Question 1

If a 10 percent increase in price leads to a 20 percent increase in quantity supplied,then the elasticity of supply is 0.5.

Accepted Answer

A) True 
 B)False

Question 2

If demand is perfectly inelastic,then:

Accepted Answer

A) the elasticity of demand is 1. 
B) the elasticity of demand is -1. 
C) the demand curve will be nonexistent. 
D) the demand curve will be a horizontal line. 
E) quantity demanded does not change when price changes. 
A) the elasticity of demand is 1. 
B) the elasticity of demand is -1. 
C) the demand curve will be nonexistent. 
D) the demand curve will be a horizontal line. 
E) quantity demanded does not change when price changes.

Question 3

Demand is price-elastic at the top portion of a straight-line downward-sloping demand curve.

Accepted Answer

A) True 
 B)False

Question 4

Since they are often used together,peanut butter and jelly are:

Accepted Answer

A) substitutes and have a positive cross-price elasticity. 
B) complements and have a positive cross-price elasticity. 
C) substitutes and have a negative cross-price elasticity. 
D) complements and have a negative cross-price elasticity. 
E) inferior goods when the demand or goods is positive. 
A) substitutes and have a positive cross-price elasticity. 
B) complements and have a positive cross-price elasticity. 
C) substitutes and have a negative cross-price elasticity. 
D) complements and have a negative cross-price elasticity. 
E) inferior goods when the demand or goods is positive.

Question 5

Economists have said that deregulation of the electric utility industry might lead to increased prices in the short run but prices will fall in the long run.In this context:

Accepted Answer

A) the short run means the middle of next year. 
B) the short run means after all adjustments have been made and the quantities of all resources have been varied as necessary. 
C) the long run means after all adjustments have been made,the quantities of all resources have been varied as necessary,and new market entrants begin producing electricity. 
D) the short run means after new firms begin producing electricity. 
E) the long run means approximately ten years. 
A) the short run means the middle of next year. 
B) the short run means after all adjustments have been made and the quantities of all resources have been varied as necessary. 
C) the long run means after all adjustments have been made,the quantities of all resources have been varied as necessary,and new market entrants begin producing electricity. 
D) the short run means after new firms begin producing electricity. 
E) the long run means approximately ten years.

Question 6

A measure of the responsiveness of quantity supplied to changes in price is known as _____.

Accepted Answer

A) cross-price elasticity 
B) price elasticity of demand 
C) price elasticity of supply 
D) income elasticity 
E) point elasticity 
A) cross-price elasticity 
B) price elasticity of demand 
C) price elasticity of supply 
D) income elasticity 
E) point elasticity

Question 7

By measuring the price elasticity of demand in terms of percentage changes,economists are able to compare the way consumers respond to changes in the prices of different products.

Accepted Answer

A) True 
 B)False

Question 8

A perfectly elastic demand curve is represented by a vertical line.

Accepted Answer

A) True 
 B)False

Question 9

The cross-price elasticity between movie tickets and video rentals is positive.

Accepted Answer

A) True 
 B)False

Question 10

Supply curves applicable to shorter periods of time tend to:

Accepted Answer

A) be represented by horizontal lines parallel to the quantity axis. 
B) be perfectly elastic. 
C) be more inelastic than supply curves that apply to longer periods of time. 
D) be more elastic than supply curves that apply to longer periods of time. 
E) have a price elasticity of supply that is approximately equal to 1. 
A) be represented by horizontal lines parallel to the quantity axis. 
B) be perfectly elastic. 
C) be more inelastic than supply curves that apply to longer periods of time. 
D) be more elastic than supply curves that apply to longer periods of time. 
E) have a price elasticity of supply that is approximately equal to 1.

Question 11

Which of the following would most likely be highly price-elastic?

Accepted Answer

A) The demand for milk by a household 
B) The demand for insulin by a diabetes patient 
C) The demand for water 
D) The demand for new houses 
E) The demand for coal over a period of one month 
A) The demand for milk by a household 
B) The demand for insulin by a diabetes patient 
C) The demand for water 
D) The demand for new houses 
E) The demand for coal over a period of one month

Question 12

The price elasticity of demand depends on how readily and easily consumers can switch their purchases from one product to another.

Accepted Answer

A) True 
 B)False

If a 10 percent increase in price leads to a 20 percent increase in quantity supplied,then the elasticity of supply is 0.5.

If demand is perfectly inelastic,then:

Demand is price-elastic at the top portion of a straight-line downward-sloping demand curve.

Since they are often used together,peanut butter and jelly are:

Economists have said that deregulation of the electric utility industry might lead to increased prices in the short run but prices will fall in the long run.In this context:

A measure of the responsiveness of quantity supplied to changes in price is known as _____.

By measuring the price elasticity of demand in terms of percentage changes,economists are able to compare the way consumers respond to changes in the prices of different products.

A perfectly elastic demand curve is represented by a vertical line.

The cross-price elasticity between movie tickets and video rentals is positive.

Supply curves applicable to shorter periods of time tend to:

Which of the following would most likely be highly price-elastic?

The price elasticity of demand depends on how readily and easily consumers can switch their purchases from one product to another.

Economics: The World Around You

Choice, opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Consumer Choice

Supply: The Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution,Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

Exam 5: Elasticity: Demand and Supply

If a 10 percent increase in price leads to a 20 percent increase in quantity supplied,then the elasticity of supply is 0.5.

If demand is perfectly inelastic,then:

Demand is price-elastic at the top portion of a straight-line downward-sloping demand curve.

Since they are often used together,peanut butter and jelly are:

Economists have said that deregulation of the electric utility industry might lead to increased prices in the short run but prices will fall in the long run.In this context:

A measure of the responsiveness of quantity supplied to changes in price is known as _____.

By measuring the price elasticity of demand in terms of percentage changes,economists are able to compare the way consumers respond to changes in the prices of different products.

A perfectly elastic demand curve is represented by a vertical line.

The cross-price elasticity between movie tickets and video rentals is positive.

Supply curves applicable to shorter periods of time tend to:

Which of the following would most likely be highly price-elastic?

The price elasticity of demand depends on how readily and easily consumers can switch their purchases from one product to another.

Economics: The World Around You

Choice, opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Consumer Choice

Supply: The Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution,Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters