computer industry. If the demand curve that the only seller in the industry faces is a straight-line, downward sloping curve, at which point would the seller's total revenue be maximized?

Accepted Answer

A)  at the highest point on the demand curve, where price is the highest 
B)  at a point high on the demand curve, where elasticity is elastic 
C)  at the midpoint of the demand curve, where elasticity is unitary 
D)  at a point low on the demand curve, but not at the very bottom 
A)  at the highest point on the demand curve, where price is the highest 
B)  at a point high on the demand curve, where elasticity is elastic 
C)  at the midpoint of the demand curve, where elasticity is unitary 
D)  at a point low on the demand curve, but not at the very bottom

If the price elasticity of supply is equal to infinity and the price was to fall, the quantity supplied would

If the price elasticity of demand is very elastic, which of the following could be a possible value of the elasticity?

Suppose that the elasticity of demand for a product is 4.0 and quantity demanded increases by 20%. What must the percentage decrease in price have been?

If the percentage change in price is 20 and the percentage change in quantity supplied is 10, supply is

A bumper crop would be bad news for farmers if their crop has an inelastic demand because their total revenue would

If the price elasticity of demand is 1.3, demand is

If peanut butter and jelly are complements, then an increase in the price of peanut butter will reduce the demand for jelly.

If the price elasticity of demand is equal to zero and the price was to rise, the quantity demanded would

Figure 4.4 -In Figure 4.4 supply elasticity is zero in graph

Is demand for electricity more price elastic when measured over a short period of time or a long period of time? Explain.

An increase in demand will cause a relatively small increase in price when

The price elasticity of demand for a good is relatively elastic if

Suppose that in a month the price of tulips increases from $1 to $1.50. At the same time, the quantity of tulips demanded decreases from 200 to 190. The price elasticity of demand for tulips (calculated using the initial value formula) is

If the demand curve facing a firm had a price elasticity of demand equal to infinity and the firm raised its price, its total revenue would

Suppose we observe that as a firm increases its price its total revenue decreases. Which of the following is a possible value of its price elasticity of demand?

If the supply curve is a vertical line, it means that

The price elasticity of demand for business travel tends to be greater than that of leisure travel.

What will make a change in demand cause a large change in price?

If the percentage change in price is 2 and the percentage change in quantity supplied is 10, supply is

Suppose that there is only one seller in the computer industry. If the demand curve that the only seller in the industry faces is a straight-line, downward sloping curve, at which point would the seller's total revenue be maximized?

Introduction: What Is Economics

The Key Principles of Economics

Demand, Supply, and Market Equilibrium

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry, Monopolistic Competition, and Oligopoly

Imperfect Information, External Benefits, and External Costs

The Labor Market and the Distribution of Income

Measuring a Nations Production and Income

Unemployment and Inflation

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and the Banking System

Monetary Policy and Inflation

International Trade and Finance

Filters

Exam 4: Elasticity: A Measure of Responsiveness

If the price elasticity of supply is equal to infinity and the price was to fall, the quantity supplied would

If the price elasticity of demand is very elastic, which of the following could be a possible value of the elasticity?

Suppose that the elasticity of demand for a product is 4.0 and quantity demanded increases by 20%. What must the percentage decrease in price have been?

If the percentage change in price is 20 and the percentage change in quantity supplied is 10, supply is

A bumper crop would be bad news for farmers if their crop has an inelastic demand because their total revenue would

If the price elasticity of demand is 1.3, demand is

If peanut butter and jelly are complements, then an increase in the price of peanut butter will reduce the demand for jelly.

If the price elasticity of demand is equal to zero and the price was to rise, the quantity demanded would

Figure 4.4 -In Figure 4.4 supply elasticity is zero in graph

Is demand for electricity more price elastic when measured over a short period of time or a long period of time? Explain.

An increase in demand will cause a relatively small increase in price when

The price elasticity of demand for a good is relatively elastic if

Suppose that in a month the price of tulips increases from $1 to $1.50. At the same time, the quantity of tulips demanded decreases from 200 to 190. The price elasticity of demand for tulips (calculated using the initial value formula) is

If the demand curve facing a firm had a price elasticity of demand equal to infinity and the firm raised its price, its total revenue would

Suppose we observe that as a firm increases its price its total revenue decreases. Which of the following is a possible value of its price elasticity of demand?

If the supply curve is a vertical line, it means that

The price elasticity of demand for business travel tends to be greater than that of leisure travel.

What will make a change in demand cause a large change in price?

If the percentage change in price is 2 and the percentage change in quantity supplied is 10, supply is

Suppose that there is only one seller in the computer industry. If the demand curve that the only seller in the industry faces is a straight-line, downward sloping curve, at which point would the seller's total revenue be maximized?

Introduction: What Is Economics

The Key Principles of Economics

Demand, Supply, and Market Equilibrium

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry, Monopolistic Competition, and Oligopoly

Imperfect Information, External Benefits, and External Costs

The Labor Market and the Distribution of Income

Measuring a Nations Production and Income

Unemployment and Inflation

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and the Banking System

Monetary Policy and Inflation

International Trade and Finance

Filters