Question 1

If the price elasticity of demand for a good is 0.4, then a 10 percent increase in price results in a

Accepted Answer

A) 0.4 percent decrease in the quantity demanded. 
B) 2.5 percent decrease in the quantity demanded. 
C) 4 percent decrease in the quantity demanded. 
D) 40 percent decrease in the quantity demanded. 
A) 0.4 percent decrease in the quantity demanded. 
B) 2.5 percent decrease in the quantity demanded. 
C) 4 percent decrease in the quantity demanded. 
D) 40 percent decrease in the quantity demanded.

Question 2

The flatter the demand curve through a given point, the

Accepted Answer

A) greater the price elasticity of demand at that point. 
B) smaller the price elasticity of demand at that point. 
C) closer the price elasticity of demand will be to the slope of the curve. 
D) greater the absolute value of the change in total revenue when there is a movement from that point upward and to the left along the demand curve. 
A) greater the price elasticity of demand at that point. 
B) smaller the price elasticity of demand at that point. 
C) closer the price elasticity of demand will be to the slope of the curve. 
D) greater the absolute value of the change in total revenue when there is a movement from that point upward and to the left along the demand curve.

Question 3

Suppose that two supply curves pass through the same point. One is steep, and the other is flat. Which of the following statements is correct?

Accepted Answer

A) The flatter supply curve represents a supply that is inelastic relative to the supply represented by the steeper supply curve. 
B) The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve. 
C) Given two prices with which to calculate the price elasticity of supply, that elasticity would be the same for both curves. 
D) A decrease in demand will increase total revenue if the steeper supply curve is relevant, while a decrease in demand will decrease total revenue if the flatter supply cure is relevant. 
A) The flatter supply curve represents a supply that is inelastic relative to the supply represented by the steeper supply curve. 
B) The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve. 
C) Given two prices with which to calculate the price elasticity of supply, that elasticity would be the same for both curves. 
D) A decrease in demand will increase total revenue if the steeper supply curve is relevant, while a decrease in demand will decrease total revenue if the flatter supply cure is relevant.

If the price elasticity of demand for a good is 0.4, then a 10 percent increase in price results in a

The flatter the demand curve through a given point, the

Suppose that two supply curves pass through the same point. One is steep, and the other is flat. Which of the following statements is correct?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Exam 5: Elasticity and Its Application

If the price elasticity of demand for a good is 0.4, then a 10 percent increase in price results in a

The flatter the demand curve through a given point, the

Suppose that two supply curves pass through the same point. One is steep, and the other is flat. Which of the following statements is correct?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters